20-F

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2007

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

or

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from                      to                     .

Commission File Number: 001-31583

Nam Tai Electronics, Inc.

(Exact name of registrant as specified in its charter)

British Virgin Islands
(Jurisdiction of incorporation or organization)
Unit C, 17 Floor Edificio Comercial Rodrigues
599 da Avenida da,
Praia Grande, Macao
(Address of principal executive offices)

     Securities registered or to be registered pursuant to Section 12(b) of the Act: Common Shares, $0.01 par value per share

     Securities registered pursuant to Section 12(g) of the Act: NONE

     Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NONE

     As of December 31, 2007, there were 44,803,735 common shares of the registrant outstanding.

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes     þ No

     If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. o Yes     þ No

     Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

     Indicate by check mark whether the registrant: (i)has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days. þ Yes    o No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated o            Accelerated filer þ           None-accelerated filer o

Indicate by check mark which financial statement item the registrant has elected to follow: Item 17. o Item 18. þ

     If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o

o Yes       þ No                    

Table of Contents

FINANCIAL STATEMENTS AND CURRENCY PRESENTATION	3
INTRODUCTION	3
PART I	3
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS	3
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE	3
ITEM 3. KEY INFORMATION	3
ITEM 4. INFORMATION ON THE COMPANY	23
ITEM 4A. UNRESOLVED STAFF COMMENTS	40
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	41
ITEM 6. DIRECTORS AND SENIOR MANAGEMENT	56
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	63
ITEM 8. FINANCIAL INFORMATION	64
ITEM 9. THE LISTING	69
ITEM 10. ADDITIONAL INFORMATION	70
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	79
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	81
PART II	81
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	81
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	81
ITEM 15. CONTROLS AND PROCEDURES	81
Report of Management on Internal Control Over Financial Reporting	81
Attestation Report of the Registered Public Accounting Firm	82
ITEM 16. [RESERVED]	83
ITEM 16 A. AUDIT COMMITTEE FINANCIAL EXPERT	83
ITEM 16 B. CODE OF ETHICS	83
ITEM 16 C. PRINCIPAL ACCOUNTANT FEES AND SERVICES	83
ITEM 16 D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	84
ITEM 16 E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	84
PART III	84
ITEM 17. FINANCIAL STATEMENTS	84
ITEM 18. FINANCIAL STATEMENTS	84
Index to Consolidated Financial Statements	84
ITEM 19. EXHIBITS	85
SIGNATURE	88
EXHIBIT 4.15
EXHIBIT 4.16
EXHIBIT 4.17
EXHIBIT 4.18
EXHIBIT 4.19
EXHIBIT 4.20
EXHIBIT 4.21
EXHIBIT 4.22
EXHIBIT 4.23
EXHIBIT 4.24
EXHIBIT 4.25
EXHIBIT 4.26
EXHIBIT 4.27
EXHIBIT 4.28
EXHIBIT 4.29
EXHIBIT 4.30
EXHIBIT 4.31
EXHIBIT 4.32
EXHIBIT 4.33
EXHIBIT 4.34
EXHIBIT 4.35
EXHIBIT 4.36
EXHIBIT 4.37
EXHIBIT 4.38
EXHIBIT 4.39
EXHIBIT 4.40
EXHIBIT 4.41
EXHIBIT 4.42
EXHIBIT 4.43
EXHIBIT 4.44
EXHIBIT 4.45
EXHIBIT 4.46
EXHIBIT 4.47
EXHIBIT 4.48
EXHIBIT 4.49
EXHIBIT 4.50
EXHIBIT 4.51
EXHIBIT 4.52
EXHIBIT 4.53
EXHIBIT 4.54
EXHIBIT 12.1
EXHIBIT 12.2
EXHIBIT 13.1
EXHIBIT 25.1

     This Annual Report on Form 20-F contains forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled “Risk Factors” under Item3. Key Information.

     Readers should not place undue reliance on forward-looking statements, which reflect management’s view only as of the date of this Report. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in management’s expectations. Readers should also carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission.

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FINANCIAL STATEMENTS AND CURRENCY PRESENTATION

     The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and publishes its financial statements in United States dollars.

INTRODUCTION

     Except where the context otherwise requires and for purposes of this Annual Report only:

• “we,” “us,” “our company,” “our,” the “Company” and “Nam Tai” refer to Nam Tai Electronics, Inc. and, in the context of describing our operations, also include our PRC operating companies;

• “shares” refer to our common shares, $0.01 par value;

• “China” or “PRC” refers to the People’s Republic of China, excluding Taiwan, Hong Kong and Macao;

• “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Macao” refers to the Macao Special Administrative Region of the People’s Republic of China, and

• all references to “Renminbi,” “RMB” or “yuan” are to the legal currency of China; all references to “U.S. dollars,” “dollars,” “$” or “US$” are to the legal currency of the United States.

     Note with respect to our use of “Bluetooth” in this Report: The Bluetooth^® word mark and logos are owned by the Bluetooth SIG, Inc. and any use of such marks by Nam Tai is under license. Other trademarks and trade names used in this Report, if any, are those of their respective owners.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable

ITEM 3. KEY INFORMATION

Selected Financial Data

     Our historical consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and are presented in U.S. dollars. The following selected statements of income data for each of the three years in the period ended December 31, 2007 and the balance sheet data as of December 31, 2006 and 2007 are derived from our consolidated financial statements and notes thereto included in this Report. The selected statements of income data for each of the two-year periods ended December 31, 2003 and 2004 and the balance sheet data as of December 31, 2003, 2004 and 2005 were derived from our audited financial statements, which are not included in this Report. The following data should be read in conjunction with the Section of the Report entitled Item 5, Operating and Financial Review and Prospects, and our consolidated financial statements including the related footnotes. All reference to numbers of common shares, per share data and stock option data, and our earnings per share have been adjusted retroactively to give effect to a three-for-one stock split effective on June 30, 2003 and have been adjusted to reflect an issuance of a stock dividend to shareholders at a ratio of one dividend share for every ten shares, or a one-for-ten stock dividend, effective on November 7, 2003.

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	Year ended December 31,
	2003			2004			2005			2006			2007
	(in thousands, except per share data)
Consolidated statements of income data:
Net sales — third parties	$	385,524		$	499,680		$	791,042		$	870,174		$	780,822
Net sales — related party		20,782			34,181			6,195			—			—
Total net sales		406,306			533,861			797,237			870,174			780,822
Cost of sales		340,016			457,385			704,314			783,953			693,804
Gross profit		66,290			76,476			92,923			86,221			87,018
Gain on disposal of asset held for sale		—			—			—			9,258			—
Operating costs and expenses:
Selling, general and administrative		24,866			28,053			33,057			30,668			36,550
Research and development		4,037			5,045			7,210			7,866			9,798
Losses arising from the judgment to reinstate redeemed shares		—			—			—			14,465			—
Total operating expenses		28,903			33,098			40,267			52,999			46,348
Income from operations		37,387			43,378			52,656			42,480			40,670
Other (expenses) income — net		(815	)		(1,012	)		(125	)		(1,265	)		2,219
Dividend income received from marketable securities and investment		3,714			18,295			579			—			—
Gain on sale of subsidiaries’ shares		1,838			77,320			10,095			—			390
Gain on disposal of an affiliated company		—			—			3,631			—			—
Gain (loss) on disposal of marketable securities		—			—			(3,686	)		—			43,815
Impairment loss on marketable securities		—			(58,316	)		(6,525	)		—			—
Loss on marketable securities arising from split share structure reform		—			—			—			(1,869	)		—
Interest income		788			1,110			3,948			8,542			9,163
Interest expense		(121	)		(195	)		(438	)		(602	)		(452	)
Income from continuing operations before income tax expenses, minority interests and equity in income (loss) of affiliated companies		42,791			80,580			60,135			47,286			95,805
Income taxes expenses		(399	)		(879	)		(651	)		(377	)		(4,030	)
Income before minority interests and equity income (loss) of affiliated companies		42,392			79,701			59,484			46,909			91,775
Minority interests		(1,067	)		(6,010	)		(7,992	)		(6,153	)		(22,272	)
Income after minority interests		41,325			73,691			51,492			40,756			69,503
Equity in income (loss) of affiliated companies		498			(6,806	)		(186	)		—			—
Net income from continuing operations		41,823			66,885			51,306			40,756			69,503
Discontinued operation		1,979			—			—			—			—
Net income		43,802			66,885			51,306			40,756			69,503
Earnings per share:
Basic	$	1.09		$	1.57		$	1.19		$	0.93		$	1.56
Diluted	$	1.07		$	1.57		$	1.19		$	0.93		$	1.55

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	At December 31,
	2003		2004		2005		2006		2007
	(in thousands, except per share data)
Consolidated balance sheet data:
Cash and cash equivalents	$	61,827	$	160,649	$	213,843	$	221,084	$	272,459
Working capital		93,474		218,243		234,674		238,105		266,306
Land use right and property, plant and equipment, net		77,647		97,441		100,741		105,394		98,599
Total assets		297,695		460,473		520,011		529,235		544,818
Short-term debt, including current portion of long-term debt		3,004		4,955		9,400		6,266		6,570
Long-term debt, less current portion		1,688		5,163		2,850		1,100		1,558
Total debt		4,692		10,118		12,250		7,366		8,128
Shareholders’ equity		217,118		305,053		310,391		317,094		330,181
Common shares		412		426		435		438		448
Total dividend per share		1.00		0.48		1.32		1.52		0.84
Total number of common shares issued		41,231		42,665		43,506		43,787		44,804
Total number of common shares to be issued		—		—		—		1,017		—

Note: Working Capital represents the excess of current assets over current liabilities.

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Risk Factors

     We may from time to time make written or oral forward-looking statements. Written forward-looking statements may appear in this document and other documents filed with the Securities and Exchange Commission, in press releases, in reports to shareholders, on our website, and other documents. The Private Securities Reform Act of 1995 contains a safe harbor for forward-looking statements on which the Company relies in making such disclosures. In connection with this “safe harbor”, we are hereby identifying important factors that could cause actual results to differ materially from those contained in any forward-looking statements made by us or on our behalf. Any such statements are qualified by reference to the following cautionary statements.

We are dependent on a few large customers, the loss of any of which could substantially harm our business and operating results.

     Historically, a substantial percentage of our sales have been to a small number of customers. During the years ended December 31, 2005, 2006 and 2007, sales to our customers accounting for 10% or more of our net sales aggregated approximately 57.7%, 57.6% and 46.9% respectively, of our net sales. Our three largest customers during the year ended December 31, 2007 were Epson Imaging Device Corporation (formerly known as Sanyo Epson Imaging Device), Sharp Corporation and GN Netcom, each of which accounted for more than 10% of our net sales during the year. The loss of any one of our largest customers or a substantial reduction in orders from any of them would adversely impact our sales and decrease our net income or cause us to incur losses unless and until we were able to replace the customer or order with one or more of comparable size.

Our quarterly and annual operating results are subject to significant fluctuations as a result of a wide variety of factors.

     Substantially all of our sales are made on a purchase order basis, and we are not always able to predict with certainty the timing or magnitude of these orders. We cannot guarantee that we will continue to receive any orders from our customers, and our net sales will be harmed if we are unable to obtain a sufficient number of orders from, or ship a sufficient number of products to, customers in each quarter. In addition, our customers may cancel, change or delay product purchase orders with little or no advance notice to us. Also, we believe customers may be increasing the number of vendors upon which they rely for manufacturing. Our quarterly and annual operating results are affected by a wide variety of factors that could materially and adversely affect our business and operating results during any period. This could result from any one or a combination of factors, such as:

• the timing, cancellation or postponement of orders;

• the type of product and related margins;

• our customers’ announcement and introduction of new products or new generations of products;

• the life cycles of our customers’ products;

• variability in our manufacturing yields;

• long lead times and advance financial commitments for our factories and equipment expenditures;

• long lead times and advance financial commitments for components required to complete anticipated customer orders

• our effectiveness in managing manufacturing processes, including, interruptions or slowdowns in production and changes in cost and availability of components;

• changes in the specific products or quantities our customers order; and

• price reductions due to competitive pressure.

     The volume and timing of orders received during a quarter are difficult to forecast. From time to time, our customers encounter uncertain and changing demand for their products. Customers generally order based on their forecasts. Further, we do not typically operate with any significant backlog in orders, and this makes it difficult for us to forecast our revenues, plan our production and allocate resources for future periods (including our capital expenditures). If demand falls below such forecasts or if customers do not control inventories effectively, they may reduce, cancel or postpone shipments of orders.

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     Because of any of the above factors, our operating results in any period should not be considered indicative of results to be expected in any future period, and fluctuations in operating results may also result in fluctuations in the market price of our common shares. Our operating results in future periods may fall below the expectations of public market analysts and investors. This failure to meet expectations could cause the trading price of our common shares to decline.

We face increasing competition, which has had and may continue to have, an adverse effect on our gross margins.

     Although certain barriers to entry the electronics manufacturing services (“EMS”) industry, including technical expertise, substantial capital requirements, difficulties relating to building customer relationships and a large customer base, the barriers to entry are comparatively low and we are aware that manufacturers in Hong Kong and China may be developing or have developed the required technical capability and customer base to compete with our existing business.

     Competition in the EMS industry is intense, characterized by price erosion, rapid technological change and competition from major international companies. This intense competition has resulted in pricing pressures and lower gross margins in certain years. Over the last several years before 2007, our gross margins have declined substantially. Although our gross margins improved slightly in 2007 when compared with 2006, we may not be able to improve on, or even maintain the level of our 2007 gross margins in the future. In the last three years, our gross margins have fluctuated as indicated in the chart below:

     Recent consolidations in our industry, such as the acquisition of Solectron by Flextronics International Ltd, two of our major competitors, in the fourth quarter of 2007, may permit the competitors involved to devote significantly greater resources to the expansion of EMS services that they offer and the marketing of existing competitive services to their larger installed customer bases or to new customers attracted to larger global manufacturing organizations. We expect that competition will increase substantially because of these and other industry consolidations and alliances, as well as the emergence of new competitors.

     If, as a result of these competitive forces, we are compelled to continue to lower our unit prices and are unable to offset the general trend of decreases in our gross margins by increasing our sales volumes, our gross margins will continue to decline. If we cannot stem the decline in our gross margins, our ability to use internal resources to finance planned expansion may be curtailed, our dividend payments to shareholders may be decreased or eliminated, our financial position may be harmed and our stock price may fall.

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We may not be able to compete successfully with our competitors, many of which have substantially greater resources than we do. We will face intense competition when we begin large-scale production of flexible printed circuit, or FPC, boards and FPC subassemblies.

     The electronic manufacturing services we provide are available from many independent sources as well as from our current and potential customers with in-house manufacturing capabilities. The following table identifies those companies, which we believe are our principal competitors by category of products or services we provide:

Product/Service	Competitor
EMS	Celestica, Inc.
	Flextronics International Ltd.
	Hon Hai Precision Industry Co., Ltd.
	Jabil Circuit, Inc
	Sanmina-SCI Corporation
Image capturing devices and their modules	Altus Technology Inc (controlled by Foxconn)
	Lite-On Technology Corporation
	Logitech International S.A.
	The Primax Group
Mobile phone accessories	Balda-Thong Fook Solutions Sdn., Bhd.
	Celestica, Inc.
	Elcoteq Network Corp.
	Flextronics International Ltd.
	Foster Corporation
	Foxlink Group
	Merry Electronics Co. Ltd.
	WKK International (Holdings) Ltd.
RF modules	Wavecom SA
	WKK International (Holdings) Ltd.
Liquid crystal display, or LCD, panels	Elec & Eltek International Holdings Limited
	Truly International Holdings Ltd.
	Varitronix International Ltd.
Telecommunication subassemblies and components	Flextronics International Ltd.
	LG. Philips LCD Co., Ltd.
	Samsung Electronics
	Varitronix International Ltd.
Consumer electronic products (calculators, personal organizers and linguistic products)	Computime Limited Inventec Co. Ltd.
	Kinpo Electronics, Inc.
	VTech Holdings Limited

     Many of our competitors have greater financial, technical, marketing, manufacturing, regional shipping capabilities and logistics support and personnel resources than we do and consolidations among our competitors could result in even larger competitors emerging. As a result, we may be unable to compete successfully with these organizations in the future.

     When we begin large-scale production of flexible printed circuit (“FPC”) boards and FPC subassemblies, we expect to face intense competition from large FPC board manufacturers located in Taiwan, China, Korea, Singapore, North America and Europe as well as from large, established EMS providers that have developed or acquired, or, like we have, are developing their own FPC manufacturing capabilities, and have extensive experience in electronics

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assembly. Furthermore, many companies in our target customer base are moving the design and manufacturing of their products to original design manufacturers (“ODMs”) in Asia. Such competition could pressure us to provide discounts or lower prices to gain or maintain market share, which could adversely affect our margins and the profitability of our FPC business and could adversely affect our operating results as a whole. In addition, if we are unable to capture ODMs as customers, we may be unable to sustain or grow our FPC business.

Our inability to utilize capacity at facilities that we have planned for expansion could materially and adversely affect our business and operating results.

     In 2007, we improved our existing facilities in Shenzhen, PRC in order to expand our capacity to produce FPC boards. We are also in the process of constructing the first of two new factories in Wuxi and plan to construct a new factory Shenzhen Guangming Hi-Tech Industrial Park (“Shenzhen Guangming”) China. Construction of the first of our factories in Wuxi to produce FPC boards and FPC subassemblies has begun and we are considering the best use of the second parcel of land in Wuxi and Shenzhen Guangming, given the amalgmated manufacturing operations post our re-organization in December 2007. Through December 31, 2007, we had spent approximately $14.1 million to modify and equip our existing Shenzhen factory for FPC manufacturing and had spent approximately $1.5 million for the construction project in Wuxi, which includes land price, construction and all related expenses. As of December 31, 2007, we spent approximately $9.0 million as the land price to acquire the land of Shenzhen Guangming. We are also required to pay a relocation allowance to local residents in a total of approximately $645,500, which we expect to be made in the first half of 2008. We have financed the improvements to our existing Shenzhen facilities, and plan to continue financing the planned Wuxi and Shenzhen Guangming factories, from internally generated funds, but cannot guarantee that we will be able to utilize fully the additional capacity that each of these new facilities will provide when they come on line. Our factory utilization is dependent on our success in providing manufacturing services for FPC boards, FPC subassemblies and LCD modules at a price and volume sufficient to absorb our increased overhead expenses. Demand for contract manufacturing of these products may not be as great as we expect, and we may fail to realize the expected benefit from our investments in any of our new factories.

Delays in constructing our new factories could adversely affect our operating results.

     We started production of FPC boards in our existing Shenzhen factory in 2007. In December 2006, we purchased two parcels of lands in Wuxi for a total sum of $1.3 million. Our goal is for our new Wuxi facility with respect to one of the parcels to begin production of FPC boards and FPC subassemblies in early to mid-2009. As of December 2007, we spent $9.0 million as the land price to acquire the land of Shenzhen Guangming where we plan to commence the construction of a new factory in early 2009. We are now considering issues relating to maximizing efficiencies in the design, development and construction of our Shenzhen Guangming parcel and the second parcel of Wuxi properties, factoring into those consideration our the in-process integration of management and operations resulting from our recent internal reorganization. In connection with constructing and improving our manufacturing facilities, we could encounter shortages of materials or skilled labor, unforeseen marketing situation or engineering problems, work stoppages, weather interference, flood, delays in obtaining or failure to obtain necessary permits from regulatory authorities, losses as a result of fraud or corruption or unanticipated costs increases. Any of these eventualities could extend the time for these factories to begin significant production, which, in turn would delay our receipt of anticipated revenues to be generated from such production and adversely affect our operating results.

Cancellations or delays in orders could materially and adversely affect our gross margins and operating results.

     Our sales to original equipment manufacturer customers (“OEMs”), are primarily based on purchase orders that we receive from time to time rather than firm, long-term purchase commitments. Although it is our general practice to purchase raw materials only upon receiving a purchase order, for certain customers we will occasionally purchase raw materials based on such customers’ rolling forecasts. Further, during times of potential component shortages, we have purchased, and may continue to purchase, raw materials and component parts in the expectation of receiving purchase orders for products that use these components. In the event actual purchase orders are delayed, are not received or are cancelled, we would experience increased inventory levels or possible write-offs of obsolete inventory, write-downs of raw materials inventory or the underutilization of our manufacturing capacity if, for example, we decline other potential orders because we expect to use our capacity to produce orders that are later delayed, reduced or canceled.

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Our customers face numerous competitive challenges, such as rapid technological change and short life cycles for their products, which may materially adversely affect their business, and also ours.

     Factors affecting the industries that utilize electronics components in general, and our customers specifically, could seriously harm our customers and, as a result, us. These factors include:

• The inability of our customers to adapt to rapidly changing technology and evolving industry standards, which result in short product life cycles.

• The inability of our customers to develop and market their products, some of which are new and untested, the potential that our customers’ products may become obsolete or the failure of our customers’ products to gain widespread commercial acceptance.

• Recessionary periods in our customers’ markets.

• Increased competition among our customers and their respective competitors which may result in a loss of business, or a reduction in pricing power, for our customers.

• New product offerings by our customers’ competitors may prove to be more successful than our customers’ product offerings.

     If our customers are unsuccessful in addressing these competitive challenges, or any others that they may face, then their business may be materially adversely affected, and as a result, the demand for our services could decline.

Our business has been characterized by a rapidly changing mix of products and customers.

     Our business has been characterized by a rapidly changing mix of products and customers, driven in significant part by changes in demand for consumer electronics as well as technological innovation. We manufacture headsets containing Bluetooth wireless technology, mobile phone accessories, home entertainment products, printed circuit board assemblies (“PCBAs”) for headsets containing Bluetooth wireless technology, radio frequency, or RF, modules, thin film transistor liquid crystal display (“TFT LCD”) modules, color LCD modules and complementary metal oxide semiconductor (“CMOS”) sensor modules, FPC boards, FPC subassemblies, and digital audio broadcast (“DAB”) modules. We expect that a substantial portion of our growth will come from the manufacturing of these products. Certain products have become less economically significant to us over time, such as monochrome LCD modules for mobile phone headsets, for which our sales have dropped significantly in each of the past few years since 2002 as end use customers are increasingly choosing color LCD panels instead. We expect that our current mix of customers and products will continue to change rapidly, and we believe this to be relatively common in the EMS industry. If the products of our customers that we manufacture become obsolete or less profitable and we are not able to diversify our product offerings or customer base in a timely manner, our business would be materially and adversely affected.

There may not be a sufficient market for new products that our customers or we develop.

     Our customers may not develop new products in a timely and cost-effective manner, or the market for products they choose to develop may not grow or be sustained in line with their expectations. This would reduce the overall businesses they outsource, which would seriously affect our business and operating results. Even if we develop capabilities to manufacture new products, there can be no guarantee that a market exists or will develop for such products or that such products will adequately respond to market trends. If we invest resources to develop capabilities to manufacture or expand capabilities for existing and new products, like the investments we made to our existing facilities in Shenzhen and the investments we are making to the new factories we are planning to construct in Wuxi and Guangming Shenzhen, PRC to manufacture FPC boards, FPC subassemblies and other products for which sales do not develop, our business and operating results would be seriously harmed. Even if the market for our services grows, it may not grow at an adequate pace.

We must spend substantial amounts to maintain and develop advanced manufacturing processes and engage additional engineering personnel in order to attract new customers and business.

     We operate in a rapidly changing industry. Technological advances, the introduction of new products and new manufacturing and design techniques could materially and adversely affect our business unless we are able to adapt to those changing conditions. As a result, we are continually required to commit substantial funds for, and

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significant resources to, engaging additional engineering and other technical personnel and to purchase advanced design, production and test equipment.

     Our future operating results will depend to a significant extent on our ability to continue to provide new manufacturing solutions which, based on time to introduction, cost and performance with the manufacturing capabilities of OEMs and competitive third-party suppliers compare favorably to those offered by our competitors. Our success in attracting new customers and developing new business depends on various factors, including:

• utilization of advances in technology;

• development of new or improved manufacturing processes for our customers’ products;

• delivery of efficient and cost-effective services; and

• timely completion of the manufacture of new products.

Our business is capital intensive and the failure to generate sufficient cash could require that we curtail capital expenditures.

     To remain competitive, we must continue to make significant investments in capital equipment, facilities and technological improvements. We expect that substantial capital will be required to continue to expand our manufacturing capacity and capability and provide working capital for growth. We plan to finance our expansion with capital we generate from operations. If we are unable to generate sufficient funds to conduct existing operations and fund our expansion, we may have to curtail our capital expenditures. Any curtailment of our capital expenditures could result in a reduction in net sales, reduction or elimination of our dividends to shareholders, reduced quality of our products, increased manufacturing costs for our products, harm to our reputation, reduced manufacturing efficiencies or other harm to our business.

We generally have no written agreements with suppliers to obtain components and our margins and operating results could suffer from increases in component prices.

     For certain customers, we are responsible for purchasing components used in manufacturing their products. We do not have written agreements with some of our suppliers of components. This typically results in our bearing the risk of component price increases because we may be unable to procure the required materials at a price level necessary to generate anticipated margins from the orders of our customers. Accordingly, increases in component prices could materially and adversely affect our gross margins and operating results.

Our business and operating results would be materially and adversely affected if our suppliers of needed components fail to meet our needs.

     At various times, we have experienced and expect to continue to experience, shortages of some of the electronic components that we use, and suppliers of some components lack sufficient capacity to meet the demand for these components. In some cases, supply shortages and delays in deliveries of particular components have resulted in curtailed production, or delays in production, of assemblies using that component, which contributed to an increase in our inventory levels and reduction in our gross margins. We expect that shortages and delays in deliveries of some components will continue. If we are unable to obtain sufficient components on a timely basis, we may experience manufacturing delays, which could harm our relationships with current or prospective customers and reduce our sales. We also depend on a small number of suppliers for certain components that we use in our business. If we were to be unable to continue to purchase components from these limited source suppliers, our business and operating results would be materially and adversely affected.

Labor shortages in Southern China has adversely affected our gross margins and will likely continue to do so in the future.

     To date, we have conducted all of our manufacturing operations in Southern China, specifically in Guangdong province, where we were able to take advantage of the lower overhead costs and inexpensive labor rates as compared to Hong Kong. Historically, there has been an abundance of labor in Southern China, but since 2002, intensifying in 2004 and continuing to worsen since then, factories in Southern China have been facing a labor shortages as migrant workers engaged in production (typically young women and men who come from various rural provinces in the PRC for the purpose of working for wages higher than are available in such rural regions), technical workers and middle level management seek better wages and working conditions in other provinces of China. A recent survey conducted by Guangdong labor authorities predicts that the labor shortage in Guangdong will worsen in 2008

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as demand for technically skilled workers rises by 20% and the number of ordinary workers needed rises by 10%. Past efforts by Guangdong authorities seeking to arrest the labor shortages by removing the ban on hiring new migrant laborers in the month after the Lunar New Year holiday and raising the minimum wage do not appear to have been successful at luring workers back to Southern China and such changes to the minimum wage have adversely impacted our gross margins. This trend of labor shortages is expected to continue, fueled by the effects of the one-child policy imposed by the Chinese government over the past three decades and will likely result in increasing wages as companies seek to keep their existing work forces. Continuing labor shortages can be expected to adversely impact our future operating results by, for example, preventing us from manufacturing at peak capacity and forcing us to increase wages and benefits to attract the diminishing pool of available workers. This would result in lower revenues and increased manufacturing costs, which would adversely affect gross margins.

Recent changes in the PRC’s labor law restricts Nam Tai’s ability to reduce its workforce in the event of an economic downturn.

     In June 2007, the National People’s Congress of the PRC enacted new labor law legislation called the Labor Contract Law, which became effective on January 1, 2008. It formalizes workers’ rights concerning overtime hours, pensions, layoffs, employment contracts and the role of trade unions. Considered one of the strictest labor laws in the world, among other things, this new law requires an employer to conclude an “open-ended employment contract” with any employee who either has worked for the employer for 10 years or more or has had two consecutive fixed-term contracts. An “open-ended employment contract” is in effect a lifetime, permanent contract, which is terminable only in specified circumstances, such as a material breach of the employer’s rules and regulations, or for a serious dereliction of duty. Such employment contracts with qualifying workers would not be terminable if, for example, Nam Tai determined to downsize its workforce in the event of a economic downturn. Under the new law, downsizing by 20% or more may occur only under specified circumstances, such as a restructuring undertaken pursuant China’s Enterprise Bankruptcy Law, or where a company suffers serious difficulties in production and/or business operations. Nam Tai’s entire staff, who are employed to work exclusively within the PRC, is covered by the new law and thus, Nam Tai’s ability to adjust the size of its operations when necessary in periods of recession or less severe economic downturns has been curtailed. Accordingly, if Nam Tai faces future periods of decline in business activity generally or adverse economic periods specific to Nam Tai’s business, this new law can be expected to exacerbate the adverse effect of the economic environment on Nam Tai’s results of operations and financial condition.

Factors affecting the electronics industry in general and our customers in particular have harmed our operations and could do so again in the future.

     Most of our sales are to customers in the electronics industry, which is subject to rapid technological change, product obsolescence and short product life cycles. The factors affecting the electronics industry in general, or any of our major customers or competitors in particular, could have a material adverse effect on our business and operating results. Our success depends to a significant extent on the success achieved by our customers in developing and marketing their products, especially products that use RF modules, color straight-twisted nematic (“CSTN”) LCD modules, TFT LCD modules, CMOS sensor modules, FPC subassemblies and boards, and DAB modules, some of which may be new and untested. If our customers’ products become obsolete, fail to gain widespread commercial acceptance or become the subject of intellectual property disputes, our business and operating results could be materially and adversely affected.

     From time to time, our customers have experienced significant decreases in demand for their products and services. This volatility has resulted, and may result in the future, in our customers delaying purchases of the products we manufacture for them and our customers placing purchase orders for lower volumes of products than previously anticipated. For example, during 2007 one of our indirect customers, engaged in the manufacture and sale of mobile phones and other mobile devices, suffered a substantial drop in sales volume in its mobile devices business in Asia and Europe which, in turn, adversely affected sales in our telecommunication components assembly (“TCA”) products segment, resulting in our 2007 net sales from that segment decreasing by over $214 million, or 34.1%, from comparable 2006 net sales. To date, we have seen no signs that the decreases in demand in the mobile phone market is reversing and we accordingly expect, at least in the near term during 2008, that sales in our TCA segment will continue the trend evidenced in 2007, will decline from levels we experienced in 2006 and may decrease from TCA product sales levels we reported in 2007.

     In the first few years of the new century, as a result of the economic downturn in the United States and internationally, and reduced capital spending, sales to OEMs in the electronics industry declined substantially. While

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our market has recovered, we cannot assure you that this recovery is sustainable or that the industry will not again suffer declines similar to those occurring in 2001 and 2002, or worse.

We are exposed to impact of global business trends in the mobile phone industry, which could result in even lower gross margins on the mobile phone components and subassemblies we manufacture.

     During the year ended December 31, 2007, approximately 71.4% of our sales were derived from subassemblies and components for mobile phones and mobile phone accessories. Accordingly, any fluctuations in the size of the mobile phone market, market trends, increased competition or pricing pressure of mobile phone industry may affect our business and operating results. For example, the mobile phone industry has been experiencing rapid growth, particularly from emerging economies such as India and China. The growth in these markets, however, does not necessarily translate into increased margins or growing profits as mobile phones sold in developing countries are typically stripped down to basic features and sold for low prices. Competition in developing markets is fierce, even more intense than in countries with advanced economies. Accordingly, we expect that our margins and profitability of the components and assemblies we manufacture for use in mobile phones that our customers target for emerging economies to continue to undergo severe pricing pressures, resulting in lower margins on these products than those we have experienced historically.

Our customers are dependent on shipping companies for delivery of our products and interruptions to shipping could materially and adversely affect our business and operating results.

     Our customers rely on a variety of carriers for product transportation through various world ports. A work stoppage, strike or shutdown of one or more major ports or airports could result in shipping delays materially and adversely affecting our customers, which in turn could have a material adverse effect on our business and operating results. Similarly, an increase in freight surcharges from rising fuel costs or general price increases could materially and adversely affect our business and operating results.

Our products are sold internationally and the effect of business, legal and political risks associated with international operations could significantly harm us.

     As of December 31, 2007, approximately 99.8% of the net book value of our total property, plant and equipment was located in China. We sell our products to customers in Hong Kong, North America, Europe, Japan, China and Southeast Asia. Our international operations are subject to significant political and economic risks and legal uncertainties, including:

• changes in economic and political conditions and in governmental policies;

• changes in international and domestic customs regulations;

• wars, civil unrest, acts of terrorism and other conflicts;

• changes in tariffs, trade restrictions, trade agreements and taxation;

• limitations on the repatriation of funds because of foreign exchange controls;

• exposure to political and financial instability;

• currency exchange losses, collection difficulties or other country-specific losses;

• exposure to fluctuations in the value of local currencies;

• changes in value-added tax, or VAT, reimbursement;

• imposition of currency exchange controls; and

• delays from customs brokers or government agencies.

     Any of these risks could significantly harm our business, financial condition and operating results.

Our operating results could be negatively impacted by seasonality.

     Historically, our sales and operating results have been affected by seasonality. Sales of products and components related to mobile phones have generally been lower in the first quarter after peaking fourth quarter. Sales of educational products and home entertainment devices are often higher during the second and third quarters in anticipation of the start of the school year and the Christmas buying season. Similarly, orders for consumer electronics

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products have historically been lower in the first quarter from both the closing of our factories in China for the Lunar New Year holidays and the general reduction in sales following the holiday season. These sales patterns may not be indicative of future sales performance in future.

Our results could be adversely affected with intensifying environmental regulations.

     Our operations create environmentally sensitive waste, which involves the use and disposal of chemicals, solid and hazardous waste and other toxic and hazardous materials used in the manufacturing process. The disposal of hazardous waste has received increasing attention from Chinese national and local governments and foreign governments and agencies and has been subject to increasing regulation. Currently, relevant Chinese environmental protection laws and regulations impose fines on discharge of waste materials and empower certain environmental authorities to close any facility that causes serious environmental problems. The costs of remedying violations or resolving enforcement actions that might be initiated by governmental authorities could be substantial. Any remediation of environmental contamination would involve substantial expense that could harm our operating results. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our operations may be subject or the manner in which existing or future laws will be administered or interpreted. Future regulations may be applied to materials, products or activities that have not been subject to regulation previously. The costs of complying with new or more stringent regulations could be significant. We are not aware of any claims related to environmental contamination, and have not accrued any amounts to cover such claims.

     Global environmental legislation continues to emerge. These laws place increased responsibility and requirements on the “producers” of electronic equipment ( i.e , the OEMs) and, in turn, their EMS providers and suppliers. On July 1, 2006, the European Union’s Restriction of Hazardous Substances (RoHS) came into effect. As a result, the use of lead and certain other specified substances in electronic products is restricted in the European Union. Where appropriate, we have transitioned our manufacturing processes and interfaced with suppliers and customers to review and secure RoHS compliance. In the event we are not in compliance with the RoHS requirements, we could incur substantial costs, including fines and penalties, as well as liability to our customers. In addition, customers who were deemed exempt for certain substances, or beyond the scope of the legislation, are beginning to be impacted by the changing supply chain. In this respect, we may incur costs related to inventories containing restricted substances. There are also European Union requirements with respect to the collection, recycling and management of waste electronic products and components. Under the European Union’s Waste Electrical and Electronic Equipment (WEEE) directive, compliance responsibility rests primarily with OEMs rather than with EMS companies. However, OEMs may turn to EMS companies such as Nam Tai for assistance in meeting their WEEE obligations. Failure by our customers to meet the RoHS or WEEE requirements or obligations could have a negative impact on their businesses and revenue which would adversely impact our financial results. Similar restrictions are being proposed or enacted in other jurisdictions, including China. We cannot currently assess the impact of these legislations on our operations.

The recent reorganization of our group structure may not result in the expected synergies or benefits or justify the expenses incurred to effect it.

     On December 31, 2007, we completed the reorganization of the Nam Tai Group structure involving our Hong Kong Stock Exchange-listed subsidiaries, Nam Tai Electronic & Electrical Products Limited (“NTEEP”) and J.I.C. Technology Company Limited (“JIC”). Our goal in proposing and effecting this reorganization was to centralize our electronic manufacturing services into one group of our subsidiaries, namely NTEEP and its subsidiaries, and our software services into another group of our subsidiaries, viz., JIC and its subsidiaries, thereby eliminating the overlap and duplication in infrastructure and functions of these businesses that existed prior to the reorganization. We expended and incurred approximately $1.9 million in professional fees and related expenses to propose and implement the reorganization. Our expectations from the reorganization once our businesses have been fully integrated into, and our personnel acclimated to, the new structure are that our operations will benefit from a simpler organizational structure, which we believe can foster a more efficient and effective exchange of know-how and technology among our respective group companies; reduce overhead costs; and allow for stronger management controls. However, even when fully implemented, we may not realize the anticipated synergies from the reorganization and our operations and overhead costs may not meaningfully benefit from it or justify the expenses we incurred to effect the reorganization.

Our insurance coverage may not be sufficient to cover the risks related to our operations and losses.

     We have not experienced any major accidents in the course of our operations, which have caused significant property damage or personal injuries. However, there is no assurance that we will not experience major accidents in the future. Although we have insurance against various risks, including a business interruption, fidelity and losses or

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damages to our buildings, machinery, equipment and inventories, the occurrence of certain incidents such as earthquake, war, pandemics, and flood, and the consequences resulting from them, may not be covered adequately, or at all, by the insurance we maintain. We also face exposure to product liability claims in the event that any of our products is alleged to have resulted in property damage, bodily injury or other adverse effects. We have only limited product liability insurance covering some of our products. Losses incurred or payments we may be required to make in excess of applicable insurance coverage or for uninsured events or any material claim for which insurance coverage is denied, limited or is not available could have a material adverse effect on our business, operating results or financial condition.

We have suffered material losses from litigation involving claims against Tele-Art Inc.(“Tele-Art”) and related proceedings.

     For a number of years, we have been involved in litigation against Tele-Art, its initial liquidator and the Bank of China (Hong Kong) Limited, or the Bank of China, formerly known as Bank of China Hong Kong Branch, concerning, among things, the priority of claims against Tele-Art’s insolvent estate and Nam Tai’s rights to have redeemed in 1999 and 2002 an aggregate of 1,017,149 (giving effect to our three-for-one stock split and one-for-ten stock dividend that we made in 2003) of the common shares of Nam Tai beneficially held by Tele-Art Inc. in order to satisfy a portion of Nam Tai’s claims against Tele-Art. After several decisions by the courts of the British Virgin Islands and appeals in these proceedings, judgment was rendered on November 20, 2006 by the Lords of the Judicial Committee of the Privy Council of the United Kingdom, which required us to reinstate the 1,017,149 Nam Tai shares that we had previously redeemed from Tele-Art and deliver them to Bank of China on account of its secured claim against Tele-Art. For the year ended December 31, 2006, we accounted for the reinstatement of the shares at their fair value, i.e. the market closing price on November 20, 2006, the date of the Judgment.

     We have been advised that Bank of China sold 539,830 of the reinstated shares in early September 2007 and applied the proceeds to the secured debt that Bank of China claimed was due to it from Tele-Art. The proceeds from the sale retained by Bank of China included the amount it asserted to satisfy the obligation it claimed from Tele-Art through the date of sale, plus a reserve of approximately $900,000 for legal costs and expenses that Bank of China has claimed for related litigation. We have been advised by our legal advisers that such retention is wrongful. We intend to issue legal proceedings against the Bank of China for such wrongful retention and for an account of the sale proceeds retained by it in purported satisfaction of the ebts due to it. Bank of China delivered to Tele-Art’s liquidator the 477,319 shares remaining from the reinstated shares it sold. Investigations on behalf of the liquidator seeking to locate and recover additional Tele-Art assets for its estate in liquidation are ongoing. The liquidator has authorized us to utilize the cash dividends attributable to the reinstated shares for the benefit of the estate of Tele-Art (in Liquidation). We have deposited such cash dividends and will deposit proceeds realized from the sale of the remaining reinstated shares and any other assets of Tele-Art’s estate that are discovered into a segregated bank account, from which all future legal costs and other expenses relating to the liquidation of Tele-Art will be paid until its liquidation proceedings are concluded. As legal proceedings are exprected to continuous for quite some time, we run the view that substantial legal costs and other expenses may be incurred in the future.

We could become involved in intellectual property disputes.

     We do not have any patents, licenses, or trademarks material to our business. Instead, we rely on trade secrets, industry expertise and our customers sharing of intellectual property with us. However, there can be no assurance that such intellectual property is not in violation of that belonging to other parties. We may be notified that we are infringing patents, copyrights or other intellectual property rights owned by other parties. In the event of an infringement claim, we may be required to spend a significant amount of money to develop a non-infringing alternative or to obtain licenses. We may not be successful in developing such an alternative or obtaining a license on reasonable terms, if at all. Any litigation, even without merit, could result in substantial costs and diversion of resources and could materially and adversely affect our business and operating results.

We depend on our executive officers and skilled personnel.

     Our success depends largely upon the continued services of our executive officers as well as upon our ability to attract and retain qualified technical, manufacturing and marketing personnel. Generally, our executive officers are bound by employment or non-competition agreements. However, we cannot assure you that we will be able retain our executive officers and we could be seriously harmed by the loss of any of our executive officers. The loss of service of any of these officers or key management personnel could have a material adverse effect on our business growth and operating results. We maintain no key person insurance on our executive officers. As our operations grow, we also

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need to recruit and retain additional skilled management personnel and if we are not able to do so, our business and our ability to grow could be harmed.

Changes in the economic and political environment in China and policies adopted by the PRC government to regulate its economy may adversely affect our business, operating results and financial condition.

     All of our manufacturing facilities and most of our operations are in China. China’s economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development in respect of various areas such as structure, governmental involvement, level of development, growth rate, capital reinvestment, allocation of resources, rate of inflation and balance of payments position. Prior to 1978, China’s economy was a planned economy. Subsequently, increasing emphasis has been placed on the utilization of market forces in the development of China’s economy, including the encouragement of private economic activities and decentralization of economic regulation with a move towards a market economy. However, the PRC government retains a large role in industrial output (which is majority state-owned), the allocation of resources, production, pricing and management, and there can be no assurance that the PRC government will continue to pursue a policy of economic reform and they may significantly alter them to our detriment from time to time without notice. Furthermore, in all cases we may not be able to capitalize on the economic reform measures adopted by the PRC government. Our operations and financial results could be adversely affected by changes in political, economic and social conditions or the relevant policies of the PRC government, such as changes in laws and regulations (or the interpretations thereof), measures which might be introduced to control inflation, changes in the rate or method of taxation, imposition of additional restrictions on currency conversion and the imposition of additional import restrictions. The nationalization or other expropriation of private enterprises by the PRC government could result in the total loss of our investment in China. Furthermore, significant portions of economic activities in China are export-driven at present and, therefore, are affected by developments in the economies of China’s principal trading partners and other export-driven economies.

The PRC legal system has inherent uncertainties that could materially and adversely impact our ability to enforce the agreements governing our factories and to do business.

     We occupy our manufacturing facilities under China land use agreements with agencies of the PRC government and we occupy other facilities under lease agreements with the relevant landlord. The performance of these agreements and the operations of our factories are dependent on our relationship with the local governments in regions, which our facilities are located. Our operations and prospects would be materially and adversely affected by the failure of the local government to honor these agreements or an adverse change in the law governing them. In the event of a dispute, enforcement of these agreements could be difficult in China. Unlike the United States, China has a civil law system based on written statutes in which judicial decisions have limited precedential value. The government of China has enacted laws and regulations dealing with economic matters such as corporate organization and governance, foreign investment, commerce, taxation and trade. However, its experience in implementing, interpreting and enforcing these laws and regulations is limited, and our ability to enforce commercial claims or to resolve commercial disputes in China is unpredictable. These matters may be subject to the exercise of considerable discretion by agencies of the PRC government, and forces and factors unrelated to the legal merits of a particular matter or dispute may influence their determination.

Political or trade controversies between China and the United States could harm our operating results or depress our stock price.

     Differences between the United States and PRC governments on some political issues continue occasionally to color the relationship. These occasional controversies could materially and adversely effect our business and operations. Political or trade friction between the two countries could also materially and adversely effect the market price of our shares, whether or not they adversely effect our business.

A deterioration of relations between China and Japan may harm our business.

     While our production facilities are located in China, we derive a substantial amount of our sales from Japanese customers. With respect to our major customers accounting for 10% or more of our net sales, customers in Japan represented approximately 57.7%, 57.6% and 36.1% of our net sales for each of the years ended December31, 2005, 2006 and 2007, respectively. Our business is therefore vulnerable to any deterioration of relations or disruption of trade between China and Japan.

     Beginning in the spring of 2005, relations between China and Japan grew increasingly strained. This culminated in a week of anti-Japan protests throughout China, which included attacks on Japanese citizens and

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property and a boycott on Japanese imports. While relations between Japan and China appeared to improve since 2006, if relations again become strained, our Japanese customers and other companies based in Japan may become reluctant to outsource manufacturing to us and other EMS providers based in China. There is also the possibility that our operations in China could be targeted by anti-Japan protestors or for boycotts because of the presence of a number of our managers and employees who are Japanese or because of our relationships with Japanese customers. A reduction in business from Japanese customers or harm cause to our facilities or personnel from anti-Japanese sentiment could materially and adversely affect our business and operating results.

The economy of China has been experiencing significant growth, leading to some inflation. If the government tries to control inflation by traditional means of monetary policy or returns to planned economic techniques, our business will suffer a reduction in sales growth and expansion opportunities.

     The rapid growth of the PRC economy has historically resulted in high levels of inflation. If the government tries to control inflation, it may have an adverse effect on the business climate and growth of private enterprise in the PRC. An economic slowdown may increase our costs. If inflation is allowed to proceed unchecked, our costs would likely increase, and there can be no assurance that we would be able to increase our prices to an extent that would offset the increase in our expenses.

Changes to PRC tax laws and heightened efforts by the China’s tax authorities to increase revenues are expected to subject us to greater taxes.

     Under prior PRC law, we have been afforded a number of tax concessions by, and tax refunds from, China’s tax authorities on a substantial portion of our operations in China by reinvesting all or part of the profits attributable to our PRC manufacturing operations. However, on March 16, 2007, the Chinese government enacted a new unified enterprise income tax law which became effective on January 1, 2008. Prior to this new income tax law, as a foreign invested enterprise located in Shenzhen, PRC, our PRC subsidiaries enjoyed a national income tax rate of 15% and were exempted from the 3% local income tax. However, under the new income tax law, apart from those qualified as high-tech enterprises, most domestic enterprises and foreign invested enterprises would be subject to a single PRC enterprise income tax rate and gradually transfer to the new tax rate of 25% within five years. For information on the new enterprise income tax, (“EIT”) rates as announced recently by the PRC’s State Council, please see the table in Item 5. Operating and Financial Review and Prospects The preferential tax treatment to our subsidiaries in the PRC of qualifying for tax refunds as a result of reinvesting their profits earned in previous years in the PRC also expired on January 1, 2008. Therefore, the impact of this increase on our overall tax rate will depend on, among other things, our income from of PRC subsidiaries, the actual implementation of the terms of transition under the EIT by the PRC government and our ability to qualify our existing operations as high-tech enterprises under the new law.

     We base our tax position upon the anticipated nature and conduct of our business and upon our understanding of the tax laws of the various countries in which we have asset or conduct activities. However, our tax position is subject to review and possible challenge by taxing authorities and to possible changes in law, which may have retroactive effect. We cannot determine in advance the extent to which some jurisdictions may require us to pay taxes or make payments in lieu of taxes.

Payment of dividends by our subsidiaries in the PRC to us is subject to restrictions under PRC law. The new PRC tax law could force us to reduce the amount of dividends we have historically paid to our shareholders or possibly eliminate them or we may decide not pay dividends in the future.

     Under PRC law, dividends may be paid only out of distributable profits. Distributable profits with respect to our subsidiaries in the PRC refers to after-tax profits as determined in accordance with accounting principles and financial regulations applicable to PRC enterprises (“China GAAP“) less any recovery of accumulated losses and allocations to statutory funds that it is required to make. Any distributable profits that are not distributed in a given year are retained and available for distribution in subsequent years. The calculation of distributable profits under China GAAP differs in many respects from the calculation under U.S. GAAP. As a result, our subsidiaries in PRC may not be able to pay any dividend in a given year as determined under U.S. GAAP. The China’s tax authorities may require changes in determining income of the Company that would limit its ability to pay dividends and make other distributions. PRC law requires companies, including our PRC subsidiaries, to reserve about 11% of their profits for future development and staff welfare, which amounts are not distributable as dividends. These rules and possible changes to them could restrict our PRC subsidiaries from repatriating funds ultimately to us and our stockholders as dividends.

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     Prior to the new EIT law, PRC-organized companies were exempt from withholding taxes with respect to earnings distributions, or dividends, paid to shareholders of PRC companies outside the PRC, such as was the case when our PRC subsidiaries distributed portions of their earnings to our offshore subsidiaries. However, under the new EIT Law, dividends payable to foreign investors which are derived from sources within the PRC will be subject to income tax at the rate of 10% by way of withholding unless the foreign investors are companies incorporated in countries which have tax treaty agreement with PRC and rate agreed by both parties will be applied. For example, under the terms of a tax treaty between Hong Kong and the PRC that became effective in December 2006, distributions from our PRC subsidiaries to our Hong Kong subsidiary, will be subject to a withholding tax at a rate ranging from 5% to 10%, depending on the extent of ownership of equity interests held by our Hong Kong subsidiary in our PRC enterprises. As a result of this new PRC withholding tax, amounts available to us in earnings distributions from our PRC enterprises will be reduced. Since we derive most of our profits from our subsidiaries in PRC, the reduction in amounts available for distribution from our PRC enterprises could, depending on the income generated by our PRC subsidiaries, force us to reduce, or possibly eliminate, the dividends we have paid to our shareholders historically. For this reason, or other factors, we may decide not to declare dividends in the future. If we do pay dividends, we will determine the amounts when they are declared and even if we do declare dividends in the future, we may not continue them in any future period.

We may have been a passive foreign investment company for 2007 or may become a passive foreign investment company for the current taxable year of 2008, which could result in adverse U.S. federal income tax consequences to U.S. investors.

     We may be classified as a passive foreign investment company, or PFIC, by the United States Internal Revenue Service, or IRS, for U.S. federal income tax purposes. Such characterization could result in adverse U.S. federal income tax consequences if you are a U.S. investor. For example, if we were to be classified as a PFIC in any taxable year, U.S. investors who owned our common shares generally would be subject to increased U.S. tax liabilities and reporting requirements, and pledges of our common shares would be considered sales for U.S. federal income tax purposes.

     The determination of whether we are a PFIC in any taxable year is made on an annual basis and depends on the composition of our income and assets. Specifically, we will be classified as a PFIC if, after applying relevant look-through rules with respect to the income and assets of subsidiaries, either (i) 75% or more of our gross income for such taxable year is passive income, or (ii) 50% or more of the average percentage of our assets during such taxable year either produce passive income or are held for the production of passive income.

     We have not determined whether we were a PFIC for the 2007 taxable year, but we may have been so. In addition, we may become a PFIC for the current taxable year of 2008. Accordingly, there can be no assurance that we have not or will not be classified as a PFIC. Given the complexity of the issues regarding our classification as a PFIC, U.S. investors are urged to consult their own tax advisors for guidance as to our PFIC status. For further discussion of the adverse U.S. federal income tax consequences of our classification as a PFIC see “Taxation — United States Federal Income Tax Consequences — U.S. Holders — PFIC Considerations,” below.

Changes in foreign exchange regulations of China could adversely affect our operating results.

     Some of our earnings are denominated in yuan, the base unit of the RMB. The People’s Bank of China and the State Administration of Foreign Exchange (“SAFE”) regulate the conversion of RMB into foreign currencies. Under the current unified floating exchange rate system, the People’s Bank of China publishes a daily exchange rate for RMB based on the previous day’s dealings in the inter-bank foreign exchange market. Financial institutions may enter into foreign exchange transactions at exchange rates within an authorized range above or below the exchange rate published by the People’s Bank of China according to the market conditions. Since 1996, the PRC government has issued a number of rules, regulations and notices regarding foreign exchange control designed to provide for greater convertibility of RMB. Under such regulations, any foreign investment enterprise (“FIE”) must establish a “current account” and a “capital account” with a bank authorized to deal in foreign exchange. Currently, FIEs are able to exchange RMB into foreign exchange currencies at designated foreign exchange banks for settlement of current account transactions, which include payment of dividends based on the board resolutions authorizing the distribution of profits or dividends of the company concerned, without the approval of SAFE. Conversion of RMB into foreign currencies for capital account transactions, which include the receipt and payment of foreign exchange for loans, capital contributions and the purchase of fixed assets, continues to be subject to limitations and requires the approval of SAFE. Our subsidiaries in China are all FIEs and subject to the laws of China to which such regulations apply. However, there can be no assurance that we will be able to obtain sufficient foreign exchange to make relevant payments or satisfy other foreign exchange requirements in the future.

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Our financial results have been affected by changes in currency exchange rates. Changes in currency rates involving the Japanese yen or renminbi could increase our expenses.

     Our financial results have been affected by currency fluctuations, resulting in total foreign exchange gains during each of our last three fiscal years as indicated in the following chart:

     We sell most of our products in U.S. dollars and pay our expenses in U.S. dollars, Japanese yen, Hong Kong dollars and RMB. While we face a variety of risks associated with changes among the relative value of these currencies, we believe the most significant exchange risk presently results from material purchases we make in Japanese yen and expenses we pay in RMB.

     Approximately 3%, 11% and 8% of our material costs have been in Japanese yen during the years ended December 31, 2005, 2006 and 2007 respectively, but sales made in Japanese yen accounted for only 2%, 9% and 7%, respectively, of our sales for each of the last three years. During the year ended December 31, 2006, the exchange rate of the Japanese yen to the U.S. dollar fluctuated above and below the rate at December 31, 2005, but at December 31, 2006, the exchange rate of Japanese yen to the U.S. dollar had increased approximately 1% from the level at the end of December 31, 2005. This fluctuation resulted in a slight increase in our material costs during 2006 but it did not have a material impact on our 2006 financial results as compared to those in 2005. A future appreciation of the Japanese yen against U.S. dollars would increase our costs when translated into U.S. dollars and could adversely affect our margins unless we made sufficient sales in Japanese yen to offset against material purchases we made in Japanese yen.

     Approximately 9% and 13% of our total costs and expenses and 2% and 4% of our material costs were in RMB during the years ended December 31, 2006 and 2007, respectively. Between 1994 and July 2005, the market and official RMB rates were unified and the value of the RMB was essentially pegged to the U.S. dollar and was relatively stable. On July 21, 2005, the People’s Bank of China adjusted the exchange rate of RMB to the U.S. dollar by linking the RMB to a basket of currencies and simultaneously setting the exchange rate of RMB to U.S. dollars, from 1:8.27, to a narrow band of around 1:8.11, resulting in an approximate 2.4% appreciation in the value of the RMB against the U.S. dollars at the end of 2005, from the July 21, 2005 RMB adjustment, a 3.3% appreciation at the end of 2006 as compared to the end of 2005 and a further 6.5% appreciation at the end of 2007 as compared to the end of 2006. This RMB appreciation to the U.S. dollars resulted in an increase in our total costs and expenses of approximately 0.9% based on the difference between our sales made in RMB versus our total costs and expenses incurred in RMB.

     If the trend of RMB appreciation to the U.S. dollar continues or the PRC government allows a further and significant RMB appreciation, our operating costs would further increase and our financial results would be adversely effected unless our RMB denominated sales increased commensurately. If we determined to pass onto our customers through price increases the effect of increases in the RMB relative to the U.S. dollars, it would make our products more expensive in global markets, such as the United States and the European Union. This could result in the loss of customers, who may seek, and be able to obtain, products and services comparable to those we offer in lower-cost

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regions of the world. If we did not increase our prices to pass on the effect of increases in the RMB relative to the U.S. dollars, our margins and profitability would suffer.

Power shortages in China could harm our operations.

     We consume substantial amounts of electricity in our manufacturing processes at our production facilities in China. Certain parts of China have been subject to power shortages in recent years. We have experienced a number of power shortages at our production facilities in China to date. We are sometimes given advance notice of power shortages and in relation to this we currently have a backup power system. However, there can be no assurance that in the future our backup power system will be completely effective in the event of a power shortage, particularly if that power shortage is over a sustained period of time and/or we are not given advance notice thereof. Any power shortage, brownout or blackout for a significant period of time may disrupt our manufacturing, and as a result, may have an adverse impact on our business.

A recurrence of SARS or the threat of an avian flu outbreak in China, or similar widespread public health developments may materially and adversely affect our business and operating results.

     Any recurrence of Severe Acute Respiratory Syndrome (“SARS”) and Avian Influenza in China could negatively impact our manufacturing operations and cause significant delays in production. In addition, if the outbreak of Avian Influenza in Asian countries, including Vietnam, South Korea and Japan were to spread to China, where manufacturing facilities are located or are being constructed, there could be similar or other disruptions to our business.

Actual or perceived health risks associated with the use of mobile phone handsets or other communications equipment could negatively affect our business.

     There have been public concerns about health risks arising from electromagnetic fields generated by mobile phone handsets. Any perceived risks or new findings, regardless of their scientific foundation, concerning the potential adverse health effects of mobile communications equipment could negatively affect our reputation and brand value, or that of our direct or indirect customers, and could result in a reduction in sales. We cannot assure you that we will not become the subject of product liability claims or be held liable for such claims or be required to comply with future regulatory changes that may have an adverse effect on our business.

The market price of our shares will likely be subject to substantial price and volume fluctuations.

     The markets for equity securities have been volatile and the price of our common shares has been and could continue to be subject to wide fluctuations in response to variations in operating results, news announcements, trading volume, sales of common shares by our officers, directors and our principal shareholders, customers, suppliers or other publicly traded companies, general market trends both domestically and internationally, currency movements and interest rate fluctuations. Other events, such as the issuance of common shares upon the exercise of our outstanding stock options could also materially and adversely affect the prevailing market price of our common shares.

     Further, the stock markets have often experienced extreme price and volume fluctuations that have affected the market prices of equity securities of many companies and that have been unrelated or disproportionate to the operating performance of such companies. These fluctuations may materially and adversely affect the market price of our common shares.

     The concentration of share ownership in our senior management allows them to control or substantially influence the outcome of matters requiring shareholder approval. On February 29, 2008, members of our senior management and Board of Directors as a group beneficially owned approximately 27.0% of our common shares. As a result, acting together, they may be able to control and substantially influence the outcome of all matters requiring approval by our shareholders, including the election of directors and approval of significant corporate transactions. This ability may have the effect of delaying or preventing a change in control of Nam Tai, or causing a change in control of Nam Tai that may not be favored by our other shareholders.

Regulatory initiatives in the United States , such as the Sarbanes-Oxley Act and other rules and regulations may increase the time and costs of certain activities.

     In the United States, there have been regulatory changes especially in corporate governance practices of public bodies, including the Sarbanes-Oxley Act of 2002 and changes in the continued listing rules of the New York Stock Exchange, and new accounting pronouncements and there may be new regulatory legislation and rule and

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accounting changes, which may have an adverse impact on our future financial position and operating results. These regulatory changes and other legislative initiatives have made some activities more time-consuming and increased financial compliance and administrative costs of the companies that are subject to them, including foreign private issuers like Nam Tai having securities traded in the United States and thereby subject to legislative and regulatory changes in the U.S. capital markets. We continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

It may be difficult to serve us with legal process or enforce judgments against our management or us.

     We are a British Virgin Islands holding corporation with subsidiaries in the British Virgin Islands, Hong Kong, Macao and China. Substantially, all of our assets are located in the PRC. In addition, most of our directors and executive officers reside within the PRC or Hong Kong, and substantially all of the assets of these persons are located within the PRC or Hong Kong. It may not be possible to effect service of process within the United States or elsewhere outside the PRC or Hong Kong upon our directors, or executive officers, including effecting service of process with respect to matters arising under United States federal securities laws or applicable state securities laws. The PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States and many other countries. As a result, recognition and enforcement in the PRC of judgments of a court in the United States or many other jurisdictions in relation to any matter, including securities laws, may be difficult or impossible. Furthermore, an original action may be brought in the PRC against our assets and our subsidiaries, our directors and executive officers only if the actions are not required to be arbitrated by PRC law and only if the facts alleged in the complaint give rise to a cause of action under PRC law. In connection with any such original action, a PRC court may award civil liability, including monetary damages.

     No treaty exists between Hong Kong, the British Virgin Islands or Macao and the United States providing for the reciprocal enforcement of foreign judgments. However, the courts of Hong Kong and the British Virgin Islands are generally prepared to accept a foreign judgment as evidence of a debt due. An action may then be commenced in Hong Kong or the British Virgin Islands for recovery of this debt. A Hong Kong or British Virgin Islands court will only accept a foreign judgment as evidence of a debt due if:

• the judgment is for a liquidated amount in a civil matter;

• the judgment is final and conclusive and has not been stayed or satisfied in full;

• the judgment is not, directly or indirectly, for the payment of foreign taxes, penalties, fines or charges of a like nature (in this regard, a Hong Kong or British Virgin Islands court is unlikely to accept a judgment for an amount obtained by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damage sustained by the person in whose favor the judgment was given);

• the judgment was not obtained by actual or constructive fraud or duress;

• the foreign court has taken jurisdiction on grounds that are recognized by the common law rules as to conflict of laws in Hong Kong or the British Virgin Islands;

• the proceedings in which the judgment was obtained were not contrary to natural justice (i.e., the concept of fair adjudication);

• the proceedings in which the judgment was obtained, the judgment itself and the enforcement of the judgment are not contrary to the public policy of Hong Kong or the British Virgin Islands;

• the person against whom the judgment is given is subject to the jurisdiction of the Hong Kong or the British Virgin Islands court; and

• the judgment is not on a claim for contribution in respect of damages awarded by a judgment, which does not satisfy the criteria stated previously.

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     Similarly, the courts of Macao are generally prepared to accept a foreign judgment as evidence of a debt due.An action may then be commenced in Macao for recovery of this debt. A Macao court will only accept a foreign judgment as evidence of a debt due if:

• there is no doubt to the authenticity of the judgment documents and the understanding of the judgment;

• pursuant to the law of the place of judgment, the judgment is final and conclusive;

• the judgment was not obtained by fraud or the matter in relation to the judgment is not within the exclusive jurisdiction of Macao courts;

• the judgment will not be challenged on the ground that the relevant matter has been adjudicated by the Macao court, except matters which have first been adjudicated by courts outside Macao;

• pursuant to the law of the place of the judgment, the defendant has been summoned and the proceedings in which the judgment was obtained were not contrary to natural justice; and

• the enforcement of the judgment will not cause any orders that may result in apparent public disorder.

     Enforcement of a foreign judgment in Hong Kong, the British Virgin Islands or Macao may also be limited or affected by applicable bankruptcy, insolvency, liquidation, arrangement and moratorium, or similar laws relating to or affecting creditors’ rights generally, and will be subject to a statutory limitation of time within which proceedings may be brought.

Future issuances of preference shares could materially and adversely affect the holders of our common shares or delay or prevent a change of control.

     Our Board of Directors may amend our Memorandum and Articles of Association without shareholder approval to create from time to time, and issue, one or more classes of preference shares (which are analogous to preferred stock of corporations organized in the United States). While we have never issued any preference shares and we have none outstanding, we could issue preference shares in the future. Future issuance of preference shares could materially and adversely affect the rights of the holders of our common shares, or delay or prevent a change of control.

Our status as a foreign private issuer in the United States exempts us from certain of the reporting requirements under the Securities Exchange Act of 1934 and corporate governance standards of the New York Stock Exchange, or NYSE limiting the protections and information afforded to investors.

     We are a foreign private issuer within the meaning of rules promulgated under the Securities Exchange Act of 1934. As such, we are exempt from certain provisions applicable to United States public companies including:

• the rules under the Securities Exchange Act of 1934 requiring the filing with the SEC of quarterly reports on Form 10-Q, current reports on Form 8-K or annual reports on Form 10-K;

• the sections of the Securities Exchange Act of 1934 regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Securities Exchange Act of 1934;

• the provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; and

• the sections of the Securities Exchange Act of 1934 requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction (i.e., a purchase and sale, or sale and purchase, of the issuer’s equity securities within less than six months).

     In addition, because the Company is a foreign private issuer, certain corporate governance standards of the NYSE that are applied to domestic companies listed on that exchange may not be applicable to us. For information regarding whether our corporate governance standards differ from those applied to US domestic issuers, see the discussion under “NYSE listed Company Manual Disclosure” in Item 6. Directors and Senior Management of this Report.

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     Because of these exemptions, investors are not afforded the same protections or information generally available to investors holding shares in public companies organized in the United States or traded on the NYSE.

ITEM 4. INFORMATION ON THE COMPANY

Corporate Information

     Nam Tai Electronics, Inc. was founded in 1975 and moved its manufacturing facilities to China in 1980 to take advantage of lower overhead costs, lower material costs and competitive labor rates available and subsequently relocated to Shenzhen, China in order to capitalize on opportunities offered in southern China. We were reincorporated as a limited liability International Business Company under the laws of the British Virgin Islands in August 1987 (which was amended in 2004 as The British Virgin Islands Business Companies Act, 2004). Our principal manufacturing and design operations are currently based in Shenzhen, China, approximately 30 miles from Hong Kong, and we plan to construct new manufacturing facility in Guangming Shenzhen and two more facilities in Wuxi, Jiangsu Province, near the East Coast of China, approximately 80 miles Northwest of Shanghai. Our PRC headquarters is located in Macao, which, like Hong Kong, is a Special Administrative Region of the PRC. Certain of our subsidiaries’ offices are located in Macao and Hong Kong, which provide us access to Macao’s and Hong Kong’s infrastructure of communication and banking facilities. Our corporate administrative matters are conducted in the British Virgin Islands through our registered agent, McNamara Corporate Services Limited, McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands. In 1978, Mr. Koo, the founder of the Company, began recruiting operating executives from the Japanese electronics industry. These executives brought years of experience in Japanese manufacturing methods, which emphasize quality, precision, and efficiency in manufacturing. Senior management currently includes Japanese professionals who provide technical expertise and work closely with both our Japanese component suppliers and customers.

Major Events During 2007 to Date

Disposition of TCL Interest

     At December 31, 2006, we held an equity interest in of approximately 3.1% or 80.6 million shares of TCL Corporation (formerly known as TCL Holdings Corporation Ltd.), which had a market value of approximately $24.36 million. TCL Corporation and its group companies are a Chinese electronics manufacturer headquartered in Huizhou of Guangdong Province, southern China. TCL Corporation’s products include mobile phones, personal computers, home appliances, electric lighting, and digital media sold to domestic and overseas markets. TCL Corporation is listed on the Shenzhen Stock Exchange. In April 2007, we sold our shares of TCL Corporation on the Shenzhen Stock Exchange for an aggregate of approximately $54 million, which resulted in a net gain to us after minority interest of approximately $28 million.

Transactions in Securities of our Hong Kong Listed-Subsidiaries

     At December 31, 2006, we held approximately 74.94% of our Hong Stock Exchange-listed subsidiary, J.I.C. Technology Company Limited., or JIC. At that time and throughout 2007, JIC and its subsidiaries were principally engaged in the manufacture and sale of LCD products. In May 2007, we purchased approximately 11.1 million additional shares of JIC on the Hong Kong Stock Exchange. In June 2007 we sold 10,728,000 JIC shares on the Hong Kong Stock Exchange for a net gain of $65,000 and at December 31, 2007, we held 572,594,978 ordinary shares of JIC, which was equivalent to 74.99% of JIC’s issued and outstanding share capital.

     At December 31, 2006, we held approximately 70.31% of our other Hong Kong Stock Exchange-listed subsidiary, Nam Tai Electronic & Electrical Products Limited, or NTEEP. At that time and throughout 2007, NTEEP and its subsidiaries were principally engaged in the manufacture and sale of consumer electronics and communications products. During 2007, we made several separate purchases and sales of NTEEP shares on the Hong Kong Stock Exchange, increasing our net holdings by 25,315,000 shares, for aggregate net gains of approximately $325,000. At December 31, 2007, we held 645,229,470 shares of NTEEP, representing 73.18% of the total issued and outstanding share capital of NTEEP.

Developments in Planned Expansion

     In the second quarter of 2007, we began limited scale production of FPC boards at one of our existing Shenzhen plants in furtherance of the implementation of the strategy that we formulated in 2006 to accelerate the vertical integration of our business of manufacturing key-component subassemblies for telecommunication products. In June 2007, we entered into an official land use transfer agreement and a supplemental agreement with Shenzhen

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Municipal Bureau of State Land and Resources, giving effect to the official project investment agreement we had signed with the Guangming Hi-Tech Industrial Park in 2006 to acquire approximately 1.3 million square feet of land in the Baoan District of Shenzhen. The land acquired is approximately 30 minutes driving distance from our existing Shenzhen manufacturing facilities and is more than two times of the land upon which our principal facilities in Shenzhen are located. We plan to begin project construction of a new factory complex in early 2009 and, when completed, currently intend to use the new facility as our PRC headquarters and to increase manufacturing capacity.

     In early 2008 , we began construction of the first of two planned factories in Wuxi, PRC, and we hope to complete construction and begin mass production of FPC boards and FPC subassemblies at this factory in early to mid-2009. We are currently considering the best use of the second parcel of land in Wuxi approximately 3.7 miles from the FPC factory under construction given the amalgamated manufacturing operations post our re-organization.

The 2007 Reorganization

     In October 2007, we proposed, and by December 31, 2007 we had completed, the re-organization of the Nam Tai Group structure involving our group subsidiaries, including our Hong Kong Stock Exchange-listed subsidiaries, NTEEP and JIC. We refer to this re-organization as the “2007 Reorganization.” Immediately prior to the completion of the 2007 Reorganization, we operated through three groups of operating subsidiaries: (1) the NTEEP Group; (2) the JIC Group; and (3) the Zastron Group. The following table shows our effective ownership interest in each of our group subsidiaries before and after the 2007 Reorganization:

	Nam Tai’s effective percentage
	shareholdings
	Before 2007		After 2007
	Reorganization		Reorganization
NTEEP Group		73.18		73.18
JIC Group		74.99		74.99
Zastron Group		100.00		73.18

     Our goal in proposing and effecting the 2007 Reorganization was to centralize our electronic manufacturing services into one group of our subsidiaries, namely NTEEP and its subsidiaries, and our software services into another group of our subsidiaries, viz., JIC and its subsidiaries, thereby eliminating the overlap and duplication in infrastructure and functions of these businesses that existed prior to the re-organization. We expended and incurred approximately $1.9 million in professional fees and related expenses to propose and implement the re-organization. Our expectations from the re-organization once our businesses have been fully integrated into, and our personnel acclimated to, the new structure are that our operations will benefit from a simpler organizational structure, which we believe can foster a more efficient and effective exchange of know-how and technology among our respective group companies; reduce overhead costs; and allow for stronger management controls. For the purpose of achieving a more simplified group structure, centralizing its resources allocation, reducing overhead costs, and strengthening management control.

     The 2007 Reorganization required the implementation of a series of transactions, involving capital shares transfers among Nam Tai, NTEEP, JIC and Zastron. To the extent involving NTEEP and JIC, these transactions were approved by the minority shareholders of NTEEP and JIC in accordance with the applicable Rules of the Hong Kong Stock Exchange.

     The transactions to effect the 2007 Reorganization, each of which occurred simultaneously with the other, were as follows:

• We acquired 100% of Jetup Electronic (Shenzhen) Co. Ltd. (“Jetup”) from JIC in exchange for the cash payment by the Company to JIC of approximately $48.9 million;

• JIC acquired 100% of Shenzhen Namtek Co., Ltd (“Shenzhen Namtek”) and Namtek Japan Company Limited (“Namtek Japan”) from NTEEP in exchange for the cash payment by JIC to NTEEP of approximately $10.3 million;

• NTEEP acquired 100% of both Jetup and the Zastron Group from us in exchange for the delivery to us (i) cash in the amount of approximately $41.7 million and (ii) an unsecured shareholder’s loan in

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the principal amount of approximately $311.4 million payable by NTEEP to us over a 12-period in equal annual installments of principal plus interest at the rate of 3.9% per annum.

     Each of the simultaneous transactions involved in the 2007 Reorganization are considered intercompany transactions within our consolidated group of companies and accordingly the presentation of our financial condition and results of operations on a consolidated bases eliminates the effect of these individual transactions (except for the reduction in the effective percentage of ownership of our Zastron group of subsidiaries is eliminated in our consolidated financial statement).

Our 2008 Sale of JIC

     In February 2008 we began negotiations with HKC (Holdings) Limited (“HKC”), regarding the sale of our entire equity interest in our Hong Kong-listed subsidiary, JIC. At that time, we owned 572,594,978 shares of JIC, representing approximately 74.99% of its outstanding share capital. These negotiations concluded on February 26, 2008, when HKC and we entered into a Share Purchase Agreement, under which HKC agreed to purchase, and we agreed to sell our interest in JIC for cash in the aggregate amount of approximately $51.1 million.

     Under the Share Purchase Agreement, HKC paid us earnest money in the amount of $128,500 at signing and paid us the balance of the purchase price at the closing, which occurred shortly thereafter on March 4, 2008.

Capital Expenditures

     Our principal capital expenditures and divestitures over the last three years include the following:

	Year ended December 31
	2005		2006		2007
Property, plant and equipment (net)	$	32,166,000	$	23,793,000	$	13,785,000

     Our major capital expenditures in 2007 included:

• $4.8 million for machinery used mainly for bonding and testing;

• $4.0 million for machinery used mainly for LCD products;

• $2.4 million for project of FPC board manufacturing in existing site; and

• $2.6 million for other capital equipment.

     Our major capital expenditures in 2006 included:

• $1.4 million for machinery used mainly for COG products;

• $7.2 million for machinery used mainly for production of LCD modules;

• $11.7 million for project of FPC board manufacturing in existing site; and

• $3.5 million for other capital equipment.

     Our major capital expenditures in 2005 included:

• $10.8 million for new factory expansion;

• $5.4 million for expansion of a LCD factory;

• $3.3 million for machinery used mainly for COG products;

• $4.9 million for machinery used mainly for FPC subassemblies; and

• $7.8 million for other capital equipment.

     Capital expenditures we have planned for 2008 include:

• $5.8 million for the expansion in LCD factory;

• $15.5 million for machinery used mainly for LCD modules production;

• $53.6 million for new factory construction in Wuxi;

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• $6.0 million for an office building in Japan;

• $9.4 million for machinery used for surface mount technology; and

• $1.8 million for other capital equipment.

     Our plans for capital expenditures are subject to change from time to time and could result from, among other things, our consummation of any significant amount of additional acquisition or strategic investment opportunities, which we regularly explore.

Business Overview

     We are an electronics manufacturing and design services provider to a select group of the world’s leading OEMs of telecommunications and consumer electronic products. Through our electronics manufacturing services operations, we manufacture electronic components and subassemblies, including LCD panels, LCD modules, RF modules, DAB modules, FPC board and FPC subassemblies, image sensors modules and PCBAs for headsets containing Bluetooth wireless technology. The modules and subassemblies are used in numerous electronic products, including mobile phones, laptop computers, digital cameras, electronic toys, and handheld video game devices. We also manufacture finished products, including mobile phone accessories, home entertainment products and educational products. We assist our OEM customers in the design and development of their products and furnish full turnkey manufacturing services that utilize advanced manufacturing processes and production technologies. Our services include software development, firmware, and mechanical design, parts and components purchasing, product industrialization, and assembly into finished products or electronic subassemblies with full quality testing and assurance. These services are value-added and assist us in obtaining new business but do not represent a material component of our revenue. We also provide ODM services, in which we design and develop proprietary products that are sold by our OEM customers using their brand name.

Our Customers

     Historically, we have had substantial recurring sales from existing customers. Approximately 96.3% of our 2007 net sales came from customers that also used our services in 2006. While we seek to diversify our customer base, a small number of customers currently generate a significant portion of our sales. Sales to our 10 largest customers accounted for 86.6%, 89.4% and 84.4% of our net sales during the years ended December 31, 2005, 2006 and 2007 respectively. Sales to customers accounting for 10% or more of our net sales in the years ended December 31, 2005, 2006 or 2007 were as follows:

	Year ended December 31,
	2005			2006			2007
Wuxi Sharp Electronic Components Co., Ltd.		10.1	%		22.5	%		*
Sharp Corporation		32.3	%		18.8	%		20.2	%
Epson Imaging Device Corporation (1)		15.3	%		16.3	%		15.9	%
GN Netcom		*			*			10.8	%

*	Less than 10% of our total net sales.
(1)	Formerly known as Sanyo Epson Imaging Device

     Our 10 largest OEM customers based on net sales during 2007 include the following (listed alphabetically).

Customer	Products
GN Netcom	Headset accessory containing Bluetooth wireless technology
Hikari Alphax Co., Ltd.	LCD modules
LeapFrog Enterprise, Inc.	FLY Fusion TM Pentop Computers
Ryoyo Electro Hong Kong Limited	LCD panels
Epson Imaging Device Corporation (1)	LCD modules for cellular phones and FPC subassemblies
Sharp Corporation	FPC subassemblies, calculators, PDAs and dictionaries
Sony Computer Entertainment Europe Ltd.	Home entertainment products
Sony Ericsson Mobile Communications AB	Mobile phone digital camera accessories, headset accessory containing Bluetooth wireless technology and flashlight for mobile phone
Texas Instruments Incorporated	Calculators
Uniden HK Ltd.	LCD panels

(1) Formerly known as Sanyo Epson Imaging Device

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     At any given time, different customers account for a significant portion of our business. Percentages of net sales to customers vary from quarter to quarter and year to year and fluctuate depending on the timing of production cycles for particular products.

     Sales to our OEM customers are based primarily on purchase orders we receive from time to time rather than firm, long-term purchase commitments from our customers. Although it is our general practice to purchase raw materials only upon receiving a purchase order, for certain customers we will occasionally purchase raw materials based on such customers’ rolling forecasts. Uncertain economic conditions and our general lack of long-term purchase commitments with our customers make it difficult for us to predict revenue accurately over the longer term. Even in those cases where customers are contractually obligated to purchase products from us or repurchase unused inventory from us, we may elect not to immediately enforce our contractual rights because of the long-term nature of our customer relationships and for other business reasons, and instead may negotiate accommodations with customers regarding particular situations.

Our Products

     Our operations are organized into three reportable segments, consisting of consumer electronics and communication products (“CECP”), telecommunication components assembly (“TCA”), and LCD products (“LCDP”). The dollar amounts (in thousands) and percentages of our net sales by reportable segment and product category for the years ended December 31, 2005, 2006 and 2007 were as follows:

	Year ended December 31,
	2005					2006					2007
	Dollars (US$)		Percent			Dollars (US$)		Percent			Dollars (US$)		Percent
CECP		169,056		21	%		178,320		21	%		283,757		36	%
TCA		570,069		72			627,199		72			413,199		53
LCDP		58,112		7			64,655		7			83,866		11
Total		797,237		100	%		870,174		100	%		780,822		100	%

     Please refer to Note 16 “Segment Information” of our consolidated financial statements and Item 8 Financial Information Export Sales which sets forth the information of net sales to customers by geographical area.

Consumer Electronic and Communication Products, or CECP

     The consumer electronic and communication products we manufacture are focusing on high growth and mass volume products segments of consumer electronics and communications sectors, and include:

• Mobile phone accessories such as headsets containing Bluetooth wireless technology, snap-on portable music speaker, phone cradle, snap-on FM radio adaptors, and snap-on GPS adaptors;

• Entertainment devices such as USB web cam for interactive games, USB microphone and converter box Karaoke, and a buzzer gaming device for music quiz games;

• Educational products such as digital pens, calculators and electronic dictionaries;

• Optical devices such as CMOS sensor modules, camera modules for notebook computers and mobile phones and recording cameras for the automotive industry; and

• Software development services principally for electronic dictionary products for major Japanese customers. In addition, car navigation products were also developed for potential customers.

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Telecommunication Component Assembly, or TCA

     We manufacture the following subassemblies and components:

• Color and monochrome LCD modules to display information as part of telecommunication products such as mobile phones and telephone systems. Our LCD modules could be manufactured for use in most other hand-held consumer electronic devices, such as electronic games and digital cameras.

• RF modules for integration into mobile phones. RF modules are partially finished circuits that can be incorporated into larger products or components. They include receivers, transmitters, and transceivers. These modules could be manufactured for use in most other hand-held consumer electronic products, such as PDAs, laptop computers and other products with wireless connectivity.

• DAB modules, which we began manufacturing in 2005, are digital audio broadcasting components that are used in digital radio products such as home tuners, kitchen radios, in-car receivers, CD players, clock radios, boom boxes, midi-systems and handheld portable devices.

• FPC subassemblies for integration into various LCD modules

• FPC board manufacturing for vertical integration to FPC subassembly business, this could be used for mobile phone, PDAs, office automation, laptop computers and other products which require interface connectivity.

• Front light panels for handheld video game devices.

• Back light panels for handheld video game devices, which we began manufacturing in October 2004.

• 1.9 high-frequency cordless telephones and home feature phones.

LCD Products, or LCDP

     LCD panels are found in numerous applications in electronics products, such as watches, clocks, calculators, pocket games, PDAs and mobile and cordless telephones, and car audio systems. We are a customized LCD panel manufacturer, and we develop each product from design concept all the way to a high quality mass producible product. Since 2003, we have also begun manufacturing customized LCD modules that include components such as backlights, FPC and Chip on Class, or COG. In 2005, Jetup began developing LCD modules for cordless and Voice-Over-Internet Protocol, or VoIP, phones. In 2007, Jetup has further extended the product application of customized LCD products to medical devices, industrial instruments, office automations and automotives.

Our Manufacturing and Assembly Capabilities

     We utilize the following production techniques:

Chip On Film, Or COF

is an assembly method for bonding integrated circuit chips and other components onto a flexible printed circuit. This process allows for greater compression of the size of a product when assembled enabling the production and miniaturization of small form factor devices like cellular phones, PDAs, digital cameras and notebook PCs. As of December 31, 2007, we had 16 COF machines. These machines connect the bump of large scale integrated, or LSI, driver onto FPC pattern with anisotropic conductive film, or ACF. These COF machines have the ability to pitch fine to 38 micrometers and a total production capacity of up to 4,400,000 chips per month.

Chip On Glass, Or COG

is a process that connects integrated circuits directly to LCD panels without the need for wire bonding. We apply this technology to produce advanced LCD modules for high-end electronic products, such as cellular phones and PDAs. As of December 31, 2007, we had 23 COG lines in our principal manufacturing facilities. These machines provide an LCD of dimension of up to 200 millimeters (length)x 150 (width)x 2.2 (height), a process time of five seconds per chip, a pin pitch fine to 38 micrometers and a total production capacity of up to 4,200,000 chips per month. During 2005, our subsidiary, Jetup also started manufacturing COG LCD modules. As of December 31, 2007, Jetup had 18 COG lines and is capable of bonding 5 million units of COG LCD modules a month. They are able to bond LCD panels up to sizes of 200 millimeters x 200 millimeters x 2.2 millimeters thick, with an accuracy of five microns’ tolerance, in a cycle time of 12-15 seconds per piece.

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Chip On Board, Or COB	is a technology that utilizes wire bonding to connect large-scale integrated circuits directly to printed circuit boards. As of December 31, 2007, we had 53COB aluminum bonding machines which provide a high speed chip bonding time of 0.25 second per 2 millimeters wire, a bond pad fine to 75 micrometers and a total production capacity of up to 3,829,000 (150 wires/board) per month. We use COB aluminum bonding in the assembly of consumer products such as digital pen, calculators, electronic dictionaries, , audio products. We also had 3COB gold ball bonding machines which provide a high speed chip bonding time of 0.072 second per 2 millimeters wire, a bond pad fine to 50 micrometers and a total production capacity of up to 500,000 (150 wires/board) per month. We use COB gold ball bonding in the CMOS camera module, which use in USB camera, notebook computer, mobile phone and digital pen.
Outer Lead Bonding, Or OLB	is an advanced technology used to connect PCBs and large-scale integrated circuits with a large number of connectors. We use this technology to manufacture complex miniaturized products, such as high-memory PDAs. As of December 31, 2007, we had three OLB machines. The machines include multi-pinned tape carrier packaged large scale integrated circuit, or TCP LSIC, bonding which is up to 280 pins, which also provide ultra thin assembly with module thickness to around one millimeter and high accuracy bonding with pin pitch to 100 micrometers. The total production capacity is 12,000 units per month.
Tape Automated Bonding With Anisotropic Conductive Film, Or TAB With ACF	is an advanced heat sealing technology that connects a liquid crystal display component with an integrated circuit in very small LCD modules, such as those used in cellular phones and pagers. As of December 31, 2007, we had 24 systems of TAB with ACF machines. The machines provide process time of 10 to 25 seconds per component, a pin pitch fine up to 150 micrometers and a total production capacity of up to 4,936,000 components per month. During 2005, Jetup also started manufacturing TAB LCD modules. As of December 31, 2007, Jetup had four TAB lines and is capable of bonding 2,000,000 pieces of TAB LCD modules a month. They are able to bond LCD panels up to sizes of 120 millimeters x 120 millimeters x 2.2 millimeters thick, with an accuracy of 10 microns’ tolerance in a cycle time of 20-25 seconds per piece.
Fine Pitch Heat Seal Technology, Or FPHS Technology	allows us to connect LCD displays to PCBs produced by COB and outer lead bonding that enables very thin connections. This method is highly specialized and is used in the production of finished products such as PDAs. As of December 31, 2007, we had eight machines utilizing FPHS technology. The machines provide a pin pitch fine to 260 micrometers and a total production capacity of up to 268,000 units per month.
Surface Mount Technology, Or SMT	is a process by which electronic components are mounted directly on both sides of a printed circuit board, increasing board capacity, facilitating product miniaturization and enabling advanced automation of production. We use SMT for products such as mobile display module and electronic linguistic devices. As of December 31, 2007, we had 37 SMT productions lines. The production time per chip ranges from 0.055 second per chip to 0.8 second per chip and high precision ranging from +/-0.05 millimeter to +/-0.1 millimeter. The components size ranges from 0.4 millimeter (length)x 0.2 millimeter (width) to 55 millimeters (length)x 55 millimeters (width). Ball grid array, or BGA, ball pitch is 0.4 millimeter and ball diameter is 0.2 millimeter. Flip Chip, our smallest lead/bump pitch, is 250/240UM and our smallest components spacing is 0.15 micrometers. The total production capacity is over 1 billion resistor capacitor chips per month.
Super-Twisted Nematic, Or STN, Displays	is a type of monochrome passive matrix LCD capable of providing higher information content to display systems and are typically found in applications such as cordless phones, mobile phones, MP3 players, pocket games and PDAs. Our JIC. group began producing STN LCDs in 2002. During 2005, our JIC group upgraded its two existing twisted nematic, or TN type, LCD lines to STN LCD lines. TN displays rotate the director of the liquid crystal by 90°, but STN LCD displays employ up to a 270°rotation. This extra rotation gives the crystal a much steeper voltage-brightness response curve and also widens the angle at which the display can be viewed before losing much contrast.As of December 31, 2007, our JIC group was using three automated STN lines capable of producing both TN and STN type LCDs with capacity of 150,000 pairs of glass (each sheet of glass of 360 millimeters x 400 millimeters in size) panels per month.
Lcd Back-End	is a main manufacturing process for LCD panels, and is regarded as part of the process for its finished product LCD modules. It includes the precise pure water cleaning process, scribing of LCD glass, liquid crystal insertion, sealing process and breaking process, then turns the LCD mother glass into LCD panels. Our machines can cope with 0.2millimeters + 0.2millimeters LCD mother glass up to dimension 550 millimeters x 670 millimeters, with cutting tolerance +/-0.1 millimeters. Nam Tai started mass production from September 2006, with monthly maximum production capacity of 1,800,000 units.

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     As of December 31, 2007, we had eight clean rooms at our principal manufacturing facilities, which housed COB, COF, COG and Chip Scale Package capabilities for CMOS sensor modules, electronic calculators, digital camera accessories, LCD modules manufacturing. At the same date, we also have four clean rooms at another of our factories, which we use to manufacture LCD panels and modules.

     A cleanroom is an environment, typically used in manufacturing or scientific research, which has a low level of environmental pollutants such as dust, airborne microbes, aerosol particles and chemical vapors. In other words, a cleanroom has a controlled level of contamination that is specified by the number of particles per cubic meter at a specified particle size. Of our 12 clean rooms at December 31, 2007, four were class ten thousand, six were class thousand and two were class one hundred with one of them use for cleaning the clothes to be used in clean room.

FPC boards and FPC Subassemblies

     Flexible Printed Circuit Subassemblies. We began manufacturing FPC subassemblies in March 2003 for integration into various LCD modules. FPC subassemblies are FPC board enhanced by attaching electronic components, such as connectors, switches, resistors, capacitors, light emitting devices, integrated circuits, cameras and optical sensors, to the circuit. The reliability of FPC component assemblies is dependent upon proper assembly design and the use of appropriate fixtures to protect the flex-to-connector interface. Connector selection is also important in determining the signal integrity of the overall assembly and is very important to devices that rely upon high system speed to function properly.

     Flexible Printed Circuits. Flexible printed circuits, which consist of copper conductive patterns that have been etched or printed while affixed to flexible substrate materials such as polyimide or polyester, are used to provide connections between electronic components and as a substrate to support these electronic devices. The circuits are manufactured by subjecting the base materials to multiple processes, such as drilling, screening, photo imaging, etching, plating and finishing. Single-sided flexible printed circuits, which have an etched conductive pattern on one side of the substrate, are normally less costly and more flexible than double-sided flexible printed circuits because their construction consists of a single patterned conductor layer. Double-sided flexible printed circuits, which have conductive patterns or materials on both sides of the substrate that are interconnected by a drilled or copper-plated hole, can provide either more functionality than a single-sided flexible printed circuit by containing conductive patterns on both sides, or greater shielding of components against electromagnetic interference than a single-sided flexible printed circuit by covering one side of the circuit with a shielding material rather than a circuit pattern.

     Currently we buy a portion of FPC boards from suppliers and attach electronic components to them in accordance with our customer’s specifications and produce FPC subassemblies. Since 2007, we also began manufacturing of these devices in our existing facility in Shenzhen. to vertically integrate this process by producing FPC boards internally

Quality Control

     We maintain strict quality control programs for our products, including the use of total quality management, systems and advanced testing and calibration equipment. Our quality control personnel test the quality of incoming raw materials and components. During the production stage, our quality control personnel also test the quality of work-in-progress at several points in the production process. Finally, after the assembly stage, we conduct testing of finished products. In addition, we provide office space at our principal manufacturing facilities for representatives of our major customers to permit them to monitor production of their products and we provide them with direct access to our manufacturing personnel.

     All of our manufacturing facilities are certified under ISO 9001 quality standards, the International Organization for Standardization, or ISO’s, highest standards. The ISO is a Geneva-based organization dedicated to the development of worldwide standards for quality management guidelines and quality assurance. ISO 9000, which was the first quality system standard to gain worldwide recognition, requires a company to gather, analyze, document, monitor and make improvements where needed. Our certifications under an ISO 9001 quality standard demonstrate that our manufacturing operations meet the most demanding of the established world standards. All of our manufacturing facilities are also certified under an ISO 14001 environmental management standard, which was published in 2004 to provide a structured basis for environmental management control. In January 2007, Namtai Electronic (Shenzhen) Co. Ltd. or Namtai Shenzhen, were certified under the standard of Occupational Health and Safety Assessment Series, or OHASA, 18001:1999. OHASA 18001 is an international occupational health and safety management system specification. This demonstrated that Namtai Shenzhen had a recognized international standard

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in management system on occupational health and safety. As at the end of January 2007, Jetup was also certified with the compliance of the Technical Specification 16949, or TS16949. TS16949 is an automotive sector-specific quality management system requirement that uses ISO 9001: 2000 (verbatim) as its base and is required for supplying products to OEMs of automotive industry. In addition, , Namtai Shenzhen certified under International Council of Toy Industries’, or ICTI, program in May 2007 which demonstrated that Namtai Shenzhen runs in compliance with the code of business practices standard in the toy industries with fair labor treatment and care of employees’ health and safety. In November 2007, Namtai Shenzhen also completed an audit for the International Electrotechnical Commission, or IEC, Quality Assessment System for Electronic Components (IECQ) - Electrical and Electronic Components and Products — Hazardous Substance Process Management System Requirements and received IECQ 080000 certification in January 2008. This demonstrated that the control on electrical and electronic components products hazardous substance process management meets the demanding of world standard of the IEC.

     We started the implementation of the Six Sigma approach. In 2004, our principal manufacturing facilities were recognized by the China Association for Quality of the Chinese Government as a “National Advanced Enterprise for the Promotion of Six Sigma”. Six Sigma is an internationally recognized approach that uses facts and data to develop better solutions, thereby reducing defects and production times, and improving customer satisfaction. This approach allows the Company to lower its costs by minimizing manufacturing defects. This results in improved profit margins and higher competitiveness.

Our Suppliers

     We purchase thousands of different component parts from numerous suppliers, which we have approved based on their quality, cost and services. For some components, we have chosen, for strategic considerations, to rely on a single supplier. We purchase components from suppliers located in Japan, China and other countries. Our general practice is to purchase components upon receipt of purchase orders from customers and pursuant to the customer’s authorization with agreed liability for purposes of minimizing our inventory risk by ordering components and parts only to the extent necessary to support the order. However, we may occasionally purchase raw materials or request suppliers to maintain buffer stock of certain supplies for particular customers based on such customer’s rolling forecasts in order to shorten the lead-time for key materials.

     The major component parts we purchase include the following:

• Integrated circuits or “chips”, most of which we purchase presently from Cambridge Silico Radio Plc Ltd., Ricoh Company Ltd, ATI Technologies Ltd, Rohm Electronics (HK) Co., Ltd., Samsung Electronics., Ltd., Sharp Electronics (M) SDN.BHD and certain of their affiliates;

• LCD panels, which are available from many manufacturers. In 2007, we purchased LCD panels from Suzhou Epson Co. Ltd., Safaring Technology Co. Ltd., Toshiba Matsushita Display Co. Ltd., Shantou Goworld Display (Plant II) Co. Ltd., and VBest Electronics Ltd.;

• FPC boards, which consist of copper conductive patterns that have been etched or printed while affixed to flexible substrate materials such as polyimide or polyester, are mainly used to provide connections for electronic components and as a substrate to support these electronic devices. In 2007, we purchased FPC boards mainly from Sony Chemical Co., Ltd., Nitto Denko (HK) Co. Ltd. and NOK Mektec Corp. Ltd.;

• Light-emitting diodes, or LEDs, are semiconductor devices that emit incoherent narrow-spectrum light when electrically biased in the forward direction. This effect is a form of electroluminescence. LEDs are small extended sources with extra optics added to the chip, which emit a complex intensity spatial distribution. We purchase LEDs primarily from Nichia Corporation; and

• CMOS imaging sensors, which we purchase mainly from Omnivision Technologies Inc., Micron Technology Inc. and Magnachip Semiconductor Ltd. Solar cells and batteries, which are standard “off-the-shelf” items that we generally purchase in Hong Kong from agents of Japanese manufacturers or directly from companies in China; various mechanical components such as plastic parts, cables, rubber keypads, PCBs, indium tin oxide, or ITO, glass used in the production of LCD panels, and packaging materials from various local suppliers in China; and various acoustic components, which we mainly sourced from Minami Acoustics Limited, Vansonic Enterprise co. Ltd., BSE Group, Ole Wolff Elektronik A/S and Lexin (Japan) Ltd. where the manufacturing base is principally in China.

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     Whenever practical, we will consider using domestic China suppliers who are often able to provide their products at lower cost than overseas suppliers and with shorter lead times.

     From time to time, there may be certain components subjected to limited allocation by certain of our suppliers due to industry-wide shortage as a result of fast growing global demand.

     In some cases, supply shortages and delays in deliveries of particular components could result in curtailed production, or delays in production. These supply shortages have contributed to an increase in our inventory levels and reduction in our margins. We expect that occasional component shortages and delays in deliveries of some components will continue to occur. If we are unable to procure sufficient quantity components in a timely fashion, we may experience production delays, which could harm our relationships with current or prospective customers and reduce our sales.

     The principal raw materials used by the Company are large scale integrated (“LSI”), circuits, semiconductors, FPC boards, LCD panels, LEDs and batteries. At times, the pricing and availability of these raw materials can be volatile, attributable to numerous factors beyond the Company’s control, including general economic conditions, currency exchange rates, industry cycles, production levels or a supplier’s tight supply. In the past, we have asked our customers to share in the increased costs of raw materials where such increased costs would adversely affect the Company’s business, results of operations and financial condition. Our customers have generally agreed when so requested in the past. We cannot assure you, however, that our customers will agree to share costs in the future and that our business, results of operations and financial condition would not be adversely affected by increased volatility of raw materials.

Production Scheduling

     The typical cycle for a product to be designed, manufactured and sold to an OEM customer is one to two years, which includes the production period, the development period and the period for market research and data collection (which is undertaken primarily by our OEM customers). Initially an OEM customer gathers data from its sales personnel on products for which there is market interest, including features and unit costs. The OEM customer then contacts us, and possibly other prospective manufacturers, with forecasted total production quantities and design specifications or renderings. From that information, we in turn contact our suppliers and determine estimated component and material costs. We later advise our OEM customer of the development costs, charges (including molds, tooling and software design, if applicable) and unit cost based on the forecasted production quantities desired during the expected production cycle.

     Once the OEM customer and we agree to the quotation for the development costs and the unit cost, we begin the product development if we are engaged to do so. This development period typically lasts less than six months, but may be longer if software design is included. During this time, we complete all molds, tooling and software required to manufacture the product with the development costs generally borne by our customer. Upon completion of the molds, tooling and software, we produce samples of the product for the customer’s quality testing, and, once approved, commence mass production of the product. We recover the development costs in relation to molds, tooling and software from our customers.

     The production period usually lasts approximately six to twelve months. In some cases, our OEM customer handles all product design and development and engages us only at the point of initial production. Typically, more advanced products have shorter production runs. If total production quantities change, the OEM customer often provides only limited notice before discontinuing orders for a product. At any point in time we may be in different stages of the development and production periods for the various models under development or in production for our OEM customers.

     Generally, our production is based on purchase orders received from OEM customers. Purchase orders are often supported by letters of credit or written confirmation from the OEM customer and generally may not be cancelled once confirmed without the mutual consent of the parties. Even in those cases where customers are contractually obligated to purchase products from us or repurchase unused inventory from us, we may elect not to immediately enforce our contractual rights because of the long-term nature of our customer relationships and for other business reasons, and instead may negotiate accommodations with customers regarding particular situations.

     We did not suffer a material loss resulting from the cancellation of OEM customer orders for the years ended December 31, 2005, 2006 or 2007.

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Sales and Marketing

     We focus on developing close relationships with our customers at the development and design phases and continuing throughout all stages of production. We identify, develop and market new products and technologies that benefit our customers and position us as a strong EMS provider with the ability to design and develop products.

     Sales and marketing operations are integrated processes involving direct salespersons, project managers and senior executives. We direct our sales resources and activities at several management and staff levels within our customers and prospective customers. We receive unsolicited inquiries resulting from word of mouth, from public relations activities, and through referrals from current customers. We evaluate these opportunities against our customer selection criteria and assign direct salespersons.

Seasonality

     Historically, our sales and operating results have often been affected by seasonality. Sales of products and components related to mobile phones have generally been lower in the first quarter after peaking in the fourth quarter. Sales of educational products and home entertainment devices are often higher during the second and third quarters in anticipation of the start of the school year and the Christmas buying season. Similarly, consumer electronics products have historically been lower in the first quarter resulting from both the closing of our factories in China for the Lunar New Year holidays and the general reduction in sales following the holiday season. As we have diversified our services for complex components, we expect that seasonality may be less of a factor affecting our business in the future.

Transportation

     Transportation of components and finished products to and from Shenzhen is by truck. Component parts purchased from Japan, Korea, Singapore and elsewhere of the world are generally shipped by air and delivered to our designated forwarders’ warehouse located in Hong Kong. To date, we have not been materially impacted by any transportation problems. However, transportation difficulties affecting air cargo or shipping, such as an extended closure of ports that materially disrupt the flow of our customers’ products into the United States, could materially and adversely influence our sales and margins if, as a result, our customers delay or cancel orders or seek concessions to offset expediting charges they incur pending resolution of the problems causing the port closures. The recent hike in crude oil price may have an upward pressure on transportation cost and this remains to be a major concern in the near future. As a higher transportation cost could adversely influence our overall margins.

Competition

     The electronic manufacturing services we provide are available from many independent sources as well as from our current and potential customers with internal manufacturing capabilities. The following table identifies those companies who we believe are our principal competitors by category of products or services we provide:

Product/Service	Competitor
EMS	Ø Celestica, Inc.
	Ø Flextronics International Ltd.
	Ø Hon Hai Precision Industry Co., Ltd.
	Ø Jabil Circuit, Inc
	Ø Sanmina-SCI Corporation
Image capturing devices and their modules	Ø Altus Technology Inc (controlled by Foxconn)
	Ø Lite-On Technology Corporation
	Ø Logitech International S.A.
	Ø The Primax Group

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Product/Service	Competitor
Mobile phone accessories	Ø Balda-Thong Fook Solutions Sdn., Bhd.
	Ø Celestica, Inc.
	Ø Elcoteq Network Corp.
	Ø Flextronics International Ltd.
	Ø Foster Corporation
	Ø Foxlink Group
	Ø Merry Electronics Co. Ltd.
	Ø WKK International (Holdings) Ltd.
RF modules	Ø Wavecom SA
	Ø WKK International (Holdings) Ltd.
Liquid crystal display, or LCD, panels	Ø Elec & Eltek International Holdings Limited
	Ø Truly International Holdings Ltd.
	Ø Varitronix International Ltd.
Telecommunication subassemblies and components	Ø Flextronics International Ltd.
	Ø LG. Philips LCD Co., Ltd.
	Ø Samsung Electronics
	Ø Varitronix International Ltd.
Consumer electronic products (calculators, personal organizers and	Ø Computime Limited
linguistic products)	Ø Inventec Co. Ltd.
	Ø Kinpo Electronics, Inc.
	Ø VTech Holdings Limited

     Many of our competitors have greater financial, technical, marketing, manufacturing, regional shipping capabilities and international logistics support and personnel resources than we do. As a result, Nam Tai positions itself as a competitive-priced EMS with niches in key product and technology categories focusing on advanced manufacturing technique and processes as well as design and development capabilities in these niche areas to compete successfully against with these organizations for the future.

     When we begin production of FPC boards and increase production of FPC subassemblies, we expect to face intense competition from large FPC manufacturers located in Taiwan, China, Korea, Singapore, North America and Europe as well as from large, established EMS providers that have developed or acquired, or, like us, are developing, their own FPC boards manufacturing capabilities, and have extensive experience in electronics assembly. Such competition could pressure us to provide discounts or lower prices to gain market share, which could adversely affect our margins and the profitability of our FPC business and could adversely affect our operating results as a whole.

Research and Development

     We invest in research and development for developing products, manufacturing and assembly technology that provide us with the potential to offer better and more technologically advanced services to our OEM customers or assist us in working with our OEM customers and in the design and development of future products. We plan to continue acquiring advanced design equipment and to enhance our technological expertise through continued training of our engineers and further hiring of qualified system engineers. These investments are intended to improve the speed, efficiency, costs and quality of our assembly processes.

     Additionally, we are responsible for the design and development of new products specified by our customers. We sell these products to OEM customers to be marketed to end users under the customers’ brand names. To date, we have successfully developed a number of CMOS sensor camera modules mobile phone accessories and game peripherals.

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Patents, Licenses and Trademarks

     We do not have any patents, licenses or trademarks on which our business is substantially dependent. Instead, we rely on our industry expertise, knowledge of niche products and technology and strong long-term relationships with our customers and suppliers.

Organizational Structure

     The chart below shows our organizational structure of our principal operating subsidiaries at December 31, 2007 upon completion of our 2007 Reorganization and giving pro forma effect to the February 2008 sale of our entire equity interest in JIC as of that date.

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Nam Tai Electronic & Electrical Products Limited (NTEEP) was incorporated in June 2003 and is a holding company for the subsidiaries shown in the chart above and discussed below. Shares of NTEEP has been listed on the Hong Kong Stock Exchange since April 28, 2004.

Namtai Electronic (Shenzhen) Co., Ltd. (Namtai Shenzhen) was originally established as Baoan (Nam Tai) Electronic Co. Ltd. in June 1989 as a contractual joint venture company with limited liability pursuant to the laws of China. Originally, the equity of Baoan (Nam Tai) Electronic Co. Ltd. was 70% owned by Nam Tai Electronic & Electrical Products Limited, a Hong Kong subsidiary of Nam Tai, and 30% owned by a PRC company. In 1992, the PRC company transferred all of its equity interest in the contractual joint venture to Nam Tai Electronic & Electrical Products Limited and Baoan (Nam Tai) Electronic Co. Ltd. changed its name to Namtai Electronic (Shenzhen) Co., Ltd. In December 2003, the equity interest in Namtai Shenzhen was transferred from Nam Tai Electronic & Electrical Products Limited (Hong Kong) to NTEEP and it became NTEEP’s wholly owned subsidiary. Its business was unaffected by the 2007 Reorganization and it continues to engage in the manufacture and sale of consumer electronic and telecommunications products.

Nam Tai Investments Consultant (Macao Commercial Offshore) Company Limited was established in August 2003 by the Company. In March 2004, the Company transferred the equity interest to NTEEP and this company then became a wholly owned subsidiary of NTEEP. Its principal business is to provide consultancy, administrative and data processing services to other companies in the NTEEP group. First Rich Holdings Limited (First Rich) incorporated on November 2, 2007 in the British Virgin Islands and prior to the 2007 Reorganization was a wholly owned subsidiary of JIC. It and its subsidiaries became part of the NTEEP Group in the 2007 Reorganization.

Top Eastern Investment Limited (Top Eastern) incorporated in November 6, 2007 in Hong Kong. It continues as the wholly owned subsidiary of First Rich and the holding company of Jetup.

Jetup Electronic (Shenzhen) Co. Ltd. (Jetup) was incorporated in 1993 in China and handles the manufacturing and processing production of LCD panels and modules through its factories in Baoan County, Shenzhen and was formerly in the JIC Group. Its business remains unaffected by the 2007 Reorganization and it continues to engage in the manufacture and sale of liquid crystal display products, now part of the NTEEP Group as a consequence of the 2007 Reorganization. Zastron Precision-Tech Limited (ZPT) was incorporated in June 2003 in the Cayman Islands. It is a wholly-owned subsidiary of NTEEP and the holding company of subsidiaries engage in the manufacture and sale of liquid crystal display modules, FPCs and FPC subassemblies. ZPT and its subsidiaries became part of the NTEEP Group in the 2007 Reorganization.

Zastron Electronic (Shenzhen) Co. Ltd. (Zastron Shenzhen) was organized as Zastron Plastic & Metal Products (Shenzhen) Ltd. in March 1992 as a company with limited liability company began producing metallic parts and PVC plastic products, much of which is used in the products manufactured in our principal manufacturing facilities. In August 2002, Zastron Plastic & Metal Products (Shenzhen) Ltd. changed its name to Zastron Electronic (Shenzhen) Co. Ltd. and expanded the nature of its business to include manufacturing of telecommunication products, LCD modules, TFT LCD modules and other products. It is one of our principal manufacturing arms, becoming part of the NTEEP Group in the 2007 Reorganization.

Zastron (Macao Commercial Offshore) Company Limited (Zastron Macao) was established in March 2004 in Macao, China and is a wholly owned subsidiary of ZPT. Its principal business is the provision of consultancy, administrative and data processing services to other companies in the Zastron group of companies and became part of the NTEEP Group in the 2007 Reorganization.

Zastron Precision-Tech (Wuxi) Co. Ltd. was established in November 2006 as a wholly owned foreign investment enterprise with limited liability and pursuant to the relevant laws of China. The Company will be engaged in the manufacturing and trading of LCD modules and other products and became part of the NTEEP Group in the 2007 Reorganization.

Zastron Precision-Flex (Wuxi) Co. Ltd. was established in November 2006 as a wholly owned foreign investment enterprise with limited liability and pursuant to the relevant laws of China. The Company will be engaged in the manufacturing and trading of FPC boards and FPC subassemblies and became part of the NTEEP Group in the 2007 Reorganization.

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Property, Plant and Equipment

     Our registered office in the British Virgin Islands is located at McNamara Chambers, P.O. Box 3342, Road Town, Tortola. Corporate administrative matters in the BVI are conducted at this office through our registered agent, McNamara Corporate Services Limited. The table below lists the locations, square footage, principal use and lease expiration dates of the facilities used in our principal operations as of December 31, 2007.

					Owned(1) or
		Approximate			lease
		Square			expiration
Location		Footage		Principal Use	date
Hong Kong			3,482	Administration		2008
Macao			2,479	Administration		2009
Shenzhen, China			557,835	Principal manufacturing facilities		2043/2049	(2)
			87,462	Administration		2043/2049	(2)
			350,585	Dormitories		2043/2049	(2)
			41,528	Cafeteria		2043
			33,826	Recreational		2049
Other existing facilities
Shenzhen, China			383,547	Manufacturing LCD panels and modules		2012
			32,005	Administration
			231,262	Dormitories
			22,259	Cafeteria
			14,548	Recreational
Shekou, Shenzhen, China			12,374	Software development		2008
Tokyo, Japan			904	Software development and marketing		2009
Planned new manufacturing facilities
Wuxi, Jiangsu Province, China	(3)			FPC boards and subassemblies		2056
	(3)			LCD modules and other products		2056
Guangming, Shenzhen, China	(3)			LCD modules and other products		2057

(1)	Only the PRC government and peasant collectives may own land in China. Our principal manufacturing facilities are located on land in which we have entered into a land lease agreement with the PRC government that gives us the right to use the land for 50 years. Similarly, the land which we have acquired in Wuxi, and will be acquiring the land in Guangming Shenzhen, will be by 50-year land lease. Our understanding of the practice as it exists today; at the expiration of the land lease, we may be given the right to renew the lease. For our other facilities, we have entered into factory building lease agreements with peasant collectives or other companies for 10 years or less.
(2)	Our principal manufacturing facilities occupy two pieces of land with 50-year land leases that we acquired in 1993 and 1999, respectively.
(3)	Raw land.

     In order to expand our production capacity, we completed the construction of a new factory in December 2004 consisting of approximately 265,000 square feet adjacent to our existing principal manufacturing facilities in

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Shenzhen, China. We commenced full operations in the new manufacturing facilities in April 2005. As of December 31, 2005, we had incurred $25.8 million to cover the cost of construction and fixtures and equipment for this new factory. The financing of these improvements to our manufacturing facilities were obtained from internal resources.

     In October 2004, we relocated our production facility for the LCD products segment to new factory premises, which are approximately 670,000 square feet, about twice the size of the former factory premises. This factory provides room for future expansion of production capacity. As of December 31, 2004, we had spent $7.7 million for this relocation and financed this amount with a combination of internal resources and bank financing. During 2005, a further of $5.4 million was spent for fixtures and equipment.

Hong Kong

     In October 2005, to align with the Company’s China-focused operations, Nam Tai restructured its subsidiaries to keep a minimal workforce in Hong Kong in order to support those subsidiaries that are listed on Hong Kong Stock Exchange, and to resolve outstanding legal proceedings and tax matters in Hong Kong. To achieve a more favorable and competitive cost structure, the Company relocated from the approximately 24,200 square feet of office space at Shun Tak Centre, or Shun Tak office, to the approximately 3,400 square feet office space at Suites 1506-1508, One Exchange Square, 8 Connaught Place, in the Central district in Hong Kong. In April 2006, the Company sold the Shun Tak office for approximately $20.2 million and a recognized gain of approximately $9.3 million.

     Until 1996, we owned approximately ten acres of land in Hong Kong carried on our books at a cost of approximately $523,000. Between 1997 and 2007, we sold approximately 8.2 acres of this land for net proceeds of $7.77 million; realizing a gain of $7.51million. We plan to sell the remaining land and, pending the sale, to continue to carry the land at a carrying value of approximately $96,000 on our books.

Macao

     In August 2003, we established our PRC headquarters in Macao, China and set up Nam Tai Macao in Macao, China. Macao, like Hong Kong, is a Special Administrative Region of China and has introduced an incentive program to attract investments to Macao. In March and November 2004, we further established Zastron Macao and JIC Macao in Macao, China, respectively. In 2006, we relocated our principal executive offices to Macao. We currently lease three offices and all of them under two-year leases expiring in July 2009. The monthly rental costs are approximately $942, $1,167 and $824 respectively.

Shenzhen, China

Principal Manufacturing Facilities

     Our principal manufacturing facilities are located in Baoan County, Shenzhen, China. In December 1993, we acquired a 50-year lease for the first piece of land for approximately $2.45 million. The first phase facility consisted of 160,000 square feet of manufacturing space, 39,000 square feet of offices, 212,000 square feet of new dormitories, 26,000 square feet of full service cafeteria, recreation facilities and a swimming pool. The total cost of this addition to our complex, excluding land, was approximately $21.8 million. In November 2000, we began construction of another addition to our factory complex. We completed construction in October 2002, adding a new five-story factory with 138,000 square feet of production facilities, including one floor for assembling, one floor of office space, one floor for warehouse use and two floors of class thousand clean room facilities. Prior to this addition, we had only one floor of class ten thousand clean room facilities at our factory complex. As of December 31, 2002, we had spent $9.1 million to complete the construction of the new facility. With this new addition, we had approximately 626,000 square feet of manufacturing space at our manufacturing facilities as of December 31, 2002, with only minimal additions in 2003.

     In July1999, we purchased another vacant lot of approximately 280,000 square feet (approximately 6.5 acres) bordering our manufacturing complex located in Shenzhen, China at the relevant time at a cost of approximately $1.2 million. We have built another factory consisting of approximately 265,000 square feet of space. Construction started in September 2003 and completed in December 2004. We commenced full operations in April 2005. During 2005, we built two additional blocks of dormitories. With this new addition, our principal manufacturing facilities then consisted of approximately 557,835 square feet of manufacturing space, 87,462 square feet of offices, 266,168 square feet of dormitories and 75,354 square feet of cafeteria space and a full services recreational building. As of December 31, 2005, we had incurred $25.8 million to cover the cost of construction and fixtures and equipment for the new factory. The financing for these improvements to our manufacturing facilities was obtained from internal resources.

LCD Factory

     In October 2003, Jetup Electronic (Shenzhen) Co., Ltd. entered into a tenancy agreement for new factory premises, which is also located in Baoan County, Shenzhen, China, and relocated to the new factory premises in

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October 2004. The new factory premises are about twice the size of the former factory premises and consist of 383,547 square feet of manufacturing space, 32,005 square feet of offices, 221,666 square feet of dormitories, and 36,807 square feet of cafeteria and recreational spaces. This new factory provides room for the future expansion of production capacity. As of December 31, 2004, we had spent $7.7 million for this relocation and financed this amount with a combination of internal resources and bank financing. During fiscal year 2005, a further $5.4 million was spent for fixtures and equipment.

Software Development

     We leased two offices in which we conducted software development. Our Shekou, Shenzhen, China office was approximately 12,374 square feet and the lease would expire in July 2008. The monthly rental was approximately $9,300. In July 2003, we opened an office in Tokyo, Japan to expand our sales and marketing coverage in Japan for our software development business. The Tokyo office had approximately 904 square feet, which we leased under a two-year lease expiring in June 2009. The monthly rental for the Tokyo office was approximately $1,800. On March 4, 2008, we disposed all our 572,594,978 ordinary shares of JIC, holding company of the software business, to independent third party for cash in the aggregate amount of approximately $51.1 million.

Future Expansion

     In September 2005, we signed a letter of intent with The People’s Government of Baoan District, Shenzhen, PRC, to purchase approximately 1.3 million square feet of land for future expansion. This new piece of land is approximately 30 minutes driving distance from the existing facilities of the Company and is more than double the space of the land of the existing facilities. In March 2006, the Company entered into an official project investment agreement with the Guangming Hi-Tech Industrial Park, Shenzhen, PRC, to purchase the land and an initial payment of approximately $1.5 million was paid in 2006. In June 2007, we entered into an official land use transfer agreement and a supplemental agreement with Shenzhen Municipal Bureau of State Land and Resources. We paid the balance of the land price of approximately $6.8 million in the fourth quarter of 2007. We are obligated to pay a relocation allowance to the local residents of approximately $645,500, which we will make in the first half of 2008. The financing for this amount was obtained from internal resources. We plan to commence the construction of a new factory in early 2009. The Company intends to use the new facility as its PRC headquarters and also to increase manufacturing capacity. We expect the additional space to meet our capacity needs in Shenzhen to 2015.

     In addition to the expansion project to build a new factory in Shenzhen, PRC, the Company continues to implement its plans to establish an industrial presence in Wuxi, Jiangsu Province, located on the East Coast of the PRC, approximately 80 miles Northwest of Shanghai. In October 2006, we entered into the agreements with the Wuxi government for the project and in December 2006 completed the land transfer for two parcels of real property, approximately three miles apart and with approximately 470,000 square feet and 515,000 square feet respectively. The total land price for these lands was approximately $1.3 million, which we paid in the fourth quarter of 2006. We started the construction of our new Wuxi facility in January 2008 with respect to one of the parcels and we hope to begin mass production of FPC boards and FPC subassemblies there in early to mid-2009.

     We are currently considering the best ues of the second parcel of land in Wuxi and Guangming Hi-Tech Industrial Park, given the amalgamated manufacturing operations post our re-organization.

ITEM 4A. UNRESOLVED STAFF COMMENTS

We do not have any unresolved Staff comments.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     Except for statements of historical facts, this section contains forward-looking statements involving risks and uncertainties. You can identify these statements by forward-looking words including “expect”, “anticipate”, “believe”, “seek”, “estimate”, “intends”, “should”, or “may”. Forward-looking statements are not guarantees of our future performance or results and our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the section of this Report entitled

     Item 3. Key Information – Risk Factors. This section should be read in conjunction with our consolidated financial statements included as Item18 of this Report.

Operating Results

Overview

     We are an electronics manufacturing and design services provider to a select group of the world’s leading OEMs of telecommunications and consumer electronic products. Through our electronics manufacturing services operations, we manufacture electronic components and subassemblies, including LCD panels, LCD display modules, RF modules, DAB modules, FPC board, FPC subassemblies, image sensors modules and PCBAs for headsets containing Bluetooth wireless technology. These components are used in numerous electronic products, including mobile phones, laptop computers, digital cameras, electronic toys, and handheld video game devices. We also manufacture finished products, including entertainment devices, mobile phone accessories and educational products.

     We assist our OEM customers in the design and development of their products and furnish full turnkey services that with our state-of-art manufacturing technologies. Our services include software development services, firmwave, and mechanical design, parts and components purchasing, product industrialization, and assembly into finished products, or electronic subassemblies with full quality testing and assurance. These services are value-added and assist us in obtaining new business. We are also capable to provide ODM services, in which we design and develop proprietary products specified by our customers that are sold by our OEM customers using their brand name.

Net Sales and Cost of Sales

     We derive our net sales principally from manufacturing services that we provide to OEMs of telecommunications and consumer electronic products. The market for the products we manufacture is generally characterized by declining unit prices and short product life cycles. Sales to our OEM customers are primarily based on purchase orders we receive from time to time rather than firm, long-term purchase commitments from our customers. We recognize sales, net of product returns and warranty costs, typically at the time of product shipment or, in some cases, as services are rendered.

     Our production is typically based on purchase orders received from OEM customers. However, for certain customers, we will occasionally purchase raw materials based on such customers’ rolling forecasts. Purchase orders are often supported by letters of credit or written confirmation from our OEM customers. We generally do not obtain firm, long-term commitments from our customers. Uncertain economic conditions and our general lack of long-term purchase commitments with our customers make it difficult for us to predict our revenue accurately over the longer term. Even in those cases where customers are contractually obligated to purchase products from us or to repurchase unused inventory from us, we may elect not to immediately enforce our contractual rights because of the long-term nature of our customer relationships and for other business reasons, and instead may negotiate accommodations with customers regarding particular situations.

Gross Margins

     Complex products generally have relatively high material costs as a percentage of total unit costs and accordingly our strategic shift to produce more of such products has historically been a factor that has adversely affected our gross margins. This is the primary reason for the decline in our gross margins between 2003 and 2007. During this period, we diversified our product mix from predominantly low complexity electronic products, including calculators and electronic dictionaries, to include more complex components and subassemblies, like LCD modules, RF modules and FPC subassemblies. Despite the lower gross margin on more complex products, we believe the opportunity for growth in the demand for these complex products justifies the shift in our strategic focus. Furthermore, we believe the experience in manufacturing processes and know-how that we have developed from producing more complex products are a competitive advantage for us relative to some of our competitors.

     The increased costs associated with developing advanced manufacturing techniques to produce complex products on a mass scale and at a low cost have also negatively impacted our gross margins. For example, in our initial production runs of LCD modules, RF modules, and color and TFT LCD modules, we experienced low production yields and other inefficiencies that caused our gross margin to decrease. Although we believe we have improved the efficiency and quality of our manufacturing processes relating to LCD modules, RF modules, and

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color and TFT LCD modules, we may not be able to improve or maintain our gross margin for these products. Furthermore, in 2007, we began to develop and produce FPC boards in our existing manufacturing facilities. The FPC boards are manufactured by subjecting the base materials to multiple processes, such as drilling, screening, photo imaging, etching, plating and finishing.

     The increased costs associated with developing and manufacturing the existing and other new complex products could have a negative impact on our future gross margins. The complex manufacturing processes involved in the production of complex products is also capital intensive, thereby increasing our fixed overhead costs. It has been our strategy to shift our focus more to the business of key components subassembly. The key components subassembly business generally accounts for relatively lower gross profit margin business. During 2007, the significant drop in the unit price of key component subassemblies for mobile phone further affected adversely our gross profit margins.

Income Taxes

     Under current BVI law, our income is not subject to taxation. Subsidiaries operating in Hong Kong and China are subject to income taxes as described below, and our subsidiary operating in Macao is exempted from income taxes. This would be valid unless the Macao government changes its policy towards offshore companies.

     Under current Cayman Islands law, NTEEP, ZPT and JIC are not subject to profit tax in the Cayman Islands as they have no business operations in the Cayman Islands. However, they may be subject to Hong Kong income taxes as described below since they are registered in Hong Kong.

     The provision for current income taxes of the subsidiaries operating in Hong Kong has been calculated by applying the current rate of taxation of 17.5% for 2005, 2006 and 2007 to the estimated taxable income earned in or derived from Hong Kong during the applicable period.

     For 2007, the basic corporate tax rate for FIEs in China, such as our PRC subsidiaries, was 33% (30% state tax and 3% local tax). However, because all of our PRC subsidiaries are located in Shenzhen and are involved in production operations, they qualify for a special reduced state tax rate of 15%. In addition, the local tax authorities in the regions in which our subsidiaries operate in Shenzhen are not currently assessing any local tax, but that could change at any time. Moreover, several of our subsidiaries in China are entitled to certain tax benefits and certain of our subsidiaries in China have qualified for tax refunds as a result of reinvesting their profits earned in previous years in China.

     However, in March 2007, the PRC National People’s Congress promulated the new Enterprise Income Tax Law. This replaces the foreign enterprise income tax law and takes effect from January 1, 2008. The current foreign enterprise income tax law will be superseded on January 1, 2008. Under the new law, all enterprises (both domestic companies and FIEs) will have one uniform tax rate of 25%. However, PRC government allows for a five years transition period and FIEs are expected to increase their 15% tax rate gradually to 25% in year 2012. Besides, the new Enterprise Income Tax Law does not have provision for tax refund by way of capital injection its share of profits from FIEs. Thus, the Company does not expect any further benefit will be obtained after withdrawal of this tax concession from year 2008. In addition, there will be no reduction in the tax rate for FIEs which export 70% or more of the production value of their products from year 2008. Thus, the Company does not expect any further benefit for year 2008 after the implementation of the new law.

     Efforts by the Chinese government to increase tax revenues could result in decisions or interpretations of the tax laws by the China’s tax authorities that are unfavorable to us and which increase our future tax liabilities, or deny us expected refunds. Changes in PRC tax laws or their interpretation or application may subject us to additional PRC taxation in the future. For example, following the implementation of the Enterprise Income Tax Law effective January 1, 2008, the State Council recently announced the transition rules for preferential tax policies (Guofa [2007] No.39) of January 2, 2008, for eligible enterprises previously subject to a 15% tax rate or 24% tax rate. As so announced, the new enterprise income tax rates are:

	Rate under EIT for enterprises			Rate under EIT for enterprises
Tax Year	previously subject to 15% tax rate			previously subject to 24% tax rate
2008		18	%		25	%
2009		20	%		25	%
2010		22	%		25	%
2011		24	%		25	%
2012		25	%		25	%

     Our effective tax rates were 1%, 1% and 4% for each of the three years ended December 31, 2005, 2006 and 2007 respectively. The significant factors that caused our effective tax rates to differ from the applicable statutory rates of 15% were as follows:

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	Year Ended December 31,
	2005			2006			2007
Applicable statutory tax rates		15	%		15	%		15	%
Effect of loss/income for which no income tax benefit/expense is receivable/payable		(8	%)		(5	%)		(4	%)
Tax holidays and incentives		(4	%)		(3	%)		(4	%)
Effect of China tax concessions, giving rise to no China tax liability		(4	%)		(4	%)		—
Defer tax credit		—			—			(3	%)
Other items which are not deductible (assessable) for tax purposes		2	%		(2	%)		—
Effective tax rates		1	%		1	%		4	%

Strategic Investments

     An element of our strategy has been to make investments in companies that provide the potential to complement our existing products and services, become new customers, augment our market coverage and sales ability, enhance our technological capabilities and expand our service offerings. We account for investments of less than 20% at fair value and we account for investments between 20% and 50% under the equity method. Our material investments over the last five years include:

     Alpha Star/JCT. In January 2003, we invested $10.0 million for a 25% equity interest in Alpha Star, the ultimate holding company of JCT. JCT is engaged in the design, development and marketing of wireless communication terminals and wireless application software and is using us to manufacture wireless communication terminals and their related modules. In September 2004, we made an impairment to write down our $10.0 million investment in Alpha Star to a fair value of approximately $3.0 million based on the analysis of the estimated fair value of Alpha Star prepared by management. As of December 31, 2004, another analysis of estimated fair value had been conducted by management and no further impairment to the carrying value of the investment was made. From January to August 2005, this affiliated company continued to be loss making. We disposed of our entire stake in Alpha Star in August 2005 to the majority shareholders of Alpha Star with sales proceeds of $6.5 million resulting in a gain of $3.6 million in 2005.

     TCL group. Over the period from September 2000 through November 2002, we made three investments in the TCL group of companies and disposed of a portion of the investment in 2002 and 2003. The TCL group of companies is a leading OEM for numerous consumer electronics and telecommunications products in the domestic PRC market.

     In September 2000, we made a strategic investment of $2.0 million to acquire a 5% indirect equity interest (through a 25% direct equity interest in Mate Fair) in both TCL Mobile Communication (HK) Co., Ltd. and Huizhou TCL Mobile Communication Co., Ltd., together known as TCL Mobile. TCL Mobile is engaged in manufacturing, distributing and trading of digital mobile phones and accessories in China and overseas markets.

     In January 2002, we acquired a 6% equity interest in TCL Corporation (formerly known as TCL Holdings Corporation Ltd.), the parent of the TCL group of companies, for approximately $12.0 million. In January 2004, TCL Corporation listed its A-shares on the Shenzhen Stock Exchange at $0.52, or RMB4.26, per A-share. The Company’s interest in TCL Corporation has then been diluted to 3.69%, represented by 95.52 million promoter’s shares of TCL Corporation after its initial public offering. As at December 31, 2005, the Company recognized an unrealized gain of $0.95 million, based on the Company’s cost of $11.97 million. The Company’s interest in TCL Corporation was recorded at fair value of $13.33 million based on a comparable companies analysis and taking into account of a liquidity discount. However, in April 2006, pursuant to the split share structure reform (“SSR”), the Company gave away 15.62% of its total shares to floating shareholders as consideration and thereafter all its restricted shares will become floating shares subject to the regulations of China Securities Regulation Commission and can become tradable 12 months from April 20, 2006, which was the first trading day after the SSR was formally implemented. The Company’s interest in TCL Corporation has been further reduced from 3.69% to 3.12%, representing 80.60 million shares. As a result of the reduction in the numbers of shares in TCL Corporation, the Company recorded a loss of $1.3 million ($1.9 million before sharing with minority interests) in the second quarter of 2006. As at December 31, 2006, the Company’s interest in TCL Corporation was recorded at fair value of $24.36 million and with an unrealized gain of $9.93 million. In April 2007, we sold all of our 80.6 million shares of TCL Corporation through the Shenzhen Stock Exchange for an aggregate of approximately $54 million, resulting in a one-off gain of approximately $28 million, net of the portion attributable to minority interests.

     In April 2004, we increased our shareholding in TCL Mobile from approximately 3% to 9% through acquiring Jasper Ace, which directly holds 9% equity interest in TCL Mobile, at a consideration of approximately

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$102.2 million. The consideration was satisfied, by the exchange of our 72.2% equity interest in Mate Fair, plus cash of $25 million and the issuance of 1,416,764 new Nam Tai shares and resulted in a net investment cost of $79.5 million. In July, Nam Tai transferred all its shares in TCL Mobile to TCL Communication in exchange for 90 shares of TCL Communication. In August 2004, Nam Tai further subscribed for 254,474,910 shares in TCL Communication at a consideration of approximately $16 million. The consideration was satisfied by the dividend receivable from TCL Communication. Together with the 90 shares it received in July 2004, Nam Tai in total holds 254,475,000 shares in TCL Communication, representing 9% of the shareholding of TCL Communication. In September 2004, shares of TCL Communication were listed on the Hong Kong Stock Exchange by way of introduction. There were no new shares issued or sold in connection with the listing, and therefore no dilution to Nam Tai’s original stake in TCL Communication. As of December 31, 2004, the Company’s investment in TCL Communication was stated at fair value based on the traded market price of TCL Communication’s shares. We recognized an impairment loss of $58.3 million as at December 31, 2004. In the second quarter of 2005, a further $6.5 million impairment loss was recognized. Because of a share swap between TCL Communication and Alcatel on July 18, 2005, our shareholding in TCL Communication decreased from 9% to 8.57%. During the period from August to December 2005, we disposed of our entire stake in TCL Communication realizing proceeds of $11.0 million, which resulted in a net realized and accumulated losses of $68.5 million.

     The following details the impact of our strategic investments on our consolidated statements of income for each of the years ended December 31, 2005, 2006 and 2007:

	Year ended December 31,
	2005			2006			2007
Income (loss) from Investments Stated at Fair Value
Dividend income received from TCL Corporation:
(Loss) Gain on disposal of marketable securities		(3,686	)		—			43,815
Impairment loss on marketable securities		(6,525	)		—			—
Loss on marketable securities arising from split share structure reform		—			(1,869	)		—
Gain on disposal of an affiliated company		3,631			—			—
Equity in loss of an affiliated company		(186	)		—			—

Critical Accounting Policies and Estimates

     The preparation of our financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions under different future circumstances. We have identified the following critical accounting policies that affect the more significant judgments and estimates used in the preparation of our consolidated financial statements.

     For further discussion of our significant accounting policies, refer to Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements.

Marketable Securities

     Marketable securities held by Nam Tai are principally equity securities and are classified as available-for-sale securities. Securities classified as available-for-sale are stated at fair value with unrealized gains and losses recorded as a separate component of accumulated other comprehensive income (loss). Fair value is determined by reference to market price or analysis conducted by independent appraiser. In the event where the fair value of the securities has been below the carrying value for a period of time, we will assess whether this decline in value is other-than-temporary.

     Our assessment includes the consideration of the duration and severity of the decline in values and our ability and intent to hold the investments for a reasonable period of time sufficient for a forecasted recovery of the fair value up to or beyond the cost of the investment, and an assessment of the evidence indicating that the cost of the investment is recoverable within a reasonable period of time which outweighs the evidence to the contrary. If it is determined that the decline is other-than-temporary, an impairment charge to the income statement will be made.

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Valuation of long-lived assets, including purchased intangible assets and valuation of goodwill

     The Company reviews the carrying value of its long-lived assets, including purchased intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

     The Company assesses the recoverability of the carrying value of long-lived assets, including purchased intangible assets by first grouping its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows largely independent of the cash flows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected to arise from the use of and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, the Company records an impairment charge to the extent the carrying value of the long-lived asset exceeds its fair value. The Company determines fair value through quoted market prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis of discounted cash flows or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number of estimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rate and long-term growth rate.

     To assess goodwill for impairment, the Company performs an assessment of the carrying value of its reporting units at least on an annual basis or when events and changes in circumstances occur that would more likely than not reduce the fair value of the Company’s reporting units below their carrying value. If the carrying value of a reporting unit exceeds its fair value, the Company would perform the second step in its assessment process and would record an impairment charge to earnings to the extent the carrying amount of the reporting unit goodwill exceeds its implied fair value. The Company estimates the fair value of its reporting units through internal analysis and external independent valuations, which utilize income and market valuation approaches through the application of capitalized earnings, discounted cash flow and market comparable methods. These valuation techniques are based on a number of estimates and assumptions, including the projected future operating results of the reporting unit, discount rate, long-term growth rate and appropriate market comparables.

     The Company’s assessments of impairment of long-lived assets and goodwill, and its periodic review of the remaining useful lives of its long-lived assets are an integral part of the Company’s ongoing strategic review of its business and operations. Therefore, future changes in the Company’s strategy and other changes in the operations of the Company could impact the projected future operating results that are inherent in the Company’s estimates of fair value, resulting in impairments in the future. Additionally, other changes in the estimates and assumptions, including the discount rate and expected long-term growth rate, which drive the valuation techniques employed to estimate the fair value of long-lived assets and goodwill could change and, therefore, impact the assessments of impairment in the future.

     In performing the annual assessment of goodwill for impairment for the years ended December 31, 2006 and 2007, the Company determined that none of the reporting units’ carrying values were close to exceeding their respective fair values.

Accruals and provisions for loss contingencies

     We make provisions for all loss contingencies when information available to us prior to the issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and the amount of loss can be reasonably estimated.

     For provisions or accruals related to litigation, we make provisions based on information from legal counsels and the best estimation of management. As discussed in Note (15b) to our consolidated financial statements, we are involved in various legal proceedings and contingencies. We assess our potential liability for the Tele-Art Inc. matter in accordance with Statement of Financial Accounting Standards No.5, “Accounting for Contingencies”, or SFAS 5. SFAS 5 requires a liability to be recorded based on our estimate of the probable cost of the resolution of a contingency. The actual resolution of this contingency may differ from our estimates. If the contingency were settled for an amount greater than our estimate, a future charge to income would result. Likewise, if the contingency were settled for an amount that is less than our estimate, a future credit to income would result.

Summary of Results

     The increase in sales was primarily because of strong growth in demand for LCD modules and FPC subassemblies. The increase in our net sales base year-over-year represents stronger demand from existing customers, as well as growth from new and existing customers.

     The following table sets forth key operating results (in thousands, except per share data) for the years ended December 31, 2005, 2006 and 2007:

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	Year Ended December 31,						% increase/(decrease)
	2005		2006		2007		2006 vs 2005			2007 vs 2006
Net sales	$	797,237	$	870,174	$	780,822		9.1	%		(10.3	%)
Gross profit		92,923		86,221		87,018		(7.2	%)		0.9	%
Operating income		52,656		42,480		40,670		(19.3	%)		(4.3	%)
Net income		51,306		40,756		69,503		(20.6	%)		70.5	%
Basic earnings per share		1.19		0.93		1.56		(21.8	%)		67.7	%
Diluted earnings per share		1.19		0.93		1.55		(21.8	%)		66.7	%

Key Performance Indicators

     The following table sets forth, for the quarterly periods indicated, certain of management’s key financial performance indicators that management utilizes to assess the Company’s operating results:

	Three Months Ended
	December 31,	September 30,	June 30,	March 31,
	2006	2006	2006	2006
Sales cycle (1)	4 days	5 days	11 days	10 days
Inventory turnover (2)	14 days	15 days	14 days	13 days
Days in accounts receivable (3)	49 days	55 days	49 days	51 days
Days in accounts payable (4)	59 days	65 days	52 days	54 days

	2007	2007	2007	2007
Sales cycle (1)	6 days	11 days	9 days	12 days
Inventory turnover (2)	17 days	17 days	19 days	16 days
Days in accounts receivable (3)	45 days	53 days	48 days	52 days
Days in accounts payable (4)	56 days	59 days	58 days	56 days

(1)	The sales cycle is calculated as the sum of days in accounts receivable and days in inventory, less the days in accounts payable.
(2)	Inventory turnover is calculated as the ratio of inventory, net, at period end divided by year to date of cost of sales.
(3)	Days in accounts receivable is calculated as the ratio of accounts receivable, net, at period end divided by year date average daily net sales.
(4)	Days in accounts payable is calculated as the ratio of accounts payable, net, at period end divided by year to date average daily net cost of sales.

Results of Operations

     The following table presents selected consolidated financial information stated as a percentage of net sales for the years ended December 31, 2005, 2006 and 2007 (amounts may not foot because of rounding).

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	Year Ended December 31,
	2005			2006			2007
Net Sales		100.0	%		100.0	%		100.0	%
Cost of sales		88.3			90.1			88.9
Gross profit		11.7			9.9			11.1
Gain on disposal of asset held for sale		—			1.1			—
Selling, general and administrative expenses		(4.2	)		(3.5	)		(4.7	)
Research and development expenses		(0.9	)		(0.9	)		(1.2	)
Losses arising from judgment to reinstate redeemed shares		—			(1.7	)		—
Income from operations		6.6			4.9			5.2
Other (expense) income, net		0.0			(0.2	)		0.3
Dividend income from marketable securities and investments		0.1			—			—
Gain on sale of subsidiaries’ shares		1.3			—			0.1
Gain on disposal of an affiliated company		0.4			—			—
Impairment loss on marketable securities		(0.8	)		—			—
Loss on marketable securities arising from split share structure reform		—			(0.2	)		—
(Loss) gain on disposal of marketable securities		(0.5)			—			5.6
Interest income		0.5			1.0			1.2
Interest expense		(0.1	)		(0.1	)		(0.1	)
Income before income taxes, minority interests and equity in loss of an affiliated company		7.5			5.4			12.3
Income taxes		(0.1	)		0.0			(0.5	)
Income before minority interests and equity in loss of an affiliated company		7.4			5.4			11.8
Minority interests		(1.0	)		(0.7	)		(2.9	)
Equity in loss of an affiliated company		0.0			—			—
Net income		6.4	%		4.7	%		8.9	%

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

     Net Sales. Our net sales decreased 10.3% to $780.8 million for 2007, down from $870.2 million in 2006 primarily as a consequence of a decline in business from the Telecommunication Components Assembly (“TCA”) segment. The TCA segment is dependent on demand in the mobile phone market and one of our indirect customers suffered a substantial drop in sales volume in its mobile devices business in Asia and Europe. Thus, we and other participants in the mobile phone supply chain were inevitably affected in the year 2007. Despite the business environment was extremely competitive and challenging, from our efforts focusing on sales in other segments, we were able to increase sales in both our Consumer Electronics and Communication Products (“CECP”) and LCD Products (“LCDP”) segment by 59.1% and 29.7% respectively. The increased sales levels were because of the addition of new customers and increases in sales to existing customers in these business segments.

     The distribution of revenue across our reportable segments has fluctuated, and we expect it to continue to fluctuate, as a result of numerous factors, including but not limited to increased business from new and existing customers, fluctuations in customer demand and seasonality. The dollar amounts (in thousands) and percentages of our net sales by reportable segment and product category for the years ended December 31, 2006 and 2007 were as follows:

	Year ended December 31,
	2006					2007					2007 vs 2006
	Dollars		Percent			Dollars		Percent			Percent
CECP	$	178,320		21	%	$	283,757		36	%		59.1	%
TCA		627,199		72	%		413,199		53	%		(34.1	%)
LCDP		64,655		7	%		83,866		11	%		29.7	%
Total		870,174		100	%		780,822		100	%		(10.3	%)

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     In the CECP segment, net sales increased by about 59.1% in 2007, mainly because sales of mobile phone accessories, such as speaker stands and headsets containing Bluetooth wireless technology, increased by 48.6% or $50.3 million. Home entertainment products, such as gaming accessories and USB microphone, increased by 88.1% or $32.1 million. Sales of educational devices, mainly represented by FLY Fusion^TM Pentop Computers*, also increased by 53.5% or $13.7 million. Lastly, sales of optical products, mainly represented by CMOS sensor, increased by 102% or $10.1 million.

     In the TCA segment, overall sales significantly decreased by about 34.1%. This was driven primarily by the reduction in sales of LCD modules of 20.7%, or $46.4 million. Besides, sales of FPC subassemblies sharply dropped by 42% or $163.4 million.

     In the LCDP segment, overall sales increased by 29.7%, principally attributable COG products.

     Gross Profit. In terms of dollar value, gross profit for 2007, however, still increased by $0.8 million from 2006, mainly because the shift of sales mix to higher margin products in CECP segment which accounted for 36.4% of sales, compared to only 21% of net sales in 2006. As a result, gross margins increased to 11.1% of net sales in 2007 from 9.9% in 2006.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $36.6 million, or 4.7% of net sales in 2007 from $30.7 million, or 3.5% of net sales in 2006. The $5.9 million increase was mainly attributable to $1.9 million professional and related expenses incurred for professional fees and other expenses to propose and implement the 2007 Reorganization, $1.3 million in audit, legal and professional fees, $0.7 million in salaries and benefits and $2.1 million in selling expenses.

     Research and Development Expenses. Research and development expenses in 2007 increased to $9.8 million from $7.9 million in 2006 accounting for 1.2% and 0.9% of net sales for 2007 and 2006, respectively. The absolute dollar increase was primarily attributable to increases in salary and wages to employ additional engineers recruited to support our R&D activities, including our design of production processes, the development of new products and products associated with customer design-related programs.

     Provision of losses arising from the judgment to reinstate the redeemed shares. Please see the discussion of our 2006 results, below. We did not suffer comparable losses in 2007.

     Other Income (Expenses) Net. During 2007, other income was $2.2 million which mainly represented by exchange gain but was partially offset by other non-operating charges.

     Gain on Sale of Subsidiaries’ Shares. The Company has disposed 29,199,000 shares of NTEEP and 10,728,000 shares of J.I.C. in June 2007 for an aggregated gain of $0.4 million. There was no disposal of subsidiaries’ share in 2006

     Loss on marketable securities arising from split share structure reform. In April 2006, pursuant to the Split Share Structure Reform (“SSR”) of TCL Corporation, the Company’s interest in TCL Corporation has been changed from 95,516,112 promoter shares to 80,600,173 A-shares. As a result of the reduction in the numbers of shares in TCL Corporation, the Company recorded a loss of $1.3 million ($1.9 million before sharing with minority interests). The A-shares became tradable on the Shenzhen Stock Exchange after the expiration of 12 months from April20, 2006, which was the first trading day after the SSR was formally implemented. As at December 31, 2006, investment in TCL corporation was valued at the market share price with an estimated fair value of $24.36 million.

     Gain on disposal of marketable securities. In April 2007, we disposed of all 80,600,173 A shares of TCL Corporation on April 20 and April 23, 2007, through market sales on the Shenzhen Stock Exchange for an aggregate of approximately $54.0 million, resulting in a one-off gain of approximately $43.8 million.

     Interest Income. Interest income was $9.2 million, which increased $0.7 million from $8.5 million in 2006. The increase was primarily the result of higher bank and cash balances, especially after realizing the gain on the disposal of marketable securities.

     Interest Expense. Interest expense decreased to $452,000 in 2007 from $602,000 in 2006. This decrease was primarily a result of repayment of a short-term bank loan at the end of year 2006.

     Income Taxes. The Company continued to record a low effective tax rate of about 4.2% on income before income taxes and minority interests. This was entirely attributable to the income tax provision of $7.3 million, partially offset by the deferred tax credit of $3.3 million recognized during the year as a result of the enactment of the new Enterprise Income Tax Law.

     Minority Interests. Minority interest increased to $22.3 million in 2007 from $6.2 million in 2006. The increase was primarily the result of the increase in minority shareholders’ share of NTEEP’s profit to approximately $21.8 million during 2007. In addition, the minority shareholders’ share of profits of the JIC group for 2007 decreased to $459,000 from $903,000 in 2006.

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     Net Income. Net income, increase to $69.5 million in 2007 from $40.8 million in 2006. The following table sets forth, for the years indicated, net income/(loss) by reportable segment expressed as a dollar amount (in millions) and as a percentage of net income.

	Year ended December 31,
		2005					2006					2007
CECP	$	16.8		33	%	$	12.3		30	%	$	54.5		78	%
TCA		35.2		69	%		31.4		77	%		16.0		23	%
LCDP		3.2		6	%		2.6		6	%		1.3		2	%
Corporate		(3.9	)	(8	%)		(5.5	)	(13	%)		(2.3	)	(3	%)
Total	$	51.3		100	%	$	40.8		100	%	$	69.5		100	%

     Net income in CECP segment increased to $54.5 million from $12.3 million. The major reason was the substantial increase in sales and resulting profit contributed in various products such as mobile phone accessories, home entertainment products and also the educational devices in 2007. Although selling, general and administrative expenses and research and development expenses were $6.1 million higher than in 2006, interest income also increased by $2.0 million and the net gain on disposal of marketable securities was $28.0 million in 2007.

     In TCA segment, net income decreased to $16.0 million from $31.4 million. The major reason was competitive pricing pressures requiring us to lower unit prices and downturn of sales of a major customer in 2007. As TCA segment experienced a less than 10% drop in business volume from existing customers for its FPC subassemblies and LCD modules and averaged gross margin dropped from 7.2% to 7.0%, gross profit dropped by $16.4 million. Even though operating expenses decreased by $0.2 million and interest income increased by $0.2 million, the resulting net income decreased by $15.4 million.

     In LCDP segment, net income decreased to $1.3 million from $2.6 million. Owing to the market competition and increase in cost of sales, gross profit dropped by about $1.5 million. Selling, general and administrative expenses also increased by $1.4 million but partially offset by a deferred tax credit of $1.5 million, thus, net income still decreased by $1.3 million.

     Year 2006 net loss in corporate segment represented by the losses arising from the judgment to reinstate redeemed shares of $14.5 million, partially offset by the $9.3 million gain on disposal of asset held for sale. In year 2007, net loss of $2.3 million was primarily due to operating expenses, partially offset by the interest income.

     Year Ended December31, 2006 Compared to Year Ended December 31, 2005

     Net Sales. Our net sales increased 9.1% to $870.2 million for 2006, up from $797.2 million in 2005. Sales of CECP, TCA and LCDP increased 5.5%, 10.0% and 11.3% respectively. The increased sales levels were because of the addition of new customers and increases in sales to existing customers in these business segments.

	Year Ended December 31,
		2005					2006				2006 vs 2005
	Dollars		Percent			Dollars		Percent			Percent
CECP	$	169,056		21	%	$	178,320		21	%		5.5	%
TCA		570,069		72	%		627,199		72	%		10	%
LCDP		58,112		7	%		64,655		7	%		11.3	%
Total	$	797,237		100	%	$	870,174		100	%		26.8	%

     In the CECP segment, net sales increased by about 5.5% mainly because sales of mobile phone accessories increased by 135% or $59.5 million, compared with year 2005. However, this increase was offset by the decreases of $32.5 million, or 77%, in sales of optical products and $16.5 million, or 31%, of home entertainment products.

     Sales of education devices remained relatively unchanged and software development services still accounts for less than 1% of total net sales of the group.

     In the TCA segment, overall sales increased by about 10%. This was driven primarily by the increase in sales of LCD modules of 60%, or $83.8 million, but was partially offset by the decreased sales of semi-knock down, or SKD, handsets, front light panel assemblies for games and PCB subassembly of $6.2 million, $8.6 million and $9.9 million, respectively. Sales of FPC subassemblies in 2006 remained at about the same level as in 2005.

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     In the LCDP segment, overall sales increased by 11.3%, principally attributable to STN and COG products.

     Gross Profit. In terms of dollar value, gross profit for 2006 decreased by $6.7 million from 2005, because of increased material costs. Gross margins decreased to 9.9% of net sales in 2006 from 11.7% in 2005. Generally, the decreases were attributable primarily to competitive pressures requiring us to reduce unit selling prices. Although the Company experienced growth in business volume from existing customers, this growth was insufficient to offset the adverse effects of this pressure to reduce unit prices, resulting in lower gross profit.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $2.4 million, or 3.5% of net sales in 2006 from $33.0 million, or 4.1% of net sales in 2005. The $2.4 million decrease was primarily attributable to the gain on disposal of fixed assets, reduction in office expenses, bad debts, advertising and promotion, bank charges and restructuring cost in relation to Hong Kong office in year 2005. The decrease as a percentage of net sales was also primarily attributable to the increased revenue base in 2006.

     Research and Development Expenses. Research and development expenses in 2006 increased to $7.9 million from $7.2 million in 2005 accounting for 0.9% of net sales for 2005 and 2006. The absolute dollar increase was primarily attributable to the recruitment of more engineers to support our R&D activities, including design of production process, development of new products and products associated with customer design-related programs.

     Other Expenses Net. During 2006, other expenses were $1.3 million which mainly represented by other non-operating charges. The Company did not have any dividend income received from marketable securities in 2006 but $0.6 million dividend income was received from our investment in TCL Corporation during the year of 2005.

     Gain on Sale of Subsidiaries’ Shares. There was no disposal of subsidiaries’ share in 2006. In May 2005, NTEEP acquired 100% interest in Namtek Software from the Company and Asano Company Limited, and as a result of this series of linked transactions, the Company effectively disposed of 7.94% interest in Namtek Software, resulting in a gain of $1.9 million. During 2005, the Company disposed 52,574,000 million shares of NTEEP resulting in a gain of $8.2 million.

     Loss on marketable securities arising from split share structure reform. In April 2006, pursuant to the Split Share Structure Reform (“SSR”) of TCL Corporation, the Company’s interest in TCL Corporation has been changed from 95,516,112 promoter shares to 80,600,173 A-shares. As a result of the reduction in the numbers of shares in TCL Corporation, the Company recorded a loss of $1.3 million ($1.9 million before sharing with minority interests). The A-shares became tradable on the Shenzhen Stock Exchange after the expiration of 12 months from April 20, 2006, which was the first trading day after the SSR was formally implemented. As at December 31, 2006, investment in TCL corporation was valued at the market share price with an estimated fair value of $24.36 million.

     Provision of losses arising from the judgment to reinstate the redeemed shares. In the fourth quarter of 2006, we recorded $14.5 million of losses arising from a judgment rendered against us to reinstate 1,017,149 (giving effect to our three-for-one stock split and one-for-ten stock dividend that we made in 2003) shares we had redeemed in 1999 and 2002. We determined the amount of this loss after taking into account the total issue price of the 1,017,149 redeemed shares at the market price of Nam Tai shares on November20, 2006 (the date of the Judgment); the estimated costs and expenses of the Bank of China and Tele-Art Inc.’s initial liquidator that Nam Tai expects will be claimed in connection with the Privy Council litigation proceedings; and a reversal of amounts Nam Tai previously reserved in its financial statements for potential losses to be incurred as result of the share redemptions in 1999 and 2002 respectively.

     Interest Income. Interest income was $8.5 million, which increased $4.6 million from $3.9 million in 2005. The increase was primarily the result of higher average bank balances and increase in interest rate.

     Interest Expense. Interest expense increased to $602,000 in 2006 from $438,000 in 2005. This increase was primarily a result of increase in interest rates.

     Income Taxes. The Company enjoyed a low effective tax rate of about 1% on income before income taxes and minority interests as certain of our subsidiaries in PRC have continuously qualified for tax refunds as a result of reinvesting their profits earned in previous years in PRC.

     Minority Interests. Minority interest decreased to $6.2 million in 2006 from $8.0 million in 2005. The decrease was primarily the result of the decrease in minority shareholders’ share of NTEEP’s profit to approximately $5.3 million during 2006. In addition, the minority shareholders’ share of profits of the JIC group for 2006 decreased to $903,000 from $1.3 million in 2005.

     Equity in Loss of Affiliated Companies. There was no further sharing in equity in loss of affiliated companies after the disposal of investment in Alpha Star in year 2005.

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     Net Income. Net income, decrease to $40.8 million in 2006 from $51.3 million in 2005. The following table sets forth, for the years indicated, net income/(loss) by reportable segment expressed as a dollar amount (in millions) and as a percentage of net income.

     Net income in CECP segment decreased to $12.3 million from $16.8 million. The major reason was the drop in gross profit margin as mobile phone accessories with relatively lower margin accounted for a larger percentage of sales in 2006. Although selling, general and administrative expenses and research and development expenses were maintained at a lower level than in 2005 and interest income increased by $1.1 million which offset the decrease in dividend income of $0.6 million, overall net income still dropped by $4.5 million.

     In TCA segment, net income decreased to $31.4 million from $35.2 million. The major reason was competitive pricing pressures requiring us to lower unit prices. Although TCA segment experienced growth in business volume from existing customers for its FPC subassemblies and LCD modules, averaged gross margin still dropped from 8.2% to 7.2%. In line with the increase in business volume, operating expenses increased by about 16.4% in comparing with year 2005. As a result, net income decreased by $3.8 million.

     In LCDP segment, net income decreased to $2.6 million from $3.2 million. Owing to the market competition and increase in cost of sales, gross profit dropped by about $1.0 million. Even though selling, general and administrative expenses were controlled at a lower level than year 2005, net income still decreased by $0.6 million.

     Net loss in corporate segment represented by the losses arising from the judgment to reinstate redeemed shares of $14.5 million, partially offset by the $9.3 million gain on disposal of asset held for sale. Besides, interest income also increased by $3.4 million because of the rising interest rate environment from 2005 to 2006 and so the resulting net loss increased by $1.6 million.

Liquidity and Capital Resources

Liquidity

     We have financed our growth and cash needs to date primarily from internally generated funds, proceeds from the sale of our strategic investments, proceeds from the sale of land we owned in Hong Kong, sales of our common stock and bank borrowings. In 2006, as part of our reduction of business activities in Hong Kong, we sold our former administrative offices in Hong Kong for $20.2 million.

     We do not use off-balance sheet financing arrangements, such as securitization of receivables or obtaining access to assets through special purpose entities, as sources of liquidity. Our primary uses of cash have been to fund expansions and upgrades of our manufacturing facilities, to make strategic investments in potential customers and suppliers and to fund increases in inventory and accounts receivable resulting from increased sales.

     We had net working capital of $266.3 million at December 31, 2007 compared to net working capital of $238.1 million at December 31, 2006. We expect our working capital requirements and capital expenditures to increase in order to support future expansions of our operations through acquisition of lands, construction of new factories on these lands to be acquired and machinery purchases. It is possible that future expansions may be significant and may require the payment of cash. Future liquidity needs will also depend on fluctuations in levels of inventory and shipments, changes in customer order volumes and timing of expenditures for new equipment.

     We currently believe that during the next twelve months, our capital expenditures will be in the range of $80 million to $100 million, principally for an office building, machinery and equipment and new factory expansion in China. We believe that our level of resources, which include cash and cash equivalents, accounts receivable and available borrowings under our credit facilities, will be adequate to fund these capital expenditures and our working capital requirements for at least the next twelve months. Should we desire to consummate significant additional acquisition opportunities or undertake additional significant expansion activities, our capital needs would increase and could possibly result in our need to increase available borrowings under our revolving credit facilities or access public or private debt and equity markets. There can be no assurance, however, that we would be successful in raising additional debt or equity on terms that we would consider acceptable or at all.

     The following table sets forth, for the years ended December 31, 2005, 2006 and 2007, selected consolidated cash flow information (in thousands):

	Year Ended December 31,
	2005			2006			2007
Net cash provided by operating activities	$	70,825		$	79,811		$	71,050
Net cash provided by (used in) investing activities		18,740			(8,430	)		26,610
Net cash used in financing activities		(36,165	)		(65,071	)		(47,098	)
Net increase in cash and cash equivalents		53,400			6,310			50,562

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     Net cash provided by operating activities for 2007 was $71.1 million. This consisted primarily of $69.5 million of net income, adjusted for $21.5 million of depreciation and amortization, $22.3 million in minority interests and $43.8 million gain on disposal of marketable securities. Our working capital related to operating activities increased, mainly driven by a decreases in accounts receivable of $21.7 million and increase in other payables of $8.0 million, partially offset by a decrease of $18.6 million in accounts payable, an increase of $1.2 million in income taxes recoverable, an increase of $1.5 million in inventories and an increase of $3.3 million in prepaid expenses and other receivables.

     Net cash used in investing activities of $26.6 million for 2007 consisted primarily of proceeds from disposal of marketable securities of $53.9 million, proceeds from sales of subsidiaries’ shares of $7.3 million and proceeds from disposal of property, plant and equipment of $0.5 million, partially offset by capital expenditures of $13.8 million mainly consisting of purchases of machinery and equipment, which were used to expand our manufacturing capacity and to upgrade our equipment to produce increasingly complex products and our prepayment for the purchase price for land -use rights of $7.5 million. In addition, the Company utilized $13.8 million to acquire additional capital shares of NTEEP and JIC in 2007.

     Net cash used in financing activities of $47.1 million for 2007 resulted primarily from $47.8 million paid to shareholders as dividends, $2.0 million in repayment of bank loans, offset by proceeds of bank loans of $2.7 million.

     Net cash provided by operating activities for 2006 was $79.8 million. This consisted primarily of $40.8 million of net income, adjusted for $19.0 million of depreciation and amortization, $14.5 million provision of losses arising from the judgment to reinstate the redeemed shares, $9.3 million gain on disposal of asset held for sale, and $6.2 million in minority interests. Our working capital related to operating activities increased, driven by an increase of $4.3 million in accounts payable and a decrease in accounts receivable of $8.1 million and $0.9 million in inventories, partially offset by a decrease $3.1 million in accrued expenses and others payables, an increase of $1.6 million in income taxes recoverable, a decrease of $0.3 million in notes payable and an increase of $1.0 million in prepaid expenses and other receivables.

     Net cash used in investing activities of $8.4 million for 2006 consisted primarily of proceeds from disposal of assets held for sale of $20.2 million and proceeds from disposal of property, plant and equipment of $420,000 partially offset by capital expenditures of $23.8 million. Besides, the Company also utilized $3.1 million to acquire additional shares in NTEEP and JIC. Capital expenditure in 2006 mainly consisted of purchases of machinery and equipment, which were used to expand our manufacturing capacity and to upgrade our equipment to produce increasingly complex products.

     Net cash used in financing activities of $65.1 million for 2006 resulted primarily from $65.9 million paid to shareholders as dividends, $8.1 million in repayment of bank loans, partially offset by proceeds of bank loans of $3.5 million and proceeds from shares issued on exercise of options of $5.4 million.

     For the years ended December 31, 2006 and 2007, the Company has guaranteed loans and credit facilities of various of its subsidiaries in amounts aggregating up to $15.0 million and nil, respectively. The terms of the guarantees correspond with the terms of the underlying loan and credit facility agreements.

     We had no material transactions, arrangements or relationships with unconsolidated affiliated entities that are reasonably likely to affect our liquidity.

Privy Council Judgment/Bank of China Litigation

     For a number of years, we have been involved in litigation against Tele-Art, its initial liquidator and the Bank of China concerning, among things, the priority of claims against Tele-Art’s insolvent estate and Nam Tai’s rights to have redeemed in 1999 and 2002 an aggregate of 1,017,149 (giving effect to our three-for-one stock split and one-for-ten stock dividend that we effected in 2003) of the common shares of Nam Tai beneficially held by Tele-Art Inc. in order to satisfy a portion of Nam Tai’s claims against Tele-Art. After several decisions by the courts of the British Virgin Islands and appeals in these proceedings, judgment was rendered on November 20, 2006 by the Lords of the Judicial Committee of the Privy Council of the United Kingdom, which required us to reinstate the 1,017,149 Nam Tai shares that we had previously redeemed from Tele-Art and deliver them to Bank of China on account of its secured claim against Tele-Art. For the year ended December 31, 2006, we accounted for the reinstatement of the shares at their fair value, i.e. the market closing price on November 20, 2006, the date of the Judgment.

     We have been advised that Bank of China sold 539,830 of the reinstated shares in early September 2007 and applied the proceeds to the secured debt that Bank of China claimed was due to it from Tele-Art. The proceeds from the sale retained by Bank of China included the amount it asserted to satisfy the obligation it claimed from

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Tele-Art through the date of sale, plus a reserve of approximately $900,000 for legal costs and expenses that Bank of China has claimed for related litigation. We have been advised by our legal advisers that such retention is wrongful. We intend to issue legal proceedings against the Bank of China for such wrongful retntion and for an account of the sale proceeds retained by it is purported satisfactionj of the debts due to it. Bank of China delivered to Tele-Art’s liquidator the 477,319 shares remaining from the reinstated shares it sold. Investigations on behalf of the liquidator seeking to locate and recover additional Tele-Art assets for its estate in liquidation are ongoing. The liquidator has authorized us to utilize the cash dividends attributable to the reinstated shares for the benefit of the estate of Tele-Art (in Liquidation). We have deposited such cash dividends and will deposit proceeds realized from the sale of the remaining reinstated shares and any other assets of Tele-Art’s estate that are discovered into a segregated bank account, from which all future legal costs and other expenses relating to the liquidation of Tele-Art will be paid until its liquidation proceedings are concluded.

Capital Resources

     As of December 31, 2007, we had $272.5 million in cash and cash equivalents, consisting of cash and short-term deposits, compared to $221.1 million as of December 31, 2006. The Company has no short-term bank loans as of December 31, 2007 and December 31, 2006. Our long-term bank borrowing was $3.5 million and $2.9 million as of December 31, 2007 and December 31, 2006 respectively.

     As of December 31, 2007, we had in place general banking facilities with three financial institutions aggregating $35.2 million. The maturity of these facilities is generally up to 120 days. These banking facilities are guaranteed by one of our subsidiaries listed in Hong Kong Stock Exchange and there is an undertaking not to pledge any assets to any other banks without the prior consent of our bankers. However, these covenants do not have any impact on our ability to undertake additional debt or equity financing. Interest rates are generally based on the banks’ reference lending rates. Our facilities permit us to obtain letters of credit, import facilities, trust receipt financing and shipping guarantees. No significant commitment fees are required to be paid for the banking facilities. These facilities are subject to annual review and approval. As of December 31, 2007, we had utilized approximately $4.6 million under such general credit facilities and had available unused credit facilities of $30.6 million.

     During 2007, we had one four-year term loan and another three-year term loan. The total outstanding balance amounted to $3.5 million as of December 31, 2007 and $2.9 million as of December 31, 2006. An analysis of the term loans are as follows:

										Outstanding		Outstanding
										balance at		balance at
		Original				Amount per				December		December
	Date of	drawn		No. of		installments			First	31,2006		31, 2007
	draw down	(in million)		installments		(in millions)		Interest rate	repayment	(in millions)		(in millions)
Term Loan 1	Jul-07	$	1.1		12	$	0.1	0.55% over LIBOR	Oct-07	$	—	$	1.0
	Aug-07	$	0.5		12	$	0.1	0.55% over LIBOR	Nov-07	$	—	$	0.5
	Sep-07	$	1.1		12	$	0.1	0.55% over LIBOR	Dec-07	$	—	$	1.0
Term Loan 2	Apr-04	$	1.6		16	$	0.1	0.75% over LIBOR	Jul-04	$	0.6		$0.2
	Jun-04	$	3.6		16	$	0.2	0.75% over LIBOR	Sep-04	$	1.4		$0.4
	Dec-04	$	1.8		16	$	0.1	0.75% over LIBOR	Mar-05	$	0.9		$0.4
Total										$	2.9	$	3.5

     Our contractual obligations, including long-term debt arrangements, capital expenditure, purchase obligations and future minimum lease payments under non-cancelable operating lease arrangements as of December 31, 2007 are summarized below. We do not participate in, or secure financing for, any unconsolidated limited purpose entities. Non-cancelable purchase commitments do not typically extend beyond the normal lead-time of several weeks at most. Purchase orders beyond this time frame are typically cancelable.

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	Payments (in thousands) due by period
													2012 and
Contractual Obligation	Total		2008		2009		2010		2011		2012		thereafter
Long-term bank borrowing	$	3,548	$	1,990	$	890	$	668	$	—	$	—	$	—
Operating leases		6,837		1,789		1,449		1,428		1,532		639		—
Capital expenditures		3,116		3,116		—		—		—		—		—
Purchase obligations		97,085		97,085		—		—		—		—		—
Total	$	110,586	$	103,890	$	2,339	$	2,096	$	1,532	$	639	$	—

There are no material restrictions (including foreign exchange controls) on the ability of our non-China subsidiaries to transfer funds to us in the form of cash dividends, loans, advances or product or material purchases. With respect to our PRC subsidiaries, with the exception of a requirement that about 11% of profits be reserved for future developments and staff welfare, there are no restrictions on the payment of dividends and the removal of dividends from China once all taxes are paid and assessed and losses, if any, from previous years have been made good. For 2007 or before, if dividends were paid by our PRC subsidiaries, such dividends would reduce the amount of reinvested profits and, accordingly, the refund of taxes paid would be reduced to the extent of tax applicable to profits not reinvested. However, In March 2007, PRC National People’s Congress promulgated the new Enterprise Income Tax Law which replaces the current foreign enterprise income tax law and takes effect from January 1, 2008. Profit reinvestment benefit, which we previously enjoyed, was also abolished with efect from January 1, 2008. However, we believe there is no material impact to the capital resource of the Company to provide working capital for growth and captial expenditure for coming future.

Impact of Inflation

     Inflation and deflation in China, Hong Kong and Macao has not had a material effect on our past business. During times of inflation, we have generally been able to increase the price of its products in order to keep pace with inflation.

Exchange Controls

     There are no exchange control restrictions on payments of dividends, interest, or other payments to nonresident holders of our securities or on the conduct of our operations in Hong Kong, Macao and Cayman Islands, where the offices of some of our subsidiaries are located, or in the British Virgin Islands, where we are incorporated. Other jurisdictions in which we conduct operations may have various exchange controls. With respect to our PRC subsidiaries, with the exception of a requirement that about 11% of profits be reserved for future developments and staff welfare, there are no restrictions on the payment of dividends and the removal of dividends from China once all taxes are paid and assessed and losses, if any, from previous years have been made good. We believe such restrictions will not have a material effect on our liquidity or cash flows.

Recent Changes in Accounting Standards

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, "Fair Value Measurement”. SFAS No. 157 addresses standardizing the measurement of fair value for companies who are required to use a fair value measure for recognition or disclosure purposes. The FASB defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is evaluating the impact, if any, of the adoption of SFAS No. 157. It is not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Options for Financial Assets and Financial Liabilities". SFAS No. 159 permits an entity, on a contract-by-contract basis, to make an irrevocable election to account for certain types of financial instruments and warranty and insurance contracts at fair value, rather than historical cost, with changes in the fair value, whether realized or unrealized, recognized in earnings. SFAS No. 159 is effective for financial year beginning on or after November 15, 2007. The Company is evaluating the impact, if any, of the adoption of SFAS No. 159. It is not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

     In June 2007, the Emerging Issues Task Force (“EITF”) of FASB ratified EITF Issue 06-11 "Accounting for the Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF 06-11”). EITF 06-11 provides that tax benefits associated with dividends on share-based payment awards be recorded as a component of additional paid-in capital. EITF 06-11 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007. The Company is currently assessing the impact of EITF 06-11 on its consolidated financial position and results of operations.

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     In 2007, the EITF of FASB issued EITF Issue 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (“EITF 07-3”). EITF reached a consensus that nonrefundable advance payments to acquire goods or pay for services that will be consumed or performed in a future period in conducting research and development activities on behalf of the entity should be recorded as an asset when the advance payments are made. Capitalized amounts should be recognized as expense when the related goods are delivered or services are performed, that is, when the goods without alternative future use are acquired or the service is rendered. EITF 07-3 is effective for fiscal years beginning after December 15, 2007. The Company is evaluating the impact, if any, of the adoption of EITF 07-3. It is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

     In December 2007, FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141R”). The objective of SFAS No. 141R is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. SFAS No. 141R is effective for financial statements issued for fiscal years beginning on or after December 15, 2008. The Company is evaluating the impact, if any, of the adoption of SFAS No. 141R. It is not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in Consolidated Financial Statements”. SFAS No. 160 amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements”, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 defines “a noncontrolling interest, sometimes called a minority interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent”. The objective of SFAS No. 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is evaluating the impact, if any, of the adoption of SFAS No. 160.

Research and Development

     Our research and development expenditure mainly comprised of salaries and benefits paid to our research and development personnel and is mainly for the development of advanced manufacturing techniques to produce complex products on a mass scale and at a low cost. We expense our research and development costs as incurred. For the years ended December 31, 2005, 2006 and 2007, we incurred research and development expenses of approximately $7.2 million, $7.9 million and $9.8 million respectively.

Trend Information

     Currently, our operations consist of three reportable segments, Consumer Electronics and Communication Products, or CEP, Telecommunication Components Assembly, or TCA, and LCD Products, or LCDP.

     We plan to continue to leverage on our solid long-term customer relationships, industry and manufacturing expertise to expand our business.

     For Consumer Electronics and Communication Products, we will continue to focus on CMOS sensor optical devices, educational products, cellular phone accessories and entertainment devices. Since June 2003, we have been able to diversify our product range from finished products to component assemblies and began manufacturing the high growth CMOS sensor modules for integration into various image-capturing devices such as cellular phones with built-in camera functions, and notebook computers popularized with Skype and such applications, as well as recently for the automotive industry. In 2007, we continued developing finished products, such as headset accessories containing Bluetooth wireless technology, and also new entertainment and educational products. In addition to our core manufacturing business for consumer electronic and communication products, we are also exploring GPS and Wi-Fi technology to expand our customer base for future growth.

     For Telecommunication Component Assembly, we will continue to focus on high-growth products that require advance technological production know-how. In addition to high-end color LCD modules, we began manufacturing FPC subassemblies in March 2003 for integration into various LCD modules and other products, like infotainment consumer electronic products which played a significant role in increasing our total turnover in the past two years. In 2006, we further increased our product line and broadened our customer base by producing DAB modules for a new European customer and PCBAs for headsets containing Bluetooth wireless technology. In order to enhance our vertical integration by moving upstream to increase profitability and support our fast-growing FPC subassembly business, we began FPC boards manufacturing in 2007. We believe that the combination of FPC boards manufacturing and FPC subassembly capability will allow us to better serve our customers and give us synergy benefits by improving our gross profit margins and broaden our product and service offering.

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     From time to time, our customers have experienced significant decreases in demand for their products and services. This volatility has resulted, and may result in the future, in our customers delaying purchases of the products we manufacture for them and our customers placing purchase orders for lower volumes of products than previously anticipated. For example, during 2007 one of our indirect customers, engaged in the manufacture and sale of mobile phones and other mobile devices, suffered a substantial drop in sales volume in its mobile devices business in Asia and Europe which, in turn, adversely affected sales in our telecommunication components assembly products segment, resulting in our 2007 net sales from that segment decreasing by over $214 million, or 34.1%, from comparable 2006 net sales. To date, we have seen no signs that the decreases in demand in the mobile phone market is reversing and we accordingly expect, at least in the near term during 2008, that sales in our TCA segment will continue the trend evidenced in 2007, will decline from levels we experienced in 2006 and may decrease from TCA product sales levels we reported in 2007.

     LCD panels are found in numerous applications in electronics products, such as watches, clocks, calculators, pocket games, PDAs and mobile and cordless telephones and car audio systems. We are a customized LCD panel manufacturer, and we develop each product from design concept all the way to a high quality mass producible product. Since 2003, we have also begun manufacturing customized LCD modules that included components such as backlights, FPC and COG. In 2005, we began developing LCD modules for cordless and VoIP phones. We intend to continue expanding our customized passive LCD module products utilizing LCD panels that we have manufactured, and we expect this strategy to provide us with higher value products, a wider customer base, higher revenues and margins.

     It has been our strategy to continue diversifying our customer and product basis to higher value and better margin business. We will also kept on enhancing our vertical integration by moving upstream to develop and manufacture FPC boards to increase profitability and support our FPC subassembly business We believe that the growth of this business will be sufficient to offset the impact of lower gross profit margins and global trend of dropping in unit price which can continue to achieve overall growth in our profits.

Off-balance Sheet Arrangement

     For 2007, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 6. DIRECTORS AND SENIOR MANAGEMENT

Directors and Senior Managers

     Our current directors and senior management, and their ages as of February 29, 2008, are as follows:

Name	Age		Position with Nam Tai or its Subsidiaries
M. K. Koo		63	Chairman of the Board of Nam Tai, NTEEP Group
Masaaki Yasukawa		48	Chief Executive Officer of Nam Tai and NTEEP Group
John Q. Farina		54	President and Chief Financial Officer of Nam Tai and Chief Financial Officer of NTEEP Group
L. P. Wang		51	Chief Operating Officer of Nam Tai and NTEEP Group
Karene Wong		44	Chief Executive Officer of NTEEP Business Unit
Patinda Lei		41	Chief Executive Officer of Zastron Business Unit
Ivan Chui		49	Chief Executive Officer of Jetup Business Unit
Peter R. Kellogg		65	Member of the Board of Directors
Dr. Wing Yan (William) Lo		47	Member of the Board of Directors
Charles Chu		51	Member of the Board of Directors
Mark Waslen		47	Member of the Board of Directors

     M.K. Koo. Mr. Koo has served as Chairman of the Board of Nam Tai and its predecessor companies from inception until September 1998. He then became our Senior Executive Officer, responsible for corporate strategy, finance and administration and served as the Company’s Chief Financial Officer. Mr. Koo resigned from the position of Chief Financial Officer on January 1, 2005 but maintained his role as a non-executive director of the Company. In July 2005, Mr. Koo reassumed the position as Chairman upon the resignation of Mr. Tadao Murakami but maintained his non-executive status. On June 1, 2007 Mr. Koo also assumed the position of acting Chief Executive Officer upon the resignation, effective May 31, 2007, of Warren Lee, who resigned to accept the position of Chief Executive of Yu Ming Investments Limited. Mr. Koo served as Nam Tai’s CEO until Masaaki Yasukawa joined Nam Tai as CEO effective on February 1, 2008. Mr. Koo, who continues to serve Nam Tai as its Chairman of the Board, received his Bachelor’s of Laws degree from National Taiwan University in 1970. With effect from February 2, 2007, Mr. Koo was also appointed as non-executive Chairman of NTEEP Group.

     Masaaki Yasukawa. Mr. Yasukawa joined Nam Tai group in February 2008 as its Chief Executive Officer of Nam Tai and NTEEP Group. Mr. Yasukawa started his career as a Corporate R&D engineer of Seiko

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Epson Corporation in Japan in 1983. In 1985 Mr. Yasukawa was appointed to Epson America Inc. (EAI) as an engineering support manager. After he returned to Seiko Epson R&D department, Mr. Yasukawa was appointed as a Manager and later the General Manager of New Business Development department and initiated various programs of cross-divisional, multi-functional new business development. In 2003, he was appointed as the General Manager of the Business Solution Business Unit at Epson Hong Kong, starting solution-based corporate businesses targeting Hong Kong, PRC and other Asian corporate customers. One of his solution products was honored with South East Asia’s IT Award in 2003. Mr. Yasukawa has established business relationships with major corporate customers, including Mass Transit Railway, Hong Kong and Shanghai Banking Corporation, Bank of China, Town Gas in Hong Kong, and Oriental Plaza in the PRC. Mr. Yasukawa graduated from University of Tokyo, in Tokyo Japan in 1983, with a Bachelor Degree in Mechanical Engineering, and later obtained Master Degree with distinction in Business Administration from University of Michigan, Ann Arbor in 1993. Mr. Yasukawa has been selected as the only Japanese member of Hong Kong Computer Society (HKCS), and is an Asian Liaison of International Affairs Committee.

     John Q. Farina. Mr. Farina joined Nam Tai in May 2007 as its Chief Financial Officer and redesignated as President and Chief Financial Officer on February 1, 2008. With effect from February 2, 2007, he was also appointed as Chief Financial Officer of the NTEEP Group. Mr. Farina along with his strong foundation in financial management, brings over 20 years experience in high technology companies. He has over 10 years experience with Celestica Inc., a top tier electronics manufacturing services company. Mr. Farina was part of Celestica Inc’s founding management team and has held General Manager, Corporate Development and Financial Executive positions. Mr. Farina also worked for 13 years with IBM Corporation in Canada and the United States where he gained extensive experience in financial management culminating in the role Divisional Chief Financial Officer. Mr. Farina graduated from the University of Toronto with a bachelor degree in applied science in 1975. He also holds a Master Degree in Business Administration that he received in 1981 from the York University Schulich School of Business in Toronto.

     L.P. Wang. Mr. Wang was appointed to the position of Chief Operating Officer of Nam Tai. in December 2006 and in the position he oversee the production operation of Nam Tai. Mr. Wang has more than 23 years of experience in the electronics industry. He joined Nam Tai in 1997 as production engineering manager and was promoted to vice managing director in 2002. He was later promoted to Managing Director of Zastron Electronics (Shenzhen) Co. Ltd. in August of the same year. Mr. Wang left Nam Tai in February 2004 but re-joined in December 2006 as its Chief Operating Officer. Prior to joining Nam Tai in 1997, Mr. Wang held several management positions in various companies in Taiwan and Malaysia. Mr. Wang graduated from Chinese Military Academy in Taiwan.

     Karene Wong. Ms. Wong joined Nam Tai in June 1989. On January 1, 2001, Ms. Wong was promoted to Managing Director of Nam Tai Trading Company Limited, formerly known as Nam Tai Electronic & Electrical Products Limited. (Hong Kong), a Nam Tai subsidiary, and later held the position of Chairman of NTEEP from June 2003 until September 30, 2006, at which time she became Vice Chairman of NTEEP group. In November 2006, her title was changed to the Chief Executive Officer of NTEEP group. After the 2007 Reorganization , she was redesignated as Chief Executive Officer of NTEEP business unit She is responsible for overseeing the overall business of NTEEP business unit, a position in which she continues to maintain close contact with key customers and cultivates new customer relationships.

     Patinda Lei. Ms. Lei joined Nam Tai group in May 1990. In June 2002, she assumed the position of Managing Director of our subsidiary Nam Tai Telecom (Hong Kong) Company Limited and in March 2004, became the Chairman of the Board of Zastron. In early 2007, she was redesignated as Chief Executive Officer of Zastorn group. After the 2007 Reorganization, her title was changed to Chief Executive Officer of the Zastron business unit, where she continues to maintain close contact with key customers and to cultivate new customer relationships.. Ms. Lei has worked with various of the Nam Tai group companies for seventeen years specializing in promoting, generating and monitoring sales revenues on various high-end electronics products. During the period from January 10, 2006, Ms. Lei served Nam Tai as acting as announced on January 10, 2006, Ms. Patinda Lei agreed to act as Nam Tai’s CEO and CFO, remaining in those positions until November 30, 2006 and April 30, 2007, respectively. Ms. Lei graduated with a Bachelor of Sciences degree in Management Science from the Faculty of Engineering of Tokyo University of Science in Japan and holds a Master Degree in Business Administration from The Chinese University of Hong Kong.

     Ivan Chui. Mr. Chui is the co-founder of Nam Tai’s subsidiary, Jetup. Before the 2007 Reorganization , he served as Chairman of the Board of Nam Tai’s subsidiary, JIC Technology Company Limited, the holding Company of our JIC group. JIC after the 2007 reorganization, he appointed as Chief Executive Officer of Jetup business unit, which as the result of the 2007 Reorganization became part of our NTEEP group. Mr. Chui has directed Jetup’s marketing activities since its founding in 1980. He has over 20 years of experience in the LCD business and has extensive experience in doing business with Japanese companies.

     Peter R. Kellogg. Mr. Kellogg has served on our Board of Directors since June 2000. Mr. Kellogg was a Senior Managing Director of Spear, Leeds & Kellogg, a registered broker-dealer in the United States and a

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specialist firm on the NYSE until the firm merged with Goldman Sachs in 2000. Mr. Kellogg serves on our Compensation Committee and Nominating / Corporate Governance Committee. Mr. Kellogg is also a member of the Board of the Ziegler Companies and the U.S. Ski Team.

     Dr. Wing Yan (William) Lo. Dr. Lo was elected to our Board of Directors at our annual meeting of shareholders on July 8, 2003. Dr. Lo is currently the Vice Chairman and Managing Director of I.T Limited, a well established trend setter in fashion apparel retail market in Hong Kong with stores in the PRC, Taiwan and Malaysia, which is listed on the Main Board of the Hong Kong Stock Exchange. From 2002 to 2006, Dr. Lo was the Executive Director and Vice President of China Unicom Ltd., a telecommunications operator in China that is listed on both the Hong Kong and New York Stock Exchanges. From 1998 to 1999, Dr. Lo was the chief executive officer of Citibank’s Global Consumer Banking business for Hong Kong. Prior to joining Citibank, Dr. Lo was the founding Managing Director of Hongkong Telecom IMS Ltd. Dr. Lo holds an M. Phil. degree and a Ph.D. degree from Cambridge University, England. He is also an Adjunct Professor of The School of Business, Hong Kong Baptist University as well as the Faculty of Business, Hong Kong Polytechnic University. In 1998, Dr. Lo was appointed as a Justice of the Peace of Hong Kong. In 2003, he was appointed as Committee Member of Shantou People’s Political Consultative Conference. Dr. Lo currently serves on the Nominating / Corporate Governance Committee acting as the Chairman and also serves on our Audit Committee and Compensation Committee.

     Charles Chu. Mr. Chu has served on our Board of Directors from November 1987 to September 1989 and since November1992. Since July 1988, Mr. Chu has been engaged in the private practice of law in Hong Kong. Mr. Chu serves as Chairman of our Compensation Committee, and on our Audit Committee and Nominating / Corporate Governance Committee. Mr. Chu received his Bachelor’s of Laws degree and Post-Graduate Certificate of Law from the University of Hong Kong in 1980 and 1981, respectively.

     Mark Waslen. Mr. Waslen has served on our Board of Directors since July 2003 and serves as Chairman of our Audit Committee and on our Compensation Committee and Nominating / Corporate Governance Committee. From 1990 to 1995 and from June 1998 to October 1999, Mr. Waslen was employed by Nam Tai in various capacities, including Financial Controller, Secretary and Treasurer. Since 2001, Mr. Waslen has been employed by Berris Mangan Chartered Accountants, an accounting firm located in Vancouver, BC. In addition to Berris Mangan, Mr. Waslen has been employed with various other accounting firms, including Peat Marwick Thorne and Deloitte & Touche. Mr. Waslen is a CFA, CA and a CPA and received a Bachelor’s of Commerce (Accounting Major) from University of Saskatchewan in 1982.

     No family relationship exists among any of our directors or members of our senior management and no arrangement or understanding exists between any of our major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or member of senior management. Directors are elected each year at our annual meeting of shareholders or serve until their respective successors take office or until their death, resignation or removal. Members of senior management serve at the pleasure of the Board of Directors.

Compensation of Directors and Senior Management

     The aggregate compensation, including benefits in kind (excluding stock options) granted, during the year ended December 31, 2007 that we or any of our subsidiaries paid to all directors and senior management as a group for their services in all capacities to the Company or any subsidiary was approximately $3.3 million.

     During the year ended December 31, 2007, we granted to our directors from our stock option plans options to purchase an aggregate of 75,000 of our common shares at exercise price of $12.42 per share. During the year ended December 31, 2007, we also granted to our senior management from our stock option plans options to purchase an aggregate of 40,000 of our common shares at exercise price of $12.13. The exercise prices of the shares covered by the options granted during 2007 were all equal to their fair market value of our shares on the date of grant and the options granted expire on the anniversary of their grant date in 2010 with respect to options granted to directors and 2011 with respect to options granted to senior management.

     We pay our directors who are not employees of Nam Tai or any of its subsidiaries $3,000 per month for services as a director, $750 per meeting attended in person and $500 per meeting attended by telephone. In addition, we reimburse our directors for all reasonable expenses incurred in connection with their services as a director and member of a board committee.

     Members of our senior management are eligible for annual cash bonuses based on their performance and that of the subsidiaries in which they are assigned for the relevant period. Senior management are entitled to share up to 15% of the operating income from the subsidiary in which they are employed during the year. Our senior management in charge of our subsidiaries recommend the participating staff members from the corresponding subsidiary and the amount, if any, to be allocated from such subsidiary’s profit pool to an eligible employee. In addition to cash incentives, members of our senior management are eligible to receive stock options from our Stock Option Plans.

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     According to the applicable laws and regulations in China set by the local government of Shenzhen, China, prior to July 2006, we are required to contribute 8% to 9% of the stipulated salary to our staff located there to retirement benefit schemes to fund retirement benefits for our employees. With effect from July 2006, the applicable percentages were adjusted to 10% to 11%. Our principal obligation with respect to these retirement benefit schemes is to make the required contributions under the scheme. No forfeited contributions may be used by us to reduce the existing level of contributions.

     Since December 2000, we have enrolled all of our eligible employees located in Hong Kong into the Mandatory Provident Fund, or MPF, scheme, a formal system of retirement protection that is mandated by the government of Hong Kong and provides the framework for the establishment of a system of privately managed, employment-related MPF schemes to accrue financial benefits for members of the Hong Kong workforce when they retire. Since first establishing a subsidiary in Macao in 2003, we have enrolled all of our eligible employees in Macao into Macao’s retirement benefit scheme, or RBS. Both the MPF and RBS are available to all employees aged 18 to 64 and with at least 60days of service under the employment of Nam Tai in Hong Kong and Macao. Contributions are made by us at 5% based on the staff’s relevant income. The maximum relevant income for contribution purpose per employee is $3,000 per month. Staff members are entitled to 100% of the Company’s contributions, together with accrued returns, irrespective of their length of service with us, but the benefits are required by law to be preserved until the retirement age of 65 for employees in Hong Kong while the benefit can be withdrawn by the employees in Macao at the end of employment contracts.

     The cost of our contributions to the staff retirement plans in Hong Kong, Macao and China amounted to $1,510,000, $1,534,000 and $1,800,000 for the years ended December 31, 2005, 2006 and 2007, respectively.

Board Practices

     All directors hold office until our next annual meeting of shareholders, which generally is in the summer of each calendar year, or until their respective successors are duly elected and qualified or their positions are earlier vacated by resignation or otherwise. The full board committee appoints members and chairman of board committees, who serve at the pleasure of the Board. Nam Tai has no director service contracts providing for benefits upon termination of service as a director or employee (if employed). Annually, upon election to our Board at each Annual Meeting of Shareholders, we grant to non-employee directors so elected options from one of our stock option plans to purchase 15,000 common shares. These options are exercisable at the fair market value of our shares on the date of grant and are exercisable for three years from the date of grant, subject to sooner termination based on the provisions of the applicable stock option plan.

Corporate Governance Guidelines

     We have adopted a set of corporate governance guidelines which are available on our website at http://www.namtai.com/ corpgov/corpgov.htm. The contents of this website address, other than the corporate governance guidelines, the code of ethics and committee charters, are not a part of this Form 20-F. Stockholders also may request a free copy of our corporate governance guidelines in print form by a making a request therefor to:

John Farina, President and Chief Financial Officer
Eve Leung, Corporate Secretary
Unit C, 17/F, Edificio Comercial Rodrigues
599 da Avenida da Praia Grande
Macao

Telephone: (853) 2835 6333
Facsimile: (853) 2835 6262
e-mail: shareholder@namtai.com

NYSE Listed Company Manual Disclosure

     As a foreign private issuer with shares listed on the NYSE, the Company is required by Section 303A.11 of the Listed Company Manual of the NYSE to disclose any significant ways in which its corporate governance practices differ from those followed by U.S. domestic companies under NYSE listing standards. Management believes that there are no significant ways in which Nam Tai’s corporate governance standards differ from those followed by U.S. domestic companies under NYSE listing standards.

Committee Charters and Independence

     The charters for our Audit Committee, Compensation Committee and Nominating / Corporate Governance Committee are available on our website at . The contents of this website address, other than the corporate governance guidelines, the code of ethics and committee charters, are not a part of this Report. Stockholders may request a copy of each of these charters from the address and phone number set forth above under “Corporate Governance Guideline”.

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     Each of the members of our Board of Directors serving on our Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee, and the majority of the members of our Board of Directors as a whole, are “independent” as that term is defined in Corporate Governance Rules of the NYSE.

Board Committees

Audit Committee

     The primary duties of Nam Tai’s Audit Committee are reviewing, acting on and reporting to the Board of Directors with respect to various auditing and accounting matters, including the selection of independent registered public accounting firm, the scope of annual audits, the fees to be paid to the independent registered public accounting firm and the performance of the independent registered public accounting firm and accounting practices.

     Our Audit Committee consists of three independent non-executive directors Messrs. Waslen and Chu and Dr. Lo. Mr. Waslen serves as the Chairman of the Audit Committee.

Compensation Committee

     The primary duties of Nam Tai’s Compensation Committee are to recommend (i) the compensation of the Company’s Board of Directors; (ii) compensation of any directors who are executives of the company and the chief executive officer with reference to achievement of corporate goals and objectives established in the previous year; (iii) compensation of other senior management if required by the Board; and (iv) equity based and incentive compensation programs of the Company.

     Our Compensation Committee consists of four independent non-executive directors, Messrs. Chu, Lo, Waslen and Kellogg. Mr. Chu serves as the Chairman of the Compensation Committee.

Nominating / Corporate Governance Committee

     The primary duties of Nam Tai’s Nominating / Corporate Governance Committee consist of (i) assisting the Board by actively identifying individuals qualified to become Board members consistent with criteria approved by the Board; (ii) recommending to the Board the director nominees for election at the next annual meeting of stockholders, the member nominees for the Audit Committee, Compensation Committee and the Nominating / Corporate Governance Committee on an annual basis; (iii) reviewing and recommending to the Board whether it is appropriate for such director to continue to be a member of the Board in the event that there is a significant change in the circumstance of any director that would be considered detrimental to the Company’s business or his/her ability to serve as a director or his/her independence; (iv) reviewing the composition of the Board on an annual basis; (v) recommending to the Board a succession plan for the chief executive officer and directors, if necessary; (vi) monitoring significant developments in the law and practice of corporate governance and of the duties and responsibilities of directors of public companies; (vii) establishing criteria to be used in connection with the annual self-evaluation of the Nominating / Corporate Governance Committee; and (viii) developing and recommending to the Board and administering the corporate governance guidelines of the Company.

     Our Nominating / Corporate Governance Committee consists of four independent non-executive directors, Messrs. Lo, Chu, Waslen and Kellogg. Dr. Lo serves as the Chairman of the Nominating / Corporate Governance Committee.

Stock Options of Directors and Senior Management

     The following table provides information concerning the options owned by our current Directors and Senior Management as of Feb 29, 2008.

	Number of
	common shares		Exercise
	subject		price		Expiration
Name	to options		per share($)		Date
M.K. Koo		15,000		22.25	June 8, 2009
		15,000		12.42	June 7, 2010
John Quinto Farina		40,000		12.13	May 13, 2011
		50,000		9.856	Feb. 5, 2011
Masaaki Yasukawa		—		—		—
L.P. Wang		—		—		—
Karene Wong		—		—		—
Patinda Lei		—		—		—
Ivan Chui		—		—		—
Peter R. Kellogg		15,000		21.62	June 6, 2008
		15,000		22.25	June 8, 2009

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	Number of
	common shares		Exercise
	subject		price		Expiration
Name	to options		per share($)		Date
		15,000		12.42	June 7, 2010
Wing Yan (William) Lo		15,000		21.62	June 6, 2008
		15,000		22.25	June 8, 2009
Charles Chu		15,000		12.42	June 7, 2010
		15,000		21.62	June 6, 2008
		15,000		22.25	June 8, 2009
Mark Waslen		15,000		12.42	June 7, 2010
		15,000		21.62	June 6, 2008
		15,000		22.25	June 8, 2009

Employee Stock Option Plans

     Nam Tai has two stock option plans, its amended 2001 stock option plan and its 2006 stock option plan. The 2006 stock option plan was approved by the Board on February 10, 2006 and approved by shareholders at our 2006 Annual Meeting of Shareholders.

     Under either the amended 2001 stock option plan or the 2006 New Plan, the terms and conditions of individual grants may vary subject to the following: (i) the exercise price of incentive stock options may not normally be less than market value on the date of grant; (ii) the term of incentive stock options may not exceed ten years from the date of grant; (iii) the exercise price of an option cannot be altered once granted unless such action is approved by shareholders in a general meeting or results from adjustments to the Company’s share capital and necessary to preserve the intrinsic value of the granted options; and (iv) every non-employee director automatically receives on an annual basis upon their election to the Board of Director at the annual shareholders’ meeting, options to purchase 15,000 common shares at an exercise price equal to 100% of the fair market value of the common shares on the date of grant.

     At February 29, 2008, we had options outstanding to purchase 345,000 shares under our stock option plans and options to purchase 2,529,869 shares were available for future grant under them.

     The full text of our amended 2001 stock option plan, amended on July 30, 2004, was filed with the Securities and Exchange Commission as Exhibit 4.18 to our Annual Report on Form 20-F for the year ended December 31, 2004. The full text of our 2006 stock option plan was included as Exhibit 99.1 to our Form 6-K furnished to the Securities and Exchange Commission on June 12, 2006. Amendments to our stock options were included with our Forms 6-K furnished to the Securities and Exchange Commission on November 13, 2006.

Employees

     The following table provides information concerning the number of Nam Tai’s employees, their geographic location and their main category of activity during the years ended December 31, 2005, 2006 and 2007.

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		As at December 31,
Geographic Location	Main Category of Activity	2005		2006		2007
Shenzhen, PRC	Manufacturing		4,800		5,630		6,220
	Research and development		342		316		360
	Quality control		471		439		558
	Engineering		281		305		337
	Administration		407		417		445
	Marketing		75		89		101
	Support*		258		246		298
Total Shenzhen			6,634		7,442		8,319
Hong Kong	Administration		14		10		13
	Marketing		—		—		—
	Support*		—		—		—
Total Hong Kong			14		10		13
Macao	Administration		12		16		13
	Marketing		—		—		—
	Support*		—		—		—
Total Macao			12		16		13
Japan	Administration		1		2		1
	Marketing		1		1		2
	Research & Development		—		1		1
	Support*		—		—		—
Total Japan			2		4		4
British Virgin Islands**	Administration		1		1		—
Total British Virgin Islands			1		1		0
Grand Total			6,663		7,473		8,349

*	Employees categorized in “support” include personnel engaged in procurement, customs, shipping and warehouse services.
**	We closed our BVI office on January 1, 2007.

     Three of our subsidiaries in China have entered into collective agreements with their respective trade unions. The collective agreements usually set out the minimum standard for the wages, working hours and other benefits of the workers. The current collective agreements between our subsidiaries and its trade union will expire on December 31, 2008 and we expect that it will be renewed on an annual basis thereafter.

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Shares and Options Ownership of Directors, Senior Management and Principal Shareholders

     The following table sets forth certain information known to us regarding the beneficial ownership of our common shares as of February 29, 2008, by each person (or group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) known by us to own beneficially 5% or more of our common shares; and each of our current directors and senior management.

	Shares beneficially owned(1)
Name	Number					Percent
Peter R. Kellogg		5,841,180	(3)	(2	)		13.0
M. K. Koo		5,705,786		(3	)		12.8
I.A.T. Reinsurance Syndicate Ltd.		5,224,800	(3)	(2	)		11.7
PowerShares Capital Management LLC and its parent Invesco Ltd.		3,182,715		(4	)		7.1
Ivan Chui		545,870					1.2
Masaaki Yasukawa		—					—
John Quinto Farina		90,000		(5	)		*
L. P. Wang		1,516		(6	)		*
Kazuhiro Asano		—					—
Karene Wong		37,100					*
Patinda Lei		26,400					*
Charles Chu		47,500		(7	)		*
Wing Yan (William) Lo		45,000		(8	)		*
Mark Waslen		55,000		(9	)		*

*	Less than 1%.
(1)	Pursuant to the rules of the Securities and Exchange Commission, shares of common shares that an individual or group has a right to acquire within 60 days pursuant to the exercise of options are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Percentage of ownership is based on 44,803,735 common shares outstanding as of February 29, 2008.
(2)	Mr. Kellogg holds directly 571,380 common shares and options to purchase 45,000 common shares exercisable within 60 days of February 29, 2008. Indirectly, through I.A.T. Reinsurance Syndicate Ltd., Mr. Kellogg holds 5,224,800 common shares. I.A.T. Reinsurance Syndicate Ltd. is a Bermuda corporation of which Mr. Kellogg is the sole holder of its voting stock. Mr. Kellogg disclaims beneficial ownership of these shares.
(3)	Mr. Koo beneficially owned 5,690,786 common shares jointly with Ms. Cho Siu Sin, Mr. Koo’s wife. He also holds directly options to purchase 30,000 common shares exercisable within 60 days of February 29, 2008.
(4)	Based on a Schedule 13G filed by Invesco Ltd. with the SEC on February 13, 2008.
(5)	Consists of 40,000 options to purchase common shares exercisable within 60 days of May 14, 2008 and 50,000 options to purchase common shares exercisable within 60 days of February 29, 2008.
(6)	Includes 1,516 common shares and that are registered to Jean S. Tsai, Mr. Wang’s wife.
(7)	Includes 2,500 common shares and options to purchase 45,000 common shares exercisable within 60 days of February 29, 2008.

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(8)	Consists of options to purchase common shares exercisable within 60 days of February 29, 2008.
(9)	Includes 10,000 common shares and options to purchase 45,000 common shares exercisable within 60 days of February 29, 2008.

     To our knowledge, the Company is not directly or indirectly owned or controlled by another corporation or corporations, by any foreign government or by any other natural or legal person severally or jointly.

     All of the holders of our common shares have equal voting rights with respect to the number of common shares held. As of February 29, 2008, there were approximately 681 holders of record of our common shares. According to information provided to us by our transfer agent, 658 holders of record with addresses in the United States held 37,735,283 of our common shares at February 29, 2008.

     The following table reflects the percentage ownership of our common shares during the last three years by shareholders who beneficially owned 5% or more of our common shares at February 29, 2008:

	Percentage Ownership(1)
	March 1,				February 29,
	2006		2007		2008
M. K. Koo		13.1		12.7		12.7
Peter R. Kellogg (2)		13.1		13.0		12.9
I.A.T. Reinsurance Syndicate Ltd.		11.7		11.7		11.7
PowerShares Capital Management LLC and its parent		—		—		7.1

(1)	Based on 43,505,586, 44,803,735 and 44,803,735 common shares outstanding on March 1, 2006, March 1, 2007 and February 29, 2008, respectively.
(2)	Includes shares registered in the name of I.A.T. Reinsurance Syndicate Ltd., of which Mr. Kellogg disclaims beneficial ownership.

     The Company is not aware of any arrangements that may, at a subsequent date, result in a change of control of the Company.

Certain Relationships and Related Transactions

     Not applicable

ITEM 8. FINANCIAL INFORMATION

Financial Statements

     Our consolidated financial statements have been appended to this Form 20-F (see pages F-2 to F-41).

Legal Proceedings

     We are not a party to any legal proceedings other than routine litigation incidental to our business and there are no material legal proceedings pending with respect to our property, other than as described below.

Tele-Art and Related Litigation

     In June 1997, Nam Tai filed a petition in the British Virgin Islands for the winding up of Tele-Art Inc. on account of an unpaid judgment debt owed to Nam Tai by Tele-Art Inc. The High Court of Justice of the British Virgin Islands granted an order to wind up Tele-Art Inc. in July 1998. Tele-Art Inc. appealed to the Court of Appeal of the British Virgin Islands against the winding up order. This appeal was heard on January 13, 1999 by the Court of Appeal, which dismissed the appeal on January 25, 1999. On January 22, 1999, pursuant to our Articles of Association, we redeemed and cancelled 415,500 (see note 1 at the end of this section) shares of Nam Tai registered in the name of Tele-Art Inc. (the “First Redemption”) at a price of $3.73 per share to offset substantially all of the judgment debt of $799,000 plus interest and legal costs totaling approximately $1.7 million. Nam Tai had also previously withheld dividends on shares beneficially owned by Tele-Art Inc., which were applied towards the partial satisfaction of the said judgment debts, costs and interest.

Following the completion of the First Redemption on January 22, 1999, Nam Tai received notice that David Hague, then liquidator of Tele-Art Inc., had obtained an ex-parte injunction from the High Court preventing Nam Tai from redeeming 415,500 (see note 1 at the end of this section) shares. In September 1999, the High Court heard the application by Nam Tai dated March 22, 1994 for an inquiry into damage suffered by Nam Tai, (the “First Inquiry”), as a result of the ex-parte injunction granted to Tele-Art Inc. against Nam Tai on September 29, 1993, which prohibited Nam Tai from proceeding with a rights offering in September 1993. On August 9, 2002, the High Court delivered its decision on the First Inquiry and awarded Nam Tai damages of approximately $34.0 million.

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     On July 5, 2002, upon our application, the High Court ordered the removal of David Hague’s ex-parte injunction and ordered an inquiry into damages suffered by Nam Tai as a result of the injunction (the “Second Inquiry”).

     On August 12, 2002, we redeemed and cancelled, pursuant to our Articles of Association, the remaining 509,181 (see note 2 at the end of this section) shares beneficially owned by Tele-Art Inc. (the “Second Redemption”)at a price of $6.14 per share. Including the dividends which we had withheld and credited against the judgment, this offset a further approximately $3.5 million in judgment debts owed to us by Tele-Art Inc. We recorded the $3.3 million redemption net of expenses as other income in 2002.

     In accordance with the directions given by the High Court in respect of the Second Inquiry on March 28, 2003, Nam Tai filed its points of claim on April 3, 2003 and subsequently filed amended points of claim on April 16, 2003. In breach of the said directions, David Hague failed to file his points of defense on June 20, 2003 as ordered by the court but instead, he filed an application in the High Court, inter alia, to strike out Nam Tai’s points of claim and for summary judgment on the inquiry into damages on June 20, 2003. Nam Tai thereupon applied to the High Court on August 19, 2003 for judgment against David Hague in default of defence on the basis that David Hague had not complied with the directions of the court for the filing of his points of defence to Nam Tai’s points of claim.

     Both applications were heard by the High Court on May 12, 2004. At that hearing, the Court granted David Hague leave to file his points of defence. Nam Tai filed an application for leave to appeal against this ruling on May 24, 2004. The High Court dismissed David Hague’s strike-out application on December 14, 2004 and David Hague applied for leave to appeal against the order dismissing his application on December 28, 2004. Nam Tai’s appeal and David Hague’s appeal were heard by the Court of Appeal on September 19 to 21, 2005 and that Court delivered its judgment on January 16, 2006. In this judgment, the Court of Appeal reversed the High Court’s ruling on David Hague’s application and struck out Nam Tai’s points of claim on the inquiry into damages on the ground that Nam Tai had no realistic chance of succeeding on the same. The Court also ordered costs against Nam Tai to be assessed on a prescribed costs basis. The Court further expressed the view that, in light of its dismissal of Nam Tai’s points of claim, it was not necessary to rule on Nam Tai’s appeal against the dismissal of its application for judgment in default since the point was now academic with the dismissal of Nam Tai’s points of claim.

     Nam Tai filed an application for leave to appeal the decision of the Court of Appeal to the Privy Council, the final appellate court in the British Virgin Islands, on February 3, 2006. The application for leave to appeal was heard by the Court of Appeal on May 8, 2006. The Court delivered its judgment on May 9, 2006 dismissing Nam Tai’s application for leave on the ground that the matter was not one of great public importance and therefore did not merit the consideration of the Privy Council. Nam Tai was ordered to pay Mr. Hague’s costs of the application such costs were to be assessed in default of an agreement.

     Nam Tai being dissatisfied with the judgment of the Court of Appeal denying leave to appeal applied directly to the Privy Council on November 3, 2006 for special leave to appeal to the Privy Council. Nam Tai’s application for special leave was heard by the London based Privy Council on March 29, 2007 and dismissed with costs.

     Previously, on February 4, 1999, David Hague, the then liquidator of Tele-Art Inc., filed a summons, (the “Priority Summons”), in the British Virgin Islands seeking, among other matters:

• A declaration as to the respective priorities of the debts of Tele-Art Inc. to the Bank of China, Nam Tai, and other creditors and their respective rights to have their debts discharged out of the proceeds of the Tele-Art Inc.’s Nam Tai shares;

• An order setting aside the First Redemption, and ordering delivery of all shares in our possession or control of to the liquidator; and

• Payment of all dividends in respect of Tele-Art Inc.’s Nam Tai shares.

     The Priority Summons was heard by the High Court on July 29 and 30, 2002. The Court delivered its judgment on January 21, 2003 declaring that the First Redemption and set-off of dividends on the 415,500 (see note 1 at the end of this section) shares should be set aside and further that all of Tele-Art Inc.’s property withheld by Nam Tai be delivered to Tele-Art Inc. in liquidation. On February 4, 2003, Nam Tai filed an application for a stay of execution and leave to appeal the decision. The appeal was heard on January 12, 2004 and judgment was delivered on April 26, 2004. The Court of Appeal held that the First Redemption was proper and efficacious. Nam Tai was however ordered to return to the liquidator the redemption proceeds and dividends payable on the redeemed shares. David Hague obtained leave to appeal to the Privy Council on September 21, 2004 against the Court of Appeal finding that the redemption by Nam Tai was efficacious.

     The Bank of China, which had been involved in the proceedings in the High Court and Court of Appeal relating to the Priority Summons, applied to the Privy Council on December 12, 2005 for special leave to intervene and to be joined as a respondent to the Privy Council appeal of David Hague, firstly so as to be in a

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position to support David Hague’s appeal and secondly to appeal against that part of Court of Appeal order that declared that the redemption price for the sale of the Nam Tai shares owned by Tele-Art Inc. and redeemed by Nam Tai and all withheld dividends to be paid to the liquidator of Tele-Art Inc. rather than the Bank of China despite a finding by the BVI court that the Bank of China was a secured creditor of Tel-Art Inc. The Bank of China’s application for special leave was heard by the Privy Council on February 6, 2006. The Privy Council granted the Bank special leave to intervene in the proceedings on the ground that the matter raised important points of law.

     The Privy Council heard David Hague’s Appeal on October 9, 2006 and delivered its Judgment on November 20, 2006 (the “Judgment”). In its Judgment, the Privy Council allowed Mr. Hague’s appeal and declared that Nam Tai’s redemptions of the shares of Nam Tai owned by Tele-Art Inc on January 22, 1999 and August 12, 2002 were nullities and ordered Nam Tai to rectify its register of members, i.e., shareholders registry, to reinstate the shares it had redeemed under the First and Second Redemption, together with any other shares which have accrued by way of exchange or dividend since the redemptions. It also declared in its Judgment that the Bank of China be registered as the owner of the reinstated shares. The Judgment ordered Nam Tai to pay the costs incurred by Mr. Hague and the Bank of China in the appeal to the Privy Council. Under the terms of the Judgment, the Bank of China was entitled to have Tele-Art Inc.’s debt to Bank of China and its costs in relation to the Privy Council proceedings paid from proceeds of the sale of the reinstated Nam Tai shares.

     On January 8, 2007, the Bank of China wrote to Nam Tai demanding that it comply with the Privy Council Order by (a) rectifying its share register to reflect the fact that the Bank of China is the owner of 1,017,149 shares; (b) issuing to the Bank of China a share certificate for the shares effective as of the dates they were redeemed and the dates of issue for shares attributable to the redeemed shares as a consequence of Nam Tai’s three-for-one stock split of June 30, 2003 and one-for-ten stock dividend of November 7, 2003; and (c) sending the share certificates to the Bank of China’s address stated in the Order. The Bank of China also demanded payment of dividends on the redeemed shares that the Bank of China calculated at approximately $5.6 million and made on the basis that as Bank of China, as the registered owner of the shares, was entitled to payment of these dividends.

     Nam Tai responded on January 23, 2007 confirming that it intended to take all necessary steps to comply with the Judgment and to this end was in the process of finalizing advice from its U.S. Securities lawyers on the proper method of reinstating the shares to the Bank of China. Nam Tai’s common shares are listed on the New York Stock Exchange. Accordingly, we applied to the NYSE to list on the NYSE the 1,017,149 shares to be reinstated and delivered to the Bank of China in accordance with the Judgment. We subsequently received notice from the NYSE that such shares had been approved for listing subject to official notice of reinstatement. Nam Tai thereafter proceeded to issue instructions to its transfer agent to reinstate these shares and to register them in the name of the Bank of China. These instructions were duly carried out and the Bank of China became the registered owner of the 1,017,149 shares.

     Nam Tai however disputed the Bank of China’s claim for payment of the dividends on the ground that this was contrary to what the Bank of China had argued in the Privy Council and in any event was not part of the Judgment.

     Nam Tai had not paid dividends on the redeemed shares since 1997 and at September 4, 2007 ( the day immediately preceding the date the Bank of China sold a portion of the redeemed shares to satisfy its claim against Tele-Art, as discussed below), the amount that would have accrued on the redeemed shares had such shares not been redeemed totaled approximately $5.6 million. The Bank of China however subsequently abandoned its claim to the dividends upon receipt of payment of their debt from the proceeds of the sale of the redeemed shares in September 2007.

     The Bank of China forwarded the share certificates in respect of 477,319 shares to Mr. Glen Harrigan, the official liquidator of Tele-Art Inc (the “Liquidator”) on September 18, 2007. In forwarding the said shares the Bank informed the Liquidator that the said shares represented the balance of the shares remaining after they had liquidated 539,830 shares, from which the Bank of China had received sale proceeds of the sum of $6,936,709.36. Thereafter the Bank by its letter of November 1, 2007 purported to give an account as to the application of such sale proceeds.

     The sale proceeds retained by the Bank of China included a provision of approximately $0.9 million as its legal costs for related litigation. Nam Tai has been advised by its legal advisers that such retention is wrongful. Nam Tai intends to commence legal proceedings against the Bank of China for such wrongful retention and for a true accounting of the sale proceeds retained by the Bank of China in payment of the amounts allegedly owing to it. Also, the Bank of China had made claims related to the liquidation of Tele-Art against Nam Tai in the High Court of Hong Kong, which claims Nam Tai is now defending. Furthermore, investigations by Nam Tai as the assignee of certain rights of actions of the liquidator of Tele-Art to recover the assets of Tele-Art are still continuing. The liquidation case of Tele-Art is therefore not expected to be completed soon but will continue for quite some time. Therefore, the cash dividends through September 4, 2007 attributable to the 539,830 redeemed shares that were sold by Bank of China and the cash dividends accruing to date and attributable to the remaining

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redeemed shares have been deposited into a segregated account. Similarly, future cash dividends attributable to the remaining redeemed shares will be, until such shares are liquidated, deposited in such segregated account, as will the net proceeds from the remaining shares when liquidated. From the funds so deposited, all future legal costs and other expenses relating to the liquidation of Tele-Art will be paid until the Tele-Art liquidation is completed and finalized.

     On August 25, 2005, the Liquidator filed a summons in the High Court of the BVI seeking approval of his fourth liquidator’s report. The report sought the Court’s approval of his recommendation of the amount of debt owed by Tele-Art Inc. to Nam Tai of approximately $39.0 million, to two other unsecured creditors of approximately $221,127 and to David Hague for fees and expenses as Liquidator of approximately $381,860. The report also sought the Court’s approval of Nam Tai’s proposal for the distribution of the redemption proceeds among the unsecured creditors as well as the Court’s directions on whether the Bank of China was eligible to claim any amounts against Tele-Art Inc. and, if eligible, the quantum of such debt. This liquidator’s summons was scheduled for hearing on February 20, 2006, but that hearing was postponed to a date to be fixed by the Registrar of the High Court. We anticipate that in light of the Judgment of November 20, 2006, the Liquidator may have sought to have the issues raised in its summons adjudicated by the BVI court, however to date we have received no information to this effect or otherwise as such the status at present of these proceeding remains unchanged.

     On April 11, 2005, the Bank of China also filed a summons to the High Court of the British Virgin Islands seeking orders to compel Nam Tai to pay the redemption price and dividends ordered by the Court of Appeal on the appeal of the Priority Summons to Bank of China. Nam Tai filed an affidavit of evidence in response on July 19, 2005. A determination by the Court of this proceeding has, now been rendered moot by the Privy Council Judgment and although we expect that the Bank of China will now withdraw or abandon its prosecution of these proceedings we are yet to receive confirmation to this effect or otherwise.

     The losses we incurred of $14.5 million at and through our year ended December 31, 2006 arising from the Judgment ordering reinstatement of our redeemed shares were determined by taking into account the fair value (i.e. market closing price) of our shares on November 20, 2006 (the date of the Judgment); the estimated costs and expenses of the Bank of China and David Hague that we expect will be claimed in connection with the Privy Council litigation proceedings; and a reversal of a $3.9 million provision we had made in 2003 with respect to these proceedings.

     Nam Tai has continued to vigorously pursue all legal alternatives available to recover the maximum amount of the outstanding debt from Tele-Art Inc. as well as to pursue other parties that may have assisted in any transfers of the assets from Tele-Art Inc.

     In furtherance of this objective, Nam Tai commenced proceedings in September 2002 against David Hague and PriceWaterhouseCoopers for, inter alia, negligence and breach of statutory duty in their conduct of the liquidation. David Hague had submitted a letter of resignation for the post of liquidator of Tele-Art Inc. on September 3, 2002, to the High Court and his resignation was approved by the High Court on December 17, 2002., Mr. Glenn Harrigan, was then appointed by the British Virgin Islands court on July 11, 2003.

     David Hague and PriceWaterhouseCoopers applied to the High Court on December 24, 2002, challenging the service of these proceedings on them in Hong Kong and British Virgin Islands court’s jurisdiction to determine the claim applied by Nam Tai. The application was heard by the High Court on May 11 and 12, 2004 and dismissed in its judgment on October 29, 2004. David Hague and PriceWaterhouseCoopers obtained leave to appeal this judgment in March 2005 and the appeal was heard by the Court of Appeal on September 19 to 21, 2005. The Court of Appeal delivered its judgment dismissing the appeal and awarding costs to Nam Tai. David Hague and PriceWaterhouseCoopers made an application on February 6, 2006 for leave to appeal this judgment to the Privy Council. Nam Tai cross-applied for leave to appeal to the Privy Council on February 3, 2006 the costs awarded to Nam Tai in the Court of Appeal on the basis that such costs were determined by the application of incorrect legal principles and were in any event too low and inconsistent with cost orders made against Nam Tai in other appeal proceedings involving David Hague.

     Both Nam Tai and the David Hague’s application for leave to Appeal were heard by the Court of Appeal on May 9, 2006. The Court granted David Hague’s application for leave to appeal but dismissed Nam Tai’s application with costs on the ground that the matter was not one of great public importance but merely concerned the private matter of a party to litigation being aggrieved by the costs awarded to it by the Court. Nam Tai being dissatisfied with this decision applied for special leave to appeal direct to the Privy Council on November 4, 2006. This application was heard by the Privy Council on March 24, 2007 and dismissed with costs on the ground that the matter did not raise any important points of law.

     David Hague’s Appeal against the September 2005 Order of the Court of Appeal upholding the Judgment of the High Court dismissing his application to set aside service of the Claim Form on him was heard by the Privy Council in London in January 21, 2008. The Privy Council set aside the Order of the Court of Appeal and granted Mr. Hague’s application to set aside service of the Claim Form on the ground that Nam Tai, as an individual creditor, had no cause of action against David Hague and Price WaterhouseCoopers. The decision of

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the Privy Council effectively brought to substantive claim against David Hague and PricewaterhouseCoopers to an end.

     Nam Tai also instituted proceedings in the British Virgin Islands against UBS PaineWebber, (“UBS”), on June 20, 2005, for breach of trust with respect to UBS’s role as brokers in carrying out the terms of the September 1997 British Virgin Islands court order for the sale of Tele-Art Inc.’s Nam Tai shares in sufficient quantities to pay the debts of the Bank of China and Nam Tai. UBS subsequently filed an application challenging the jurisdiction of the Court. On July 25, 2006 however, the Court upon the application of UBS made an Order staying the BVI court proceedings pending the outcome of the New York Court proceedings which in effect dealt with almost identical matters as the BVI proceedings.

Notes:

Subsequent to November 7, 2003, the number of shares was adjusted to 457,050 to reflect the one-for-ten stock dividend effective on that date.

Subsequent to November 7, 2003, the number of shares was adjusted to 560,099 to reflect the one-for-ten stock dividend effective on that date.

Previously Reported Class Actions

     As we have previously reported, we and certain of our directors were defendants in consolidated class actions entitled Rocco vs. Nam Tai Electronics et al., Lead Case No. 03-cv-01148-JES, originally commenced on February 20, 2003 and pending in the United States District Court in the Southern District of New York. The named plaintiffs purported to represent a putative class of persons who purchased our common shares from July 29, 2002 through February 18, 2003. The plaintiffs asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and allege that misrepresentations and/or omissions were made during the alleged class period concerning the partial reversal of an inventory provision and a charge to goodwill related to our LCD Products segment. We have filed an answer to the amended and consolidated complaint and oral argument on the plaintiffs’ most recent motion for class certification was held on February 1, 2007. Following that hearing, on August 21, 2007, the court denied the plaintiffs’ motion for class certification.

     A conference with the court was held on January 17, 2008 wherein the plaintiff indicated that he wished to proceed with his case as an individual, notwithstanding the denial of class certification. The court ordered that the parties to begin discovery within the next six months and to appear for a pretrial conference on September 16, 2008. Recently the parties reached an agreement in principle on a possible settlement of the individual action; however the agreement has not yet been concluded and there is no assurance that it will be concluded. The damages sought by the plaintiff in an individual capacity are not material to our financial condition or results of operations and accordingly we do not intend to provide further disclosure on this litigation unless an event occurs during its course that we believe would be material to investors.

Export Sales

     The following table reflects the approximate percentages of our net sales to customers by geographic area, based upon location of product delivery, for the periods years ended December 31, 2005, 2006 and 2007:

	December 31,
Geographic Areas	2005			2006			2007
China (excluding Hong Kong)		19	%		31	%		22	%
Europe		17			15			16
Japan		2			2			3
United States		4			9			15
Hong Kong		48			30			33
North America (excluding United States)		—			—			1
Korea		7			6			4
Other		3			7			6
		100	%		100	%		100	%

Dividends

     We have paid an annual dividend for the last fourteen consecutive years. On February 4, 2008, we announced that our dividend to be payable in 2008 would be set at $0.88 per share. Such dividends will be paid quarterly in 2008 commencing with the first quarter 2008 dividend of $0.22 per share. The following table sets forth the total cash dividends and dividends per share we have declared for each of the five years in the period ended December 31, 2007, adjusted to give effect to a three-for-one stock split effective on June 30, 2003.

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	Year ended December 31,
	2003		2004		2005		2006		2007
Total dividends declared (in thousands)	$	37,584	$	20,424	$	56,324	$	66,497	$	37,635
Regular dividends per share	$	0.20	$	0.48	$	1.32	$	1.44	$	0.84
Special dividends	$	0.80	$	—	$	—	$	0.08	$	—
Total dividends per share	$	1.00	$	0.48	$	1.32	$	1.52	$	0.84

     We declared special dividends in 2003 and 2006 for the reasons described below:

     In 2003, in celebration of our fifteenth anniversary since our listing and initial public offering in 1988, our fifteenth consecutive year of profitability, and the transfer of our shares from the NASDAQ National Market to the NYSE in January 2003; and

     In 2006, in celebration of Company’s thirtieth founding anniversary and its fifth consecutive quarter of record-breaking sales.

     Under our dividend policy implemented in 2006, our Board of Directors determine and declare the amount of Nam Tai’s dividend payable in 2008 based on our 2007 operating income, our current and estimated future cash, cash flow and capital expenditure requirements at the time of the yearly declaration and such other factors as Nam Tai’s board believes reasonable and appropriate to consider in the determination and plans to announce the declared amount of that dividend. On February 4, 2008, we announced that our dividend to be payable in 2008 would be set at $0.88 per share. It is our general policy to determine the actual annual amount of future dividends, if any, based upon our growth during the preceding year. Future dividends, if any, will be in the form of cash or stock or a combination of both. We may not be able to pay dividends in the future or may decide not to declare them in any event. We will determine the amounts of the dividends when they are declared and even if dividends are declared in the future, we may not continue them in any future period.

ITEM 9. THE LISTING

     Our common shares are traded in the United States and have been listed on the New York Stock Exchange since January 2003 under the symbol “NTE”.

     The following table sets forth the high and low closing sales prices for our common shares for the quarters in the three-year period ended December 31, 2007:

	2005						2006						2007
					Average Daily						Average Daily						Average Daily
					Trading						Trading						Trading
	High		Low		Volume(1)		High		Low		Volume(1)		High		Low		Volume(1)
First Quarter	$	28.36	$	17.25		376,920	$	24.27	$	21.31		224,826	$	15.28	$	12.70		222,472
Second Quarter		27.80		19.70		302,367		23.10		21.46		173,659		14.38		11.92		244,741
Third Quarter		26.65		22.50		219,858		22.56		11.43		504,411		13.58		11.76		248,325
Fourth Quarter		25.88		21.27		238,459		16.95		12.57		317,697		13.69		11.02		236,070

(1)  Determined by dividing the sum of the reported daily volume for the quarter by the number of trading days in the quarter.

     The following table sets forth the high and low closing sale prices of our shares for each of the last five years ended December 31, adjusted to give effect to a three-for-one stock split effective on June 30, 2003 and a one-for-ten stock dividend effective on November 7, 2003:

Year ended	High		Low		Daily Trading Volume(1)
December 31, 2007	$	15.28	$	11.02		238,018
December 31, 2006		24.27		11.43		305,468
December 31, 2005		28.36		17.25		283,482
December 31, 2004		34.24		13.99		532,568
December 31, 2003		42.48		6.94		597,858

(1)  Determined by dividing the sum of the reported daily volume for the year by the number of trading days in the year.

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     The following table sets forth the high and low closing sale prices of our shares during each of the most recent six months:

					Daily
					Trading
Month ended	High		Low		Volume(1)
February 29, 2008	$	9.91	$	8.87		322,325
January 31, 2008		11.92		8.37		440,571
December 31, 2007		11.96		11.19		252,715
November 30, 2007		12.49		11.02		197,467
October 31, 2007		13.69		12.05		256,843
September 30, 2007		13.58		12.58		232,479

(1)  Determined by dividing the sum of the reported daily volume for the month by the number of trading days in the month.

ITEM 10. ADDITIONAL INFORMATION

Share Capital

     Our authorized capital consists of 200,000,000 common shares, $0.01 par value per share. As of February 29, 2008, we had 44,803,735 common shares outstanding.

Memorandum and Articles of Association

     On December 5, 2007, we filed with the Registrar of Corporate Affairs of the British Virgin Islands, the jurisdiction of registrant’s organization, an amended Memorandum and Articles of Associations (collectively the “2007 Charter”), the instruments governing a company organized under the law of the British Virgin Islands, which are comparable in purpose and effect to certificates or articles of incorporation and bylaws of corporations organized in a state of the United States. The 2007 Charter, which became effective on December 5, 2007, amended and restated registrant’s Memorandum and Articles of Association, as amended, theretofore in effect. The purpose of adopting the 2007 Charter was to:

     1. Make our shares eligible for a direct registration system operated by a securities depository in accordance with Section 501.00 (B) of the rules of the New York Stock Exchange that became effective on January 1, 2008 as to companies, like us, having equity securities listed on the New York Stock Exchange prior to January 1, 2007;

     2. Make various consequential amendments to our Memorandum and Articles of Association so as to make them consistent with the BVI Business Company’s Act, 2004, as amended (the “Act”), the Act becoming effective as to us on January 1, 2007, superseding as of that date the International Business Companies Act, 1984, the relevant BVI legislation which had previously governed us;

     3. Eliminate our authority to issue bearer shares that would otherwise be permitted under BVI law, our directors believed to be inappropriate for a company with shares publicly traded in the United States;

     4. Authorize our Chief Executive Officer, Chief Financial Officer and our other officers designated by the Chairman of the Board of Directors (or the directors in the absence of designation by the Chairman of the Board of Directors), to serve as the Chairman of all meetings of shareholders in the absence of the Chairman of the Board of Directors; and

     5. Make certain other changes as are indicated Memorandum and Articles of Association.

     Under our 2007 Charter, holders of our shares:

• Continue to be entitled to one vote for each whole share on all matters to be voted upon by shareholders, including the election of directors;

• Continue not to have cumulative voting rights in the election of directors; and

• Continue to be entitled to receive dividends if and when declared by our board of directors out of funds legally available under British Virgin Islands law.

     Our 2007 Charter did not change that

• all of common shares are equal to each other with respect to liquidation and dividend rights;

• in the event of our liquidation, all assets available for distribution to the holders of our common shares are distributable among them according to their respective holdings; or

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• holders of our common shares have no preemptive rights to purchase any additional, unissued common shares.

     Pursuant to our 2007 Charter and pursuant to the laws of the British Virgin Islands, our Board of Directors without shareholder approval amend our Memorandum and Articles of Association:

• to restrict the rights or powers of our shareholders to amend the Memorandum or the Articles;

• to change the percentage of shareholders required to pass a resolution of shareholders to amend the Memorandum or the Articles; or

• in circumstances where the Memorandum or the Articles cannot be amended by the Shareholders; or

• to change the rights of our shareholders as described in any of the bulleted provisions set forth above in this Report.

     The power of our Board of Directors to amend our Memorandum and Articles of Association continues to include amendments to increase or reduce our authorized capital stock. Our ability to amend our Memorandum and Articles of Association without shareholder approval in this fashion could have the effect of delaying, deterring or preventing our change in control, including one involving a tender offer to purchase our common shares or to engage in a business combination at a premium over the then current market price of our shares.

     We have never had any class of stock outstanding other than our common shares nor have we ever changed the voting rights with respect to our common shares.

     Our registered office is at P.O. Box 3342, Road Town, Tortola, British Virgin Islands and we have been assigned company number 3805.

     As set forth in Clause 4 of our Memorandum of Association included in our 2007 Charter, our object or purpose is to engage in any act or activity that is not prohibited under British Virgin Islands law .

     As set forth in the following Regulations of our Articles of Association including in our 2007 Charter:

     53 provides that a director may be counted as one of a quorum in respect of any contract or arrangement in which the director is materially interested or makes with the Company.”

     46 allows the directors to vote compensation to themselves in respect of services rendered to us.

     62 provides that the directors may by resolution exercise all the powers on our behalf to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever we borrow money or as security for any of our debts, liabilities or obligations or those of any third party. These borrowing powers can be altered by an amendment to the Articles

     78 of the Articles allows us to deduct from any shareholder’s dividends amounts owing to us by that shareholder.

     8(a) provides that we can redeem shares at fair market value from any shareholder against whom we have a judgment debt.

     5(a) of the Articles provides that the Company’s registered shares may be certificated or uncertificated and shall be entered in the register of members of the Company and registered as they are issued.

     7 provides that without prejudice to any special rights previously conferred on the holders of any existing shares, any of our shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividends, voting, return of capital or otherwise as the directors may from time to time determine.

     9 provides that if at any time the capital stock is divided into different classes or series of shares, the rights attached to any class or series may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of any other class or series of shares which may be affected by such variation.

     22 to 39 under applicable BVI law provide that directors may convene meetings of our shareholders at such times and in such manner and places as the directors consider necessary or desirable, and they shall convene such a meeting upon the written request of shareholders holding more than 30% of the votes of our outstanding voting shares. Other than providing, if requested, reasonable proof of a holder’s status as a holder of our shares as of the applicable record date, there is no condition to the admission of a shareholder or his or her proxy holder to our meetings of shareholders.

     There is no provision in the Articles for the mandatory retirement of directors; however, we have fixed 65 as the mandatory age of retirement for our directors. Directors are not required to own our shares in order to serve as directors.

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     British Virgin Islands law and our 2007 Charter impose no limitations on the right of nonresident or foreign owners to hold or vote our securities.

     There are no provisions in our Memorandum of Association or Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

     We filed our 2007 Charter with the Securities and Exchange Commission as Exhibit 1.1 to an Amendment to Form 8-A (Amendment No. 1) on December 13, 2007 and the provisions of our 2007 Charter may be reviewed by examining that filing.

Transfer Agent

     Registrar and Transfer Agent Company, 10 Commerce Drive, Cranford, New Jersey 07016-3572, U.S.A., is the United States transfer agent and registrar for our common shares.

Material Contracts

     The following summarizes each material contract, other than contracts entered into in the ordinary course of business, to which Nam Tai or any subsidiary of Nam Tai is a party, for the two years immediately preceding the filing of this report:

     On April 13, 2006 and March 9, 2006, Nam Tai’s subsidiary, Nam Tai Group Management Limited, as seller, entered into an Assignment and Sale and Purchase Agreement, respectively, with Top Ease (H.K.) Limited, as purchaser, for the sale of the 15th Floor and car park space no. 96 on 6th Floor, China Merchants Tower, Shun Tak Centre, No. 168-200 Connaught Road Central, Hong Kong for a purchase price of approximately $20,512,820.

     On March 14, 2006, Nam Tai’s wholly-owned subsidiary, Zastron Electronic (Shenzhen) Co. Ltd entered into an Investment Agreement with Shenzhen Baoan District High and New Technology Industrial Park Development and Investment Co., Ltd. with respect to the investment by Nam Tai’s subsidiary in a project in Shenzhen Guangming Hi-Tech Industrial Park of approximately $1.5 million, representing the initial payment for the purchase of land of Shenzhen Guangming with an approximately 1.3 million square foot.

     On July 17, 2006, Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co. Ltd. entered a Banking Facilities Letter with The Hongkong and Shanghai Banking Corporation Limited for Nam Tai’s subsidiary to receive documentary credits to suppliers and import loan facilities up to approximately $12.9 million

     On July 17, 2006, Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd., entered into a banking facilities letter with The Hongkong and Shanghai Banking Corporation Limited for Nam Tai’s subsidiary to receive import credit facilities up to $15,000,000.

     On July 21, 2006, Nam Tai signed a guarantee. in favor of The Hongkong and Shanghai Banking Corporation Limited with maximum liability of $15,000,000 for the banking facilities of Zastron Electronic (Shenzhen) Co. Ltd.

     On October 26, 2006, Nam Tai’s wholly-owned subsidiary, Zastron Precision-Tech Limited and the Administration Committee of Wuxi National High and New Technology Industry Development District entered into a separate Cooperation Agreement under which Zastron agreed to invest approximately $63,000,000 to construct a production plant for LCD modules, electronic modules and other products and establish an industrial presence and wholly-owned foreign enterprise called Zastron Precision-Tech (Wuxi) Limited for a period of 50 years on an approximately 515,000 square foot site in Wuxi with a sponsor of approximately $346,000 land use transfer price to encourage the Company’s development project in Wuxi.

     On October 26, 2006, Nam Tai’s wholly-owned subsidiary, Zastron Precision-Tech Limited and the Administration Committee of Wuxi National High and New Technology Industry Development District entered into a Cooperation Agreement under which Zastron agreed to invest approximately $65,000,000 to construct a production plant for flexible printed circuit boards and establish an industrial presence and wholly-owned foreign enterprise called Zastron Precision-Flex (Wuxi) Co. Ltd for a period of 50 years on an approximately 470,000 square foot site in Wuxi with a sponsor of approximately $510,000 land use transfer price to encourage the Company’s development project in Wuxi.

     On December 25, 2006, Wuxi Municipal Bureau of State Land and Resources assigned by Land Use Transfer Agreement the land use right of No. B14-A Plot located in Wuxi National High and New Technology Industry Development District to Nam Tai’s subsidiary, Zastron Precision-Tech (Wuxi) Co. Ltd in exchange for payment by Nam Tai’s subsidiary of approximately $1.1 million.

     On December 31, 2006, Wuxi Municipal Bureau of State Land and Resources assigned by Land Use Transfer Agreement the land use right of No. A64-2 Plot located in Meicun Industrial Concentration Area of Wuxi New District to Nam Tai’s subsidiary, Zastron Precision-Flex (Wuxi) Co. Ltd., in exchange for payment by Nam Tai’s subsidiary of approximately $1 million.

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     On February 6, 2007, Nam Tai’s subsidiary, Zastron Precision-Flex (Wuxi) Co. Ltd. and Rider Levett Buchnall Limited (formerly known as Levett and Bailey Quantity Surveyors Limited) entered into a Consultancy Agreement under which Rider Levett Buchnall Limited agreed to provide quantity surveying services for FPC construction project in Wuxi with estimated consultancy fee of approximately $29.6 million (i.e. approximately RMB297,300,000)(1.3% of the estimated construction cost).

     On May 1, 2007, Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co., Ltd and a local collective committee of Shenzhen Baoan District entered into a supplemental rental agreement for renting additional facilities space to be dormitory of the Nam Tai’s subsidiary with an additional rental fee of approximately $1,306 (i.e. RMB9,810).

     On May 31, 2007, Nam Tai’s subsidiary, Zastron Precision-Tech Limited and the Hong Kong Productivity Council entered into a Consultancy Agreement under which Hong Kong Productivity Council agreed to act as the project consultant of Nam Tai throughout the implementation process of Enterprise Resources Planning System Changeover Project with service fee of approximately $460,000 (i.e. HK$3,588,000).

     On June 7, 2007, Nam Tai’s subsidiary, Namtai Electronic (Shenzhen) Co., Ltd. entered a Banking Facilities Letter with HSBC Bank (China) Company Limited for Namtai Electronic (Shenzhen) Co., Ltd to receive import credit facilities up to $5,000,000.

     On June 7, 2007, Nam Tai’s subsidiary, Nam Tai Electronic & Electrical Products Limited signed a guaranty in favor of HSBC Bank (China) Company Limited with maximum liability of $5,000,000 for the banking facilities of Namtai Electronic (Shenzhen) Co., Ltd.

     On June 7, 2007, Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd. entered a Banking Facilities Letter with HSBC Bank (China) Company Limited for Zastron Electronic (Shenzhen) Co. Ltd. to receive import credit facilities up to $10,000,000.

     On June 7, 2007, Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co. Ltd. entered a Banking Facilities Letter with HSBC Bank (China) Company Limited for Jetup Electronic (Shenzhen) Co. Ltd. to receive import credit facilities up to approximately $90 million (i.e. HK$70,000,000) and 3 years HK dollars loan up to approximately $5.1 million (i.e.HK$40,000,000).

     On June 7, 2007, Nam Tai’s subsidiary, J.I.C. Technology Company Limited signed a guaranty in favor of HSBC Bank (China) Company Limited with maximum liability of approximately $14.1 million (i.e.HK$110,000,000) for the banking facilities of Jetup Electronic (Shenzhen) Co., Ltd. This guaranty was terminated on December 31, 2007 and replaced by a new guaranty signed by Nam Tai Electronic & Electrical Products Limited with same terms and conditions as a part of Nam Tai’s reorganization.

     On June 22, 2007, Nam Tai signed a guaranty in favor of HSBC Bank (China) Company Limited with maximum liability of $10,000,000 for the banking facilities of Zastron Electronic (Shenzhen) Co. Ltd. This guaranty was terminated on December 31, 2007 and replaced by a new guaranty signed by Nam Tai Electronic & Electrical Products Limited with same terms and conditions as a part of Nam Tai’s reorganization.

     On June 30, 2007, Shenzhen Municipal Bureau of State Land and Resources assigned by Land Use Transfer Agreement and Supplemental Agreement the land use right of No. A614-0377 Plot located in Shenzhen Guangming Hi-Tech Industrial Park to Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd., in exchange for payment by Nam Tai’s subsidiary of approximately $7.5 million.

     On July 30, 2007, Nam Tai’s subsidiary, Zastron Precision-Tech Limited and Parsons Brinckerhoff (Asia) Ltd. entered into a Design Consultancy Agreement under which Parsons Brinckerhoff (Asia) Ltd. agreed to act as he design consultancy for the construction project of FPC facilities in Wuxi with service fee of approximately $583,000 (i.e.HK$4,550,000).

     On July 30, 2007, Nam Tai’s subsidiary, Zastron Precision-Flex (Wuxi) Co. Ltd. and Parsons Brinckerhoff Constructors (Shanghai) Company Limited entered into a Project Management Agreement under which Parsons Brinckerhoff Constructors (Shanghai) Company Limited agreed to project management service for the construction project of FPC facilities in Wuxi with service fee of approximately $1.1 million (i.e.RMB8,300,000).

     On September 5, 2007, Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd entered into a Supplemental Loan Agreement for extending the repayment term for a loan of $18,660,000 granted from Zastron Precision-Tech Limited to Zastron Electronic (Shenzhen) Co. Ltd. in accordance with the loan agreement dated March 30, 2004 with effective period from March 31, 2006 to March 30, 2007.

     On September 5, 2007, Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd entered into a Supplemental Loan Agreement for extending the repayment term for a loan of $18,660,000 granted from Zastron Precision-Tech Limited to Zastron Electronic (Shenzhen) Co. Ltd. in accordance with the loan agreement dated March 30, 2004 with effective period from March 31, 2007 to March 30, 2008.

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     On September 5, 2007, Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd entered into a Supplemental Loan Agreement for extending the repayment term for a loan of $5,840,000 granted from Zastron Precision-Tech Limited to Zastron Electronic (Shenzhen) Co. Ltd. in accordance with the loan agreement dated August 1, 2004 with effective period from July 14, 2006 to July 13, 2007.

     On September 5, 2007, Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd entered into a Supplemental Loan Agreement for extending the repayment term for a loan of $5,840,000 granted from Zastron Precision-Tech Limited to Zastron Electronic (Shenzhen) Co. Ltd. in accordance with the loan agreement dated August 1, 2004 with effective period from July 14, 2007 to July 13, 2008.

     On September 24, 2007, Nam Tai and its subsidiary, J.I.C. Technology Company Limited entered into a Sales and Purchase Agreement for selling 91% interest in Jetup Electronic (Shenzhen) Co. Ltd. from J.I.C. Technology Company Limited to Nam Tai with a consideration of approximately $44.5 million (i.e.HK$347,408,313.53) as a part of Nam Tai’s reorganization.

     On September 24, 2007, Nam Tai and its subsidiary, Nam Tai Electronic & Electrical Products Limited entered into a Sales and Purchase Agreement for selling 91% interest in Jetup Electronic (Shenzhen) Co. Ltd. and the entire equity of Zastron Precision-Tech Limited from Nam Tai to Nam Tai Electronic & Electrical Products Limited with a consideration of approximately $349,891,833.33 (i.e.HK$2,729,156,300) as a part of Nam Tai’s reorganization.

     On October 5, 2007, Nam Tai and its subsidiary, J.I.C. Technology Company Limited entered into a Supplemental Sales and Purchase Agreement for selling 91% interest in Jetup Electronic (Shenzhen) Co. Ltd. from J.I.C. Technology Company Limited to Nam Tai with a consideration of approximately $44.5 million (i.e.HK$347,408,313.53) and subject to the completion of the sale of Shenzhen Namtek Co. Ltd. and Namtek Japan Company Limited from Nam Tai Electronic & Electrical Products Limited to J.I.C. Technology Company Limited as a part of Nam Tai’s reorganization.

     On October 5, 2007, Nam Tai’s two subsidiaries Nam Tai Electronic & Electrical Products Limited and J.I.C. Technology Company Limited entered into a Sales and Purchase Agreement for selling entire equity of Shenzhen Namtek Co. Ltd. and Namtek Japan Company Limited from Nam Tai Electronic & Electrical Products Limited to J.I.C. Technology Company Limited with a consideration of approximately $10.3 million (i.e.HK$80,500,000) as a part of Nam Tai’s reorganization.

     On November 6, 2007, Nam Tai’s two subsidiaries, J.I.C. Technology Company Limited and Jetup Electronic (Shenzhen) Co. Ltd. entered into an External Loan Agreement for borrowing a loan of approximately $1.3 million (i.e.HK$10,500,000) form J.I.C, Technology Company Limited to Jetup Electronic (Shenzhen) Co. Ltd. with effective period from November 7, 2007 to November 6, 2008.

     On November 15, 2007, Nam Tai’s two subsidiaries, J.I.C. Technology Company Limited and Jetup Electronic (Shenzhen) Co. Ltd. entered into an External Loan Agreement for borrowing a loan of approximately $1.4 million (i.e.HK$11,000,000) from J.I.C. Technology Company Limited to Jetup Electronic (Shenzhen) Co. Ltd. with effective period from November 16, 2007 to November 15, 2008.

     On November 28, 2007, Nam Tai and its subsidiary, J.I.C. Technology Company Limited entered into a Supplemental Sales and Purchase Agreement for selling the entire equity in Jetup Electronic (Shenzhen) Co. Ltd. from J.I.C. Technology Company Limited to Nam Tai with a consideration of approximately $48.9 million (i.e.HK$381,767,378) as a part of Nam Tai’s reorganization.

     On November 28, 2007, Nam Tai’s two subsidiaries Nam Tai Electronic & Electrical Products Limited and J.I.C. Technology Company Limited entered into a Supplemental Sales and Purchase Agreement for selling entire equity of Shenzhen Namtek Co. Ltd. and Namtek Japan Company Limited from Nam Tai Electronic & Electrical Products Limited to J.I.C. Technology Company Limited with a consideration of approximately $10.3 million (i.e. HK$80,500,000) (comprising HK$654,333 for the sale of Namtek Japan Company Limited and HK$79,845,667 for the sale of Shenzhen Namtek Co. Ltd.) as a part of Nam Tai’s reorganization.

     On November 28, 2007, Nam Tai and its subsidiary, Nam Tai Electronic & Electrical Products Limited entered into a Supplemental Sales and Purchase Agreement for selling the entire equity in Jetup Electronic (Shenzhen) Co. Ltd. and the entire equity of Zastron Precision-Tech Limited from Nam Tai to Nam Tai Electronic & Electrical Products Limited with a consideration of approximately $353.1 million (i.e.HK$2,754,530,000) as a part of Nam Tai’s reorganization.

     On November 30, 2007, Nam Tai’s subsidiary, Zastron Precision-Tech Limited and SAP Hong Kong Co. Limited entered into a Professional Service Agreement, SAP Software End-User Value License Agreement for the purchase of the SAP Enterprise Resource Planning Software, together with its services of installation and implementation with a sum of approximately $1.4 milllion (i.e.HK$11,032,529).

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     On November 30, 2007, Nam Tai’s two subsidiaries Nam Tai Electronic & Electrical Products Limited and Best Whole Holdings Limited entered into a Sales and Purchase Agreement for selling entire equity of Shenzhen Namtek Co. Ltd. from Nam Tai Electronic & Electrical Products Limited to Best Whole Holdings Limited with a consideration of $800,000 as a part of Nam Tai’s reorganization.

     On November 30, 2007, Nam Tai’s two subsidiaries J.I.C. Technology Company Limited and Top Eastern Investment Limited entered into a Sales and Purchase Agreement for selling entire equity of Jetup Electronic (Shenzhen) Co. Ltd. from J.I.C. Technology Company Limited to Top Eastern Investment Limited with a consideration of approximately $23.2 million (i.e.HK$181,200,000) as a part of Nam Tai’s reorganization.

     On December 18, 2007, Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd. agreed by a guarantee letter to Shenzhen Baoan District High and New Technology Industrial Park Development Committee to subsidize the relocation allowance to local residents located on the land of No.A614-0377 Plot located in Shenzhen Guangming Hi-Tech Industrial Park in a sum up to approximately $644,000.

     On December 28, 2007, Nam Tai’s two subsidiaries, Nam Tai Electronic & Electrical Product Limited and Top Eastern Investment Limited entered into a loan agreement for a loan of approximately $3.1 million (i.e.HK$24,107,111) to be paid from Nam Tai Electronic & Electrical Product Limited to Top Eastern Investment Limited on December 31, 2008 as a part of Nam Tai’s reorganization.

     On December 31, 2007, Nam Tai’s three subsidiaries, J.I.C. Technology Company Limited, Top Eastern Investment Limited and Jetup Electronic (Shenzhen) Co. Ltd. entered into a Deed of Assignment for assigning a loan to Jetup with an amount of $2.8 million (i.e.HK$21,500,000) from J.I.C. Technology Company Limited to Top Eastern Investment Limited as a part of Nam Tai’s reorganization.

     On December 31, 2007, Nam Tai’s two subsidiaries, J.I.C. Technology Company Limited and Top Eastern Investment Limited entered into a Deed of Release for releasing and discharging Top Eastern Investment Limited from all obligation to repay the consideration sum of approximately $23.2 million (i.e.HK$181,200,000) due and owing to J.I.C. Technology Company Limited for the sale the entire equity in Jetup Electronic (Shenzhen) Co. Ltd. from J.I.C. Technology Company Limited to Top Eastern Investment Limited as a part of Nam Tai’s consideration.

     On December 31, 2007, Nam Tai’s two subsidiaries, Nam Tai Electronic & Electrical Products Limited and Best Whole Holdings Limited entered into a Deed of Release for releasing and discharging Best Whole Holdings Limited from all obligation to repay the consideration sum of $800,000 due and owing to Nam Tai Electronic & Electrical Products Limited for the sale the entire equity in Shenzhen Namtek Co. Ltd. from Nam Tai Electronic & Electrical Products Limited to Best Whole Holdings Limited as a part of Nam Tai’s consideration.

     On December 31, 2007, Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co., Ltd. entered a Banking Facilities Letter with HSBC Bank (China) Company Limited for Jetup Electronic (Shenzhen) Co. Ltd. to change the guarantor from J.I.C. Technology Company Limited to Nam Tai Electronic & Electrical Products Limited for import credit facilities up to approximately $89.7 million (i.e.HK$70,000,000) and 3 years HK dollars loan up to approximately $5.1 million (i.e.HK$40,000,000)

     On December 31, 2007, Nam Tai’s subsidiary, Nam Tai Electronic & Electrical Products Limited signed a guaranty in favor of HSBC Bank (China) Company Limited with maximum liability of approximately $14.1 million (i.e.HK$110,000,000) for the banking facilities of Jetup Electronic (Shenzhen) Co., Ltd.

     On December 31, 2007, Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd entered a Banking Facilities Letter with HSBC Bank (China) Company Limited for Zastron Electronic (Shenzhen) Co. Ltd to change the guarantor from Nam Tai Electronics, Inc. to Nam Tai Electronic & Electrical Products Limited

     On December 31, 2007, Nam Tai Electronics & Electrical Products Limited signed a guaranty in favor of HSBC Bank (China) Company Limited with maximum liability of $10,000,000 for the banking facilities of Zastron Electronic (Shenzhen) Co. Ltd.

     On December 31, 2007 Nam Tai’s subsidiary, Nam Tai Electronics & Electrical Products Limited and Jetup Electronic (Shenzhen) Co. Ltd. entered a Banking Facilities Letter with Shanghai Commercial Bank Ltd. with maximum liability of $5,000,000 for the banking facilities of Jetup Electronic (Shenzhen) Co. Ltd

     On February 6, 2008, Nam Tai Electronics, Inc. and Hong Kong Energy (Holdings) Limited, a subsidiary of HKC (Holdings) Limited (“HKC”) entered into an Exclusivity Agreement for Nam Tai to sell and HKC agreed to purchase Nam Tai’s entire equity interest in J.I.C. Technology Company Limited

     On February 26, 2008, Nam Tai Electronics, Inc. and HKC (Holdings) Limited entered into a Share Purchase Agreement for Nam Tai to sell and HKC agreed to purchase Nam Tai’s entire equity interest in J.I.C. Technology Company Limited for approximately $51.1 million.

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Exchange Controls

     There are no exchange control restrictions on payments of dividends, interest, or other payments to nonresident holders of Nam Tai’s securities or on the conduct of our operations in Hong Kong, Macao, Cayman Islands or the British Virgin Islands, where Nam Tai is incorporated. Other jurisdictions in which we conduct operations may have various exchange controls. With respect to our subsidiaries in China, with the exception of a requirement that 11% of profits be reserved for future developments and staff welfare, there are no restrictions on the payment of dividends and the removal of dividends from China once all taxes are paid and assessed and losses, if any, from previous years have been made good. We believe such restrictions will not have a material effect on our liquidity or cash flow.

Taxation

United States Federal Income Tax Consequences

     The discussion below is for general information only and is not, and should not be interpreted to be, tax advice to any holder of our common shares. Each holder or a prospective holder of our common shares is urged to consult his, her or its own tax advisor.

General

     This section is a general summary of the material United States federal income tax consequences to U.S. Holders, as defined below, of the ownership and disposition of our common shares as of the date of this report. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, or the Code, the applicable Treasury regulations promulgated and proposed thereunder, judicial decisions and current administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis. The summary applies to you only if you hold our common shares as a capital asset within the meaning of Section 1221 of the Code. The United States Internal Revenue Service, or the IRS, may challenge the tax consequences described below, and we have not requested, nor will we request, a ruling from the IRS or an opinion of counsel with respect to the United States federal income tax consequences of acquiring, holding or disposing of our common shares. This summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to the ownership of our common shares. In particular, the discussion below does not cover tax consequences that depend upon your particular tax circumstances nor does it cover any state, local or foreign law, or the possible application of United States federal estate or gift tax. You are urged to consult your own tax advisors regarding the application of the United States federal income tax laws to your particular situation as well as any state, local, foreign and United States federal estate and gift tax consequences of the ownership and disposition of the common shares. In addition, this summary does not take into account any special United States federal income tax rules that apply to a particular U.S. or Non-U.S. holder of our common shares, including, without limitation, the following:

• a dealer in securities or currencies;

• a trader in securities that elects to use a market-to-market method of accounting for its securities holdings;

• a financial institution or a bank;

• an insurance company;

• a tax-exempt organization;

• a person that holds our common shares in a hedging transaction or as part of a straddle or a conversion transaction;

• a person whose functional currency for United States federal income tax purposes is not the U.S. dollar;

• a person liable for alternative minimum tax;

• a person that owns, or is treated as owning, 10% or more, by voting power or value, of our common shares;

• certain former U.S. citizens and residents deemed to have expatriated to avoid U.S. taxation; or

• a person who receives our shares pursuant to the exercise of employee stock options or otherwise as compensation.

U.S. Holders

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     For purposes of the discussion below, you are a “U.S. Holder” if you are a beneficial owner of our common shares who or which is:

• an individual United States citizen or resident alien of the United States (as specifically defined for United States federal income tax purposes);

• a corporation, or other entity treated as a corporation for United States federal income tax purposes, created or organized in or under the laws of the United States, any State or the District of Columbia;

• an estate whose income is subject to United States federal income tax regardless of its source; or

• a trust (x) if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust or (y) if it was in existence on August 20, 1996, was treated as a United States person prior to that date and has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

     Distributions on Our Common Shares

     Subject to the passive foreign investment company, or PFIC, considerations discussed below, the gross amount of any cash distribution or the fair market value of any property distributed that you receive with respect to our common shares generally will be subject to tax as ordinary income to the extent such distribution does not exceed our current or accumulated earnings and profits, or E&P, as calculated for United States federal income tax purposes. Such income will be includable in your gross income on the date of receipt. Subject to certain limitations, dividends paid to non-corporate U.S. Holders, including individuals, may be eligible for a reduced rate of taxation if we are a “qualified foreign corporation” for U.S. federal income tax purposes. A qualified foreign corporation includes (i) a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States that includes an exchange of information program, and (ii) a foreign corporation if its stock with respect to which a dividend is paid is readily tradable on an established securities market within the United States, but does not include an otherwise qualified corporation that is a PFIC. We have not determined whether we were a PFIC in 2007, but we may have been so, and we may become a PFIC for the current taxable year of 2008. Therefore, no assurances can be made regarding our Company’s status as a qualified foreign corporation. To the extent any distribution exceeds our E&P, such distribution will first be treated as a tax-free return of capital to the extent of your adjusted tax basis in our common shares and will be applied against and reduce such basis on a dollar-for-dollar basis (thereby increasing the amount of gain and decreasing the amount of loss recognized on a subsequent disposition of such shares). To the extent that such distribution exceeds your adjusted tax basis in our common shares, the distribution will be treated as capital gain. Because we are not a United States corporation, no dividends-received deduction will be allowed to corporations with respect to dividends paid by us.

     For United States foreign tax credit limitation purposes, dividends received on our common shares will be treated as foreign source income and for taxable years beginning on or before December 31, 2006 generally will be “passive income”, or in the case of certain holders, “financial services income”. For taxable years beginning after December 31, 2006, dividends generally will be “passive category income”, or in the case of certain holders, “general category income.” You may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of foreign withholding taxes, if any, imposed on dividends paid on our common shares. The rules governing United States foreign tax credits are complex, and we recommend that you consult your tax advisor regarding the applicability of such rules to you.

     Sale, Exchange or Other Disposition of Our Common Shares

     Subject to the PFIC considerations discussed below, generally, in connection with the sale, exchange or other taxable disposition of our common shares:

• you will recognize capital gain or loss equal to the difference (if any) between:

• the amount realized on such sale, exchange or other taxable disposition and

• your adjusted tax basis in such common shares (your adjusted tax basis in the shares you hold generally will equal your U.S. dollar cost of such shares);

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• such gain or loss will be long-term capital gain or loss if your holding period for our common shares is more than one year at the time of such sale or other disposition;

• such gain or loss will generally be treated as United States source for United States foreign tax credit purposes; and

• your ability to deduct capital losses is subject to limitations.

     PFIC Considerations

     A foreign corporation will be treated as a PFIC for United States federal income tax purposes if, after applying relevant look-through rules with respect to the income and assets of subsidiaries, 75% or more of its gross income consists of certain types of passive income or 50% or more of the gross value of its assets is attributable to assets that produce passive income or are held for the production of passive income. For this purpose, passive income generally includes dividends, interest, royalties, rents (other than rents and royalties derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income.

     If we are classified as a PFIC in any taxable year, (i) U.S. Holders will generally be required to treat any gain on sales of our shares held by them as ordinary income and to pay an interest charge on the value of the deferral of their United States federal income tax attributable to such gain (generally, pledges of our common shares would be considered sales for these purposes) and (ii) certain distributions paid by us to our U.S. Holders will also be subject to an interest charge. In addition, we may be unable or unwilling to provide information to our U.S. Holders that would enable them to make a “qualified electing fund” election under which, generally, in lieu of the foregoing treatment, our earnings would be currently included in their United States federal income. However, if we are a PFIC, U.S. Holders may elect to “mark-to-market” our stock as long as our common shares are considered to be readily tradable on an established securities market within the United States, which could potentially ameloriate certain of the adverse U.S. federal income tax consequences to U.S. Holders that would result if we were classified as a PFIC.

     An actual determination of PFIC status is factual in nature. We have not determined whether we were a PFIC for the 2007 taxable year, but we may have been so. In addition, we may become a PFIC for the current taxable year of 2008. Accordinaly, there can be no assurance that we have not or will not be classified as a PFIC. Given the complexity of the issues regarding our classification as a PFIC, U.S. Holders are urged to consult their own tax advisors for guidance as to our PFIC status.

Non-U.S. Holders

     If you are not a U.S. Holder, you are a “Non-U.S. Holder.”

     Distributions on Our Common Shares

     You generally will not be subject to U.S. federal income tax, including withholding tax, on distributions made on our common shares unless:

• you conduct a trade or business in the United States and

• the distributions are effectively connected with the conduct of that trade or business (and, if an applicable income tax treaty so requires as a condition for you to be subject to U.S. federal income tax on a net income basis in respect of income from our common shares, such distributions are attributable to a permanent establishment that you maintain in the United States).

• If you meet the two tests above, you generally will be subject to tax in respect of such dividends in the same manner as a U.S. Holder, as described above. In addition, any effectively connected dividends received by a non-U.S. corporation may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30 percent rate or such lower rate as may be specified by an applicable income tax treaty.

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     Sale, Exchange or Other Disposition of Our Common Shares

     Generally, you will not be subject to U.S. federal income tax, including withholding tax, in respect of gain recognized on a sale or other taxable disposition of our common shares unless:

• your gain is effectively connected with a trade or business that you conduct in the United States (and, if an applicable income tax treaty so requires as a condition for you to be subject to U.S. federal income tax on a net income basis in respect of gain from the sale or other disposition of our common shares, such gain is attributable to a permanent establishment maintained by you in the United States), or

• you are an individual Non-U.S. Holder and are present in the United States for at least 183 days in the taxable year of the sale or other disposition, and certain other conditions exist.

     You will be subject to tax in respect of any gain effectively connected with your conduct of a trade or business in the United States generally in the same manner as a U.S.Holder, as described above. Effectively connected gains realized by a non-U.S. corporation may also, under certain circumstances, be subject to an additional “branch profits tax” at a rate of 30 percent or such lower rate as may be specified by an applicable income tax treaty.

     Backup Withholding and Information Reporting

     Payments, including dividends and proceeds of sales, in respect of our common shares that are made in the United States or by a United States related financial intermediary will be subject to United States information reporting rules. In addition, such payments may be subject to United States federal backup withholding tax. You will not be subject to backup withholding provided that:

• you are a corporation or other exempt recipient, or

• you provide your correct United States federal taxpayer identification number and certify, under penalties of perjury, that you are not subject to backup withholding.

     Amounts withheld under the backup withholding rules may be credited against your United States federal income tax, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner.

British Virgin Islands Tax Considerations

     Under the International Business Companies Act of the British Virgin Islands as currently in effect, a holder of common equity, such as our common shares, who is not a resident of the British Virgin Islands is exempt from British Virgin Islands income tax on dividends paid with respect to the common equity and is not liable to the British Virgin Islands for income tax on gains realized on sale or disposal of such shares. Furthermore, there are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on persons who are not residents of the British Virgin Islands. The British Virgin Islands does not impose a withholding tax on dividends paid by a company incorporated under the Business Companies Act 2004 (formerly known as International Business Companies Act).

     Our common shares are not subject to transfer taxes, stamp duties or similar charges. There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands.

Documents on Display

     Nam Tai is subject to the information requirements of the Securities and Exchange Act of 1934, and, in accordance with the Securities Exchange Act of 1934, Nam Tai. files annual reports on Form 20-F within six months of its fiscal year end, and submit other reports and information under cover of Form 6-K with the SEC. You may read and copy this information at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Recent filings and reports are also available free of charge though the EDGAR electronic filing system at www.sec.gov. You can also request copies of the documents, upon payment of a duplicating fee, by writing to the public reference section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room or accessing documents through EDGAR. As a foreign private issuer, Nam Tai is exempt from the rules under the Securities Exchange Act of 1934 prescribing the furnishing and content of proxy statements to shareholders.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Currency Fluctuations and Foreign Exchange Risk

     Beginning on December 1, 1996, the RMB became fully convertible under the current accounts. There are no restrictions on trade-related foreign exchange receipts and disbursements in China. Capital account foreign exchange receipts and disbursements are subject to control, and organizations in China are restricted in foreign currency transactions that must take place through designated banks.

     We sell a majority of our products in U.S. dollars and pay for our material components in Japanese yen, U.S. dollars, Hong Kong dollars, and RMB. We pay labor costs and overhead expenses in RMB, the currency of China (the basic unit of which is the yuan), Hong Kong dollars and Japanese yen. The exchange rate of the Hong Kong dollars to the U.S. dollars have been fixed by the Hong Kong government since 1983 at approximately HK$7.80 to US$1.00, through the currency-issuing banks in Hong Kong and, accordingly, has not in the past presented a currency exchange risk. This could change in the future if those in Hong Kong arguing for a floating currency system prevail in the ongoing debate over whether to continue to peg the Hong Kong dollars to the U.S. dollars.

     In the past, we faced a significant foreign exchange risk resulted from material purchases we made in Japanese yen. Approximately 3%, 11%, and 8% respectively, of our material costs were in Japanese yen during the years ended December 31, 2005, 2006 and 2007, respectively, and sales we made in yen only accounted for 2%, 9% and 7%, respectively, of our sales for each of the last three years. Net expenses we paid in Japanese yen when translated to U.S. dollars were not material to us during 2006 or 2007.Our business and operating results could be materially and adversely affected in the event of a severe increase in the value of the Japanese yen to the U.S. dollars at a time when our sales made in Japanese yen are insufficient to cover our material purchases in Japanese yen.

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     73% of our total non-material costs and expenses in RMB during the year ended December 31, 2007. This currency was stronger against the U.S. dollars during the year ended year ended December 31, 2007 compared to the year ended December 31, 2006 so expenses we paid in China with RMB translated into more dollars than they would have in 2006.

     Immediately prior to July 21, 2005 the exchange rate between the RMB and the U.S. dollars has varied by less than one-tenth of 1%. However, on July 21, 2005, the People’s Bank of China adjusted the exchange rate of RMB to the U.S. dollars by linking the RMB to a basket of currencies and simultaneously setting the exchange rate of RMB to U.S. dollars, from 1:8.27, to a narrow band of around 1:8.11, resulting in an approximate 2.4% appreciation in the value of the RMB against the U.S. dollars at the end of 2005, from the July 21, 2005 RMB adjustment, a 3.3% appreciation at the end of 2006 as compared to the end of 2005 and a further 6.5% appreciation at the end of 2007 as compared to the end of 2006.

     This appreciation of RMB against U.S. dollars resulted in an increase in our total costs and expenses of approximately 0.9% during 2007 based on the difference between sales versus costs and expenses incurred in RMB. If the RMB had been 1% and 5% less valuable against the U.S. dollars than the actual rate as of December 31, 2007, which was used in preparing our audited financial statements as of and for the year ended December 31, 2007, our net asset value, as presented in U.S. dollars, would have been reduced by $642,000 and $3.2 million, respectively. Conversely, if the RMB had been 1% and 5% more valuable against the U.S. dollars as of that date, then our net asset value would have increased by $642,000 and $3.2 million, respectively. Had rates of the RMB been 10% higher relative to the U.S. dollars during 2007, our operating expenses would have increased $7.3 million as a result of expenses we paid in RMB during 2007.

     Our results of operations may be negatively impacted by fluctuations in the exchange rate between the U.S. dollars and RMB. If the RMB continues to appreciate against the U.S. dollars, our operating expenses will increase and, consequently, our operating margins and net income will likely decline if we do not manufacture products that allow for greater margins than those we have experienced historically.

     We may elect to hedge our currency exchange risk when we judge that such action may be required. In an attempt to lower the costs of expenditures in foreign currencies, we may enter into forward contracts or option contracts to buy or sell foreign currency(ies) against the U.S. dollars through one of our banks. As a result, we may suffer losses resulting from the fluctuation between the buy forward exchange rate and the sell forward exchange rate, or from the price of the option premium.

     As of December 31, 2007, we held no option or future contracts and during the year and we did not purchase or sell any commodity or currency options. We are continuing to review our hedging strategy and there can be no assurance that we will not suffer losses in the future as a result of hedging activities.

     The following table provides the U.S. dollar equivalent of amounts of currencies included in cash and cash equivalents on our balance sheet at December 31, 2006 and 2007:

	Equivalent U.S. Dollar holdings at
	December 31,
	2006		2007
Currencies included in cash and cash equivalents
United States dollars		205,648,000		157,032,000
Chinese renminbi		8,552,000		56,313,000
Japanese yen		3,851,000		2,005,000
Hong Kong		3,026,000		57,095,000
Macao Patacas		7,000		14,000

Interest Rate Risk

Short-term interest rate risk

     Our interest expenses and income are sensitive to changes in interest rates. All of our cash reserves and short-term borrowings are subject to interest rate changes. Cash on hand of $272.5 million as of December 31, 2007 was invested in short-term interest-bearing investments having a maturity of three months or less. As such, interest income will fluctuate with changes in short-term interest rates. In 2007, we had $9.2 million in interest income and $0.5 million in interest expense.

     As of December 31, 2006 and 2007, we had utilized approximately $4.5 million and $4.6 million of our credit facilities, including $4.5 million and $4.6 million in short-term notes payable but no short-term bank loans, respectively, resulting in minimal interest rate risk.

Long-term interest rate risk

     As of December 31, 2007, we had $3.5 million in long-term bank borrowing, including the current portion of $2.0 million.

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     Our long-term bank borrowing consisted of a $1.6 million term loan obtained in April 2004, has a term of four years and bear interest at a rate of 0.75% over three months’ LIBOR repayable in 16 quarterly installments of $100,000 beginning July 2004. The outstanding balance as of December 31, 2007 was $0.2 million. A $3.6 million term loan obtained in June 2004 has a term of four years and bears interest at a rate of 0.75% over three months’ LIBOR repayable in 16 quarterly installments of $225,000 beginning September, 2004. The outstanding balance as of December 31, 2007 was $0.4 million. A $1.8 million term loan obtained in December 2004 has a term of four years and bears interest at a rate of 0.75% over three months’ LIBOR repayable in 16 quarterly installments of $112,500 beginning March 2005. The outstanding balance as of December 31, 2007 was $0.4 million.

     In July 2007, a $1 million loan with 3 years term obtained and bear interest at a rate of 0.55% over three months’ LIBOR repayable in 12 quarterly installments of $88,000 beginning October 2007. The outstanding balance as of December 31, 2007 was $1.0 million. A $0.5 million term loan obtained in August 2007 has a term of three years and bears interest at a rate of 0.55% over three months’ LIBOR repayable in 12 quarterly installments of $45,000 beginning November 2007. The outstanding balance as of December 31, 2007 was $0.5 million. A $1.1 million term loan obtained in September 2007 has a term of three years and bears interest at a rate of 0.55% over three months’ LIBOR repayable in 12 quarterly installments of 90,000 beginning December 2007. The outstanding balance as of December 31, 2007 was $1.0 million.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not applicable

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

     Not applicable

ITEM 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

     As of the end of the period covered by this report, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the effectiveness of the design and operation of Nam Tai’s disclosure controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report such disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Report of Management on Internal Control Over Financial Reporting

     Nam Tai’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

     Nam Tai’s management, including its Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on the assessment, Nam Tai’s management, including its Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2007, the Company’s internal control over financial reporting was effective based on these criteria.

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Attestation Report of the Registered Public Accounting Firm

     The effectiveness of internal control over financial reporting as of December 31, 2007 has been audited by Deloitte Touche Tohmatsu, an independent registered public accounting firm with a report to the Shareholders and the Board of Directors of Nam Tai as below:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT FIRM

To the shareholders and the Board of Directors of Nam Tai Electronics, Inc.:

     We have audited the internal control over financial reporting of Nam Tai Electronics, Inc. and its subsidiaries (the “Company”) as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

     A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the Untied States of America. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2007 of the Company, and our report dated March 17, 2008 expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

/s/ Deloitte Touche Tohmatsu

DELOITTE TOUCHE TOHMATSU
Certified Public Accountants
Hong Kong
March 17, 2008

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Changes in internal control over financial reporting

     There were no changes in the Company’s internal controls over financial reporting during the year ended December 31, 2007, the period covered by this Annual Report on Form 20-F, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

ITEM 16. [RESERVED]

ITEM 16 A. AUDIT COMMITTEE FINANCIAL EXPERT

     The Company’s Board of Directors has determined that one member of the Audit Committee, Mark Waslen, qualifies as an “audit committee financial expert” as defined by Item 401(h) of Regulation S-K, adopted pursuant to the Securities Exchange Act of 1934. For information concerning Mr. Waslen’s education and experience by which he acquired the attributes qualifying him as an audit committee financial expert, please see the description of Mr. Waslen’s background in Item 6. Directors and Senior Management— Directors and Senior Managers of this Report.

     Mr. Waslen is “independent” as that term is defined in the Listed Company Manual of the NYSE.

ITEM 16 B. CODE OF ETHICS

     The Company has adopted a Code of Ethics for the Chief Executive Officer and Chief Financial Officer, which also applies to the Company’s principal executive officers and to its principal financial and accounting officers. The Code of Ethics has been revised to apply to all employees as well. A copy of the revised Code of Ethics is attached as Exhibit 11.1 to this Annual Report on Form 20-F. This code has been posted on our website, which is located at http://www.namtai.com/corpgov/corpgov.htm. The contents of this website address, other than the corporate governance guidelines, the code of ethics and committee charters, are not a part of this Form 20-F. Stockholders may request a free copy in print form from:

John Farina, President and Chief Financial Officer
Eve Leung, Corporate Secretary
Unit C, 17/F, Edificio Comercial Rodrigues
599 da Avenida da Praia Grande
Macao

Telephone: (853) 2835 6333
Facsimile: (853) 2835 6262
e-mail: shareholder@namtai.com

ITEM 16 C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Deloitte Touche Tohmatsu has served as our independent registered public accounting firm for each of the fiscal years for the three-year period ended December 31, 2007, for which audited financial statements appeared in this annual report on Form 20-F. The independent registered public accounting firm is elected annually at the Annual Meeting of shareholders. The Audit Committee will propose to the Annual Meeting of Shareholders convening on June 6, 2008 that Deloitte Touche Tohmatsu be re-elected as independent registered public accounting firm of the Company for 2008.

     The following table presents the aggregate fees for professional services and other services rendered by Deloitte Touche Tohmatsu to us in 2006 and 2007.

	2006		2007
	(in thousands)
Audit Fees (1)	$	1,116	$	1,573
Audit-related Fees (2)		42		452
Tax Fees (3)		23		8
All Other Fees (4)		42		156
Total	$	1,223	$	2,189

(1)	Audit Fees consist of fees billed for the annual audit of our consolidated financial statements and the statutory financial statements of our subsidiaries. They also include fees billed for other audit services, which are those services that only the independent registered public accounting firm reasonably can provide, and include the provision of attestation services relating to the review of documents filed with the SEC.
(2)	Audit-related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements.
(3)	Tax Fees include fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refund; tax consultations, such as assistance and representation in connection with tax audits and appeals,

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	tax advice related to mergers and acquisitions, transfer pricing, and requests for rulings or technical advice from tax authorities; tax planning services; and expatriate tax compliance, consultation and planning services.
(4)	All Other Fees includes a business advisory service fee.

Audit Committee Pre-approval Policies and Procedures

     The Audit Committee of our Board of Directors is responsible, among other matters, for the oversight of the independent registered public accounting firm subject to the relevant regulations of the SEC and NYSE. The Audit Committee has adopted a policy, or the Policy, regarding pre-approval of audit and permissible non-audit services provided by our independent registered public accounting firm.

     Under the Policy, the Chairman of the Audit Committee is delegated with the authority to grant pre-approvals in respect of all auditing services including non-audit service, but excluding those services stipulated in Section 201 “Service Outsider the Scope of Practice of Auditors”. Moreover, if the Audit Committee approves an audit service within the scope of the engagement of the audit service, such audit service shall be deemed to have been pre-approved. The decisions of the Chairman of the Audit Committee made under delegated authority to pre-approve an activity shall be presented to the Audit Committee at each of its scheduled meetings.

     Requests or applications to provide services that require specific approval by the Audit Committee are submitted to the Audit Committee by both the independent registered public accounting firm and the Chief Financial Officer.

     During 2006 and 2007, approximately 59.3% and 73.3%, respectively, of the total audit-related fees, tax fees and all other fees were approved by the Audit Committee pursuant to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

ITEM 16 D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

     Not applicable

ITEM 16 E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

     Not applicable

PART III

ITEM 17. FINANCIAL STATEMENTS

     Not Applicable

ITEM 18. FINANCIAL STATEMENTS

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Statements of Income for the years ended December 31, 2005, 2006 and 2007	F-2
Consolidated Balance Sheets as of December 31, 2006 and 2007	F-3
Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the years ended December 31, 2005, 2006 and 2007	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2006 and 2007	F-5
Notes to Consolidated Financial Statements	F-7
Schedule 1 - Nam Tai Electronics, Inc. — condensed financial information as of December 31, 2006 and 2007 and for the years ended December 31, 2005, 2006 and 2007	F- 37

     The information required within the schedules for which provisions are made in the applicable accounting regulations of the Securities and Exchange Commission is either not applicable or is included in the notes to our consolidated financial statements.

84

ITEM 19. EXHIBITS

     The following exhibits are filed as part of this Annual Report:

Exhibit
No.	Exhibit
1.1	Memorandum and Articles of Association, as amended on June 26, 2003 (incorporated by reference to Exhibit 1.1 to the registrant’s Form 8-A/A filed with the Securities and Exchange Commission (“SEC”) on December 13, 2007).
4.1	Sale and Purchase Agreement dated March 9, 2006 between Nam Tai Group Management Limited, as seller, and Top Ease (H.K.) Limited, as purchaser, for the sale of the 15th Floor and car park space no. 96 on 6th Floor, China Merchants Tower, Shun Tak Centre, No. 168-200 Connaught Road Central, Hong Kong (incorporated by reference to Exhibit 4.8.1 to the registrant’s Form 20-F filed with the Securities and Exchange Commission (“SEC”) on March 19, 2007)
4.2	Assignment dated April 13, 2006 from Nam Tai Group Management Limited, as seller, to Top Ease (H.K.) Limited, as purchaser (incorporated by reference to Exhibit 4.8.2 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.3	Investment Agreement dated March 14, 2006 between Zastron Electronic (Shenzhen) Co. Ltd and Shenzhen Baoan District High and New Technology Industrial Park Development and Investment Co., Ltd. (incorporated by reference to Exhibit 4.9 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.4	Banking facilities letter dated July 17, 2006 The Hongkong and Shanghai Banking Corporation Limited to Zastron Electronic (Shenzhen) Co. Ltd. (incorporated by reference to Exhibit 4.10 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.5	Banking Facilities Letter dated July 17, 2006, The Hongkong and Shanghai Banking Corporation Limited to Jetup Electronic (Shenzhen) Co. Ltd. (incorporated by reference to Exhibit 4.11 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.6	Guaranty dated July 21, 2006 by the Company in favor of The Hongkong and Shanghai Banking Corporation Limited (incorporated by reference to Exhibit 4.12 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.7	Cooperation Agreement dated October 26, 2006 between Zastron Precision-Tech Limited and the Administration Committee of Wuxi National High and New Technology Industry Development District (incorporated by reference to Exhibit 4.13 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.8	Cooperation Agreement dated October 26, 2006 between Zastron Precision-Tech Limited and the Administration Committee of Wuxi National High and New Technology Industry Development District (incorporated by reference to Exhibit 4.14 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.9	Land Use Transfer Agreement dated December 25, 2006 between Wuxi Municipal Bureau of State Land and Resources and Zastron Precision-Tech (Wuxi) Co. Ltd. (incorporated by reference to Exhibit 4.15 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.10	Land Use Transfer Agreement dated December 31, 2006 between Wuxi Municipal Bureau of State Land and Resources and Zastron Precision-Flex (Wuxi) Co. Ltd. (incorporated by reference to Exhibit 4.16 to the registrant’s Form 20-F filed with the SEC on March 19, 2007)
4.11	2006 Stock Option Plan of Nam Tai Electronics, Inc adopted February 10, 2006 and approved on June 9, 2006 (incorporated by reference to Exhibit A attached to Exhibit 99.1 of the Form 6-K furnished to the SEC on May 15, 2006).
4.12	Amendment to 2006 Stock Option Plan (incorporated by reference to Exhibit 4.1.1 to the Company’s Registration Statement on Form S-8 File No. 333-136653 included with the Company Form 6-K furnished to the SEC on November 13, 2006).
4.13	Amended 2001 Option Plan dated July 30, 2004 (incorporated by reference to Exhibit 4.18 to the Company’s Form 20-F for the year ended December 31, 2004 filed with the SEC on March 15, 2005).
4.14	Amendment to 2001 Stock Option Plan (incorporated by reference to Exhibit 4.1.1 to the Company’s Registration Statement on Form S-8 File No. File No. 333-76940 included with Company’s Form 6-K furnished to the SEC on November 13, 2006).
4.15	Consultancy Agreement dated February 6, 2007 between Nam Tai’s subsidiary, Zastron Precision-Flex (Wuxi) Co. Ltd. and Rider Levett Buchnall Limited (formerly known as Levett and Bailey Quantity Surveyors Limited)
4.16	Supplemental Rental Agreement dated May 1, 2007 between Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co., Ltd and a local collective committee of Shenzhen Baoan District**

85

Exhibit
No.	Exhibit
4.17	Consultancy Agreement dated May 31, 2007 between Nam Tai’s subsidiary, Zastron Precision-Tech Limited and the Hong Kong Productivity Council
4.18	Banking Facilities Letter dated June 7, 2007 between Nam Tai’s subsidiary, Namtai Electronic (Shenzhen) Co., Ltd. and HSBC Bank (China) Company Limited
4.19	Guaranty dated June 7, 2007 by Nam Tai’s subsidiary, Nam Tai Electronic & Electrical Products Limited signed a guarantee in favor of HSBC Bank (China) Company Limited
4.20	Banking Facilities Letter dated June 7, 2007 between Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd. and HSBC Bank (China) Company Limited
4.21	Banking Facilities Letter dated June 7, 2007 between Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co. Ltd. and HSBC Bank (China) Company Limited
4.22	Guaranty dated June 7, 2007 by Nam Tai’s subsidiary, J.I.C. Technology Company Limited in favor of HSBC Bank (China) Company Limited with maximum liability of approximately $14.1 million (i.e.HK$110,000,000) for the banking facilities of Jetup Electronic (Shenzhen) Co., Ltd. This guarantee was terminated on December 31, 2007 and replaced by a new Guarantee by Nam Tai Electronic & Electrical Products Limited with same terms and conditions as a part of Nam Tai’s 2007 Reorganization
4.23	Guaranty dated June 22, 2007 by Nam Tai in favor of HSBC Bank (China) Company Limited. This guarantee was terminated on December 31, 2007 and replaced by a new guarantee signed by Nam Tai Electronic & Electrical Products Limited with same terms and conditions as a part of Nam Tai’s reorganization.
4.24	Assignment dated June 30, 2007 by Shenzhen Municipal Bureau of State Land and Resources pursuant to Land Use Transfer Agreement and Supplemental Agreement of the land use right of No. A614-0377 Plot located in Shenzhen Guangming Hi-Tech Industrial Park to Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd.**
4.25	Summary of Design Consultancy Agreement dated July 30, 2007 by Zastron Precision - -Tech Limited, a company incorporated under the laws of the Cayman Island and Parsons Brinckerhoff (Asia) Ltd, a company incorporated under the laws of the Hong Kong SAR*
4.26	Summary of Project Management Agreement dated July 30, 2007 by Zastron Precision-Flex (Wuxi) Company Limited, a company incorporated under the laws of the PRC; and (2) Parsons Brinckerhoff Constructors (Shanghai) Company Limited , a company incorporated under the laws of the PRC.*
4.27	Supplemental Loan Agreement dated September 5, 2007, between Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd**
4.28	Supplemental Loan Agreement dated September 5, 2007, between Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd**
4.29	Supplemental Loan Agreement dated September 5, 2007, between Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd**
4.30	Supplemental Loan Agreement dated September 5, 2007, between Nam Tai’s two subsidiaries, Zastron Precision —Tech Limited and Zastron Electronic (Shenzhen) Co. Ltd**
4.31	Sales and Purchase Agreement dated September 24, 2007, between Nam Tai and its subsidiary, J.I.C. Technology Company Limited
4.32	Sales and Purchase Agreement dated September 24, 2007, between Nam Tai and its subsidiary, Nam Tai Electronic & Electrical Products Limited
4.33	Supplemental Sales and Purchase Agreement dated October 5, 2007, between Nam Tai and its subsidiary, J.I.C. Technology Company Limited
4.34	Sales and Purchase Agreement dated October 5, 2007, between Nam Tai’s two subsidiaries Nam Tai Electronic & Electrical Products Limited and J.I.C. Technology Company Limited
4.35	External Loan Agreement Agreement dated November 6, 2007, between Nam Tai’s two subsidiaries, J.I.C. Technology Company Limited and Jetup Electronic (Shenzhen) Co. Ltd**
4.36	External Loan Agreement dated November 15, 2007, between Nam Tai’s two subsidiaries, J.I.C. Technology Company Limited and Jetup Electronic (Shenzhen) Co. Ltd.**
4.37	Supplemental Sales and Purchase Agreement dated November 28, 2007, between Nam Tai and its subsidiary, J.I.C. Technology Company Limited
4.38	Supplemental Sales and Purchase Agreement dated November 28, 2007, between Nam Tai’s two subsidiaries Nam Tai Electronic & Electrical Products Limited and J.I.C. Technology Company Limited

86

Exhibit
No.	Exhibit
4.39	Supplemental Sales and Purchase Agreement dated November 28, 2007, between Nam Tai and its subsidiary, JIC Technology Company Limited
4.40	Professional Service Agreement, SAP Software End-User Value License Agreement dated November 30, 2007, between Nam Tai’s subsidiary, Zastron Precision-Tech Limited and SAP Hong Kong Co. Limited
4.41	Sales and Purchase Agreement dated November 30, 2007, between Nam Tai’s two subsidiaries Nam Tai Electronic & Electrical Products Limited and Best Whole Holdings Limited**
4.42	Sales and Purchase Agreement dated November 30, 2007, between Nam Tai’s two subsidiaries J.I.C. Technology Company Limited and Top Eastern Investment Limited**
4.43	Letter of Commitment dated December 18, 2007, between Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd. and Shenzhen Baoan District High and New Technology Industrial Park Development Committee**
4.44	Loan Agreement dated December 28, 2007, between Nam Tai’s two subsidiaries, Nam Tai Electronic & Electrical Product Limited and Top Eastern Investment Limited
4.45	Deed of Assignment Agreement dated December 31, 2007, between Nam Tai’s three subsidiaries, J.I.C. Technology Company Limited, Top Eastern Investment Limited and Jetup Electronic (Shenzhen) Co. Ltd.
4.46	Deed of Release Agreement dated December 31, 2007, between Nam Tai’s two subsidiaries, J.I.C. Technology Company Limited and Top Eastern Investment Limited
4.47	Deed of Release Agreement dated December 31, 2007, between Nam Tai’s two subsidiaries, Nam Tai Electronic & Electrical Products Limited and Best Whole Holdings Limited
4.48	Banking Facilities Letter Agreement dated January 2, 2008, between Nam Tai’s subsidiary, Jetup Electronic (Shenzhen) Co., Ltd. and HSBC Bank (China) Company Limited
4.49	Guaranty dated December 31, 2007, by Nam Tai’s subsidiary, Nam Tai Electronic & Electrical Products Limited in favor of HSBC Bank (China) Company Limited
4.50	Banking Facilities Letter dated January 2, 2008, between Nam Tai’s subsidiary, Zastron Electronic (Shenzhen) Co. Ltd and HSBC Bank (China) Company Limited
4.51	Guaranty dated December 31, 2007, by Nam Tai Electronics & Electrical Products Limited in favor of HSBC Bank (China) Company Limited
4.52	Banking Facilities Letter dated December 31, 2007 among Nam Tai’s subsidiaries, Nam Tai Electronics & Electrical Products Limited and Jetup Electronic (Shenzhen) Co. Ltd. and Shanghai Commercial Bank Ltd**
4.53	Exclusivity Agreement dated February 6, 2008 between Hong Kong Energy (Holdings) Limited and Nam Tai relating to the potential sale of Nam Tai’s entire equity interest in JIC.
4.54	Share Purchase Agreement dated February 26, 2008 between Nam Tai as the Vendor, and HKC (Holdings) Limited as the Purchaser relating to Nam Tai’s entire equity interest in JIC
8.1	Diagram of Company’s subsidiaries. See the Section headed “Organization Structure” under Item 4 of this Report at page 36.
11.1	Code of Ethics (incorporated by reference to Exhibit 14.1 to the Company’s Form 20-F for the year ended December 31, 2004 filed with the SEC on March 15, 2005)
12.1	Certification pursuant to Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2	Certification pursuant to Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
25.1	Consent of Deloitte Touche Tohmatsu.

*	The agreement is written in Chinese and a Summary is provided in accordance with Form 20-F Instructions to Exhibits and Rule 12b-12(d) under the Exchange Act).
**	The agreement is written in Chinese and an English Translation is provided in accordance with Form 20-F Instructions to Exhibits and Rule 12b-12(d) under the Exchange Act).

87

SIGNATURE

     Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf.

NAM TAI ELECTRONICS, INC.
By:	/s/ John Q. Farina
	John Q. Farina
	President and Chief Financial Officer

Date: March  17, 2008

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Nam Tai Electronics, Inc.:

We have audited the accompanying consolidated balance sheets of Nam Tai Electronics, Inc. and subsidiaries (the “Company”) as of December 31, 2006 and 2007, and the related consolidated statements of income, shareholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2007 and the related schedule included in Schedule 1. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule, based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2006 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as whole, presents fairly, in all material respects the information set forth therein.

We have also audited, in accordance with the standards of the PCAOB, the Company’s internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2008 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/Deloitte Touche Tohmatsu

DELOITTE TOUCHE TOHMATSU
Certified Public Accountants
Hong Kong
March 17, 2008

F-1

NAM TAI ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US dollars, except per share data)

	Year ended December 31,
	2005			2006			2007
Net sales — third parties	$	791,042		$	870,174		$	780,822
Net sales — related party		6,195			—			—
Total net sales		797,237			870,174			780,822
Cost of sales		(704,314	)		(783,953	)		(693,804	)
Gross profit		92,923			86,221			87,018
Gain on disposal of asset held for sale		—			9,258			—
Selling, general and administrative expenses		(33,057	)		(30,668	)		(36,550	)
Research and development expenses		(7,210	)		(7,866	)		(9,798	)
Losses arising from the judgment to reinstate redeemed shares		—			(14,465	)		—
Total operating expenses		(40,267	)		(52,999	)		(46,348	)
Income from operations		52,656			42,480			40,670
Other (expenses) income, net		(125	)		(1,265	)		2,219
Dividend income received from marketable securities and investment		579			—			—
Gain on sales of subsidiaries’ shares		10,095			—			390
Gain on disposal of an affiliated company		3,631			—			—
(Loss) gain on disposal of marketable securities		(3,686	)		—			43,815
Loss on marketable securities arising from split share structure reform		—			(1,869	)		—
Impairment loss on marketable securities		(6,525	)		—			—
Interest income		3,948			8,542			9,163
Interest expense		(438	)		(602	)		(452	)
Income before income taxes and minority interests		60,135			47,286			95,805
Income taxes		(651	)		(377	)		(4,030	)
Income before minority interests and equity in loss of an affiliated company		59,484			46,909			91,775
Minority interests		(7,992	)		(6,153	)		(22,272	)
Equity in loss of an affiliated company		(186	)		—			—
Net income	$	51,306		$	40,756		$	69,503
Basic earnings per share	$	1.19		$	0.93		$	1.56
Diluted earnings per share	$	1.19		$	0.93		$	1.55

See accompanying notes to consolidated financial statements.

F-2

NAM TAI ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars, except share data)

	December 31,
	2006		2007
ASSETS
Current assets:
Cash and cash equivalents	$	221,084	$	272,459
Marketable securities		24,360		—
Accounts receivable, less allowance for doubtful accounts of $152 and $53 at December 31, 2006 and 2007, respectively		117,561		95,802
Inventories		30,894		32,356
Prepaid expenses and other receivables		2,503		5,803
Income taxes recoverable		4,316		5,483
Deferred tax assets — current		—		54
Total current assets		400,718		411,957
Property, plant and equipment, net		102,721		94,669
Land use right		2,673		3,930
Deposits for property, plant and equipment		609		536
Prepayment for land use right		2,880		9,019
Goodwill		18,476		20,296
Deferred tax assets — non-current		—		3,192
Other assets		1,158		1,219
Total assets	$	529,235	$	544,818
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	4,516	$	4,580
Long term bank loans — current portion		1,750		1,990
Accounts payable		125,893		107,326
Accrued expenses and other payables		13,649		21,690
Dividend payable		16,639		9,509
Income taxes payable		166		556
Total current liabilities		162,613		145,651
Long tem bank loans — non-current portion		1,100		1,558
Total liabilities		163,713		147,209
Minority interests		48,428		67,428
Commitments and contingencies (Note 15)
Shareholders’ equity:
Common shares ($0.01 par value — authorized 200,000,000 shares)		438		448
Reinstatement of redeemed shares		17,159		—
Additional paid-in capital		264,393		281,895
Retained earnings		25,030		47,846
Accumulated other comprehensive income (loss)		10,074		(8	)
Total shareholders’ equity		317,094		330,181
Total liabilities and shareholders’ equity	$	529,235	$	544,818

See accompanying notes to consolidated financial statements.

F-3

NAM TAI ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
(In thousands of US dollars, except share and per share data)

													Accumulated			Total
	Common		Common		Reinstatement			Additional					Other			Share-
	Shares		Shares		of redeemed			Paid-in		Retained			Comprehensive			holders’			Comprehensive
	Outstanding		Amount		shares			Capital		Earnings			Income (Loss)			Equity			Income
Balance at January 1, 2005		42,664,536	$	426	$	—		$	241,756	$	56,324		$	6,547		$	305,053
Shares issued on exercise of options		841,050		9		—			16,411		—			—			16,420
Net income		—		—		—			—		51,306			—			51,306		$	51,306
Unrealized loss of marketable securities		—		—		—			—		—			(5,352	)		(5,352	)		(5,352	)
Realization of loss upon disposals of marketable securities		—		—		—			—		—			(250	)		(250	)		(250	)
Foreign currency translation		—		—		—			—		—			73			73			73
Comprehensive income																			$	45,777
Cash dividends ($1.32 per share)		—		—		—			—		(56,859	)		—			(56,859	)
Balance at December 31, 2005		43,505,586	$	435	$	—		$	258,167	$	50,771		$	1,018		$	310,391
Shares issued on exercise of options		281,000		3		—			5,436		—			—			5,439
Equity-settled share-based payment		—		—		—			790		—			—			790
Reinstatement of redeemed shares (note 9(e))		—		—		17,159			—		—			—			17,159
Net income		—		—		—			—		40,756			—			40,756		$	40,756
Unrealized gain of marketable securities		—		—		—			—		—			8,983			8,983			8,983
Foreign currency translation		—		—		—			—		—			73			73			73
Comprehensive income																			$	49,812
Cash dividends ($1.52 per share)		—		—		—			—		(66,497	)		—			(66,497	)
Balance at December 31, 2006		43,786,586	$	438	$	17,159		$	264,393	$	25,030		$	10,074		$	317,094
Reinstatement of redeemed shares		1,017,149		10		(17,159	)		17,149		—			—			—
Equity-settled share-based payment		—		—		—			353		—			—			353
Net income		—		—		—			—		69,503			—			69,503		$	69,503
Unrealized gain of marketable securities		—		—		—			—		—			17,451			17,451			17,451
Disposal of marketable securities		—		—		—			—		—			(27,381	)		(27,381	)		(27,381	)
Foreign currency translation		—		—		—			—		—			(152	)		(152	)		(152	)
Reserve shared by minority interests		—		—		—			—		(9,052	)		—			(9,052	)		(9,052	)
Comprehensive income																			$	50,369
Cash dividends ($0.84 per share)		—		—		—			—		(37,635	)		—			(37,635	)
Balance at December 31, 2007		44,803,735	$	448	$	—		$	281,895	$	47,846		$	(8	)	$	330,181

See accompanying notes to consolidated financial statements.

F-4

NAM TAI ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)

	Year ended December 31,
	2005			2006			2007
Cash flows from operating activities:
Net income	$	51,306		$	40,756		$	69,503
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment		16,824			19,024			21,501
Amortization and impairment loss of intangible assets		459			—			—
Gain on disposal of property, plant and equipment		(563	)		(317	)		(66	)
Gain on disposal of assets held for sale		—			(9,258	)		—
Loss on marketable securities arising from split share structure reform		—			1,869			—
Loss arising from the judgment to reinstate redeemed shares		—			14,465			—
Impairment loss on marketable securities — TCL Communication Technology Holdings Limited (“TCL Communication”)		6,525			—			—
Loss (gain) on disposal of marketable securities		3,686			—			(43,815	)
Gain on disposal of an affiliated company		(3,631	)		—			—
Gain on sale of a subsidiary’s shares — Nam Tai Electronic & Electrical Products Limited (“NTEEP”)		(8,165	)		—			(325	)
Gain on sale of a subsidiary’s shares — J.I.C. Technology Company Limited (“JIC Technology”)		—			—			(65	)
Gain on sale of a subsidiary’s shares — Namtek Software Development Company Limited (“Namtek Software”)		(1,930	)		—			—
Share-based compensation expenses		—			873			389
Equity in loss of an affiliated company less dividend received		186			—			—
Others		206			(931	)		(813	)
Deferred income taxes		—			—			(3,246	)
Minority interests		7,992			6,153			22,272
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable		(35,300	)		8,101			21,704
Decrease in amount due from a related party		66			—			—
(Increase) decrease in inventories		(8,648	)		850			(1,462	)
Decrease (increase) in prepaid expenses and other receivables		377			(1,013	)		(3,303	)
Decrease (increase) in income taxes recoverable		3,895			(1,645	)		(1,167	)
Increase (decrease) in notes payable		2,733			(297	)		79
Increase (decrease) in accounts payable		32,038			4,285			(18,567	)
Increase (decrease) in accrued expenses and other payables		2,786			(3,104	)		8,041
(Decrease) increase in income taxes payable		(17	)		—			390
Total adjustments		19,519			39,055			1,547
Net cash provided by operating activities	$	70,825		$	79,811		$	71,050

F-5

NAM TAI ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)

	Year ended December 31,
	2005			2006			2007
Cash flows from investing activities:
Purchase of property, plant and equipment	$	(32,166	)	$	(23,793	)	$	(13,785	)
Decrease in deposits for property, plant and equipment		6,451			641			73
Increase in prepayment for land use rights		—			(2,880	)		(7,532	)
Proceeds from disposal of assets held for sale		—			20,170			—
(Increase) decrease in other assets		(40	)		142			(61	)
Proceeds from disposal of marketable securities		—			—			53,914
Proceeds from disposal of an affiliated company — Alpha Star Investments Limited (“Alpha Star”)		6,494			—			—
Proceeds from disposal of marketable securities — TCL Communication		10,995			—			—
Acquisition of additional shares in subsidiaries		—			(3,130	)		(13,808	)
Proceeds from partial disposal of subsidiaries — JIC Technology and NTEEP		25,218			—			7,287
Proceeds from disposal of property, plant and equipment		1,788			420			522
Net cash provided by (used in) investing activities		18,740			(8,430	)		26,610
Cash flows from financing activities:
Cash dividends paid		(51,984	)		(65,923	)		(47,796	)
Repayment of bank loans		(5,375	)		(8,067	)		(1,972	)
Proceeds from bank loans		4,774			3,480			2,670
Proceeds from shares issued on exercise of options		16,420			5,439			—
Net cash used in financing activities		(36,165	)		(65,071	)		(47,098	)
Net increase in cash and cash equivalents		53,400			6,310			50,562
Cash and cash equivalents at beginning of year		160,649			213,843			221,084
Effect of exchange rate changes on cash and cash equivalents		(206	)		931			813
Cash and cash equivalents at end of year	$	213,843		$	221,084		$	272,459
Supplemental schedule of cash flow information:
Interest paid	$	438		$	602		$	452
Income taxes (received) paid, net		(3,335	)		(1,904	)		7,697

See accompanying notes to consolidated financial statements.

F-6

NAM TAI ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US dollars, except share and per share data)

1.	Company Information
	Nam Tai Electronics, Inc. and subsidiaries (the “Company” or “Nam Tai”) is an electronics manufacturing and design services provider to a selected group of the world’s leading original equipment manufacturers, or OEMs, of telecommunication and consumer electronic products. Through its electronics manufacturing services operations, the Company manufactures electronic components and sub-assemblies, including liquid crystal display (“LCD”) panels, LCD modules, radio frequency modules, flexible printed circuit sub-assemblies, digital audio broadcast modules, image sensors modules and printed circuit board assembles for headsets containing Bluetooth wireless technology. These components are used in numerous electronic products, including mobile phones, laptop computers, digital cameras, electronic toys and handheld video game devices. The Company also manufactures finished products, including entertainment devices, mobile phone accessories and educational products.
	The Company was founded in 1975 and moved its manufacturing facilities to the People’s Republic of China (the “PRC”) in 1980 to take advantage of lower overhead costs, lower material costs and competitive labor rates available and subsequently relocated to Shenzhen, the PRC in order to capitalize on opportunities offered in Southern China. The Company was reincorporated as a limited liability International Business Company under the laws of the British Virgin Islands (“BVI”) in August 1987. The Company’s principal manufacturing and design operations are based in Shenzhen, approximately 30 miles from the Hong Kong Special Administrative Region (“Hong Kong”). Its PRC headquarters are located in the Macao Special Administrative Region (“Macao”). Some of the subsidiaries’ offices are located in Macao and Hong Kong, which provide it access to Macao’s and Hong Kong’s infrastructure of communication and banking facilities. As of December 31, 2007, one of the Company’s subsidiaries also maintained an office in Japan. The Company’s principal manufacturing operations are conducted in the PRC. The PRC resumed sovereignty over Hong Kong and Macao effective July 1, 1997 and December 20, 1999, respectively, and politically, Hong Kong and Macao are integral parts of China. However, for simplicity and as a matter of definition only, our references to PRC in these consolidated financial statements means the PRC and all of its territories excluding Hong Kong and Macao.
	The Company operates primarily in three reportable segments consisting of consumer electronics and communication products (“CECP”), telecommunication components assembly (“TCA”) and LCD products (“LCDP”).
2.	Summary of Significant Accounting Policies

(a)	Principles of consolidation
	The consolidated financial statements include the financial statements of the Company and all of its subsidiaries. The Company consolidates companies in which it has controlling interest of over 50%. All significant intercompany accounts, transactions and cash flows have been eliminated on consolidation.
	The equity method of accounting is used when the Company has the ability to exercise significant influence over the operating and financial policies of an investee, which is normally indicated by a 20% to 50% interest in other entities. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities and distributions received, if any.
(b)	Cash and cash equivalents
	Cash and cash equivalents include all cash balances and certificates of deposit having a maturity date of three months or less upon acquisition.
(c)	Marketable securities
	Marketable securities are principally equity securities and are classified as available-for-sale. Securities classified as available-for-sale are stated at fair value with unrealized gains and losses recorded as a separate component of accumulated other comprehensive income (loss). Realized gains and losses on the sale of the available-for-sale securities are determined using the specific-identification method and are reflected in other income (expenses).

F-7

2. Summary of Significant Accounting Policies — continued

(d)	Inventories
	Inventories are stated at the lower of cost or market value. Cost is determined on the first-in, first-out basis. Write down of potentially obsolete or slow-moving inventory are recorded based on management’s analysis of inventory levels.
	For the Company’s CECP and TCA reporting units, the Company orders inventory from its suppliers based on firm customer orders for products that are unique to each customer. The inventory is utilized in production as soon as all the necessary components are received. The only reason that inventory would not be utilized within six months is if a specific customer deferred or cancelled an order. As the inventory is typically unique to each customer’s products, it is unusual for the Company to be able to utilize the inventory for other customers’ products. Therefore, the Company’s policy is to negotiate with the customer for the disposal of such inventory that remains unused for six months. The Company does not generally write down its inventories as usually, the customers are held to their purchase commitments. However, there are cases where customers are contractually obligated to purchase the unused inventory from the Company, but the Company may elect not to immediately enforce such contractual right for business reasons. In this connection, the Company will consider writing down these inventory items which remained unused for over six months at the Company’s own cost. Prior to writing down, management would determine if the inventory can be utilized in other products.
	For the Company’s LCDP segment, due to the nature of the business, LCDP customers do not always place orders advance enough to enable the Company to order inventory from suppliers based on firm customer orders. Nonetheless, management reviews its inventory balance on a regular basis and writes down all inventory over six months old if it is determined that the relevant inventory can not be utilized in the foreseeable future.
(e)	Property, plant and equipment and land use right
	Property, plant and equipment and land use right are recorded at cost and include interest on funds borrowed to finance construction, if applicable. No interest was capitalized for the years ended December 31, 2005, 2006 and 2007. The cost of major improvements and betterments is capitalized whereas the cost of maintenance and repairs is expensed in the year incurred. Assets under construction are not depreciated until construction is completed and the assets are ready for their intended use. Gains and losses for the disposal of property, plant and equipment and land use right are included in income.
	The majority of the land in Hong Kong is owned by the government of Hong Kong which leases the land at public auction to non-governmental entities. All of the Company’s leasehold land in Hong Kong has leases of not more than 50 years from the respective balance sheet dates. The cost of such leasehold land is amortized on a straight-line basis over the respective terms of the leases.
	All land in other regions of the PRC is owned by the PRC government. The government in the PRC, according to PRC law, may sell the right to use the land for a specified period of time. Thus, all of the Company’s land purchases in the PRC are considered to be leasehold land and classified as land use right. They are amortized on a straight-line basis over the respective term of the right to use the land.
	Depreciation rates computed using the straight-line method are as follows:

Classification	Years
Land use right	50 years
Buildings	20 to 50 years
Machinery and equipment	4 to 12 years
Leasehold improvements	3 to 7 years
Furniture and fixtures	4 to 8 years
Automobiles	4 to 6 years
Tools and molds	4 to 6 years

F-8

2. Summary of Significant Accounting Policies — continued

(f)	Goodwill and intangible assets
	The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheet as goodwill.
	Goodwill is not amortized, but is tested for impairment at the reporting unit level on at least an annual basis at the balance sheet date. The Company operated in three reporting units, which were its reportable segments of CECP, TCA and LCDP.
	The evaluation of goodwill for impairment involves two steps: (1) the identification of potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill and (2) the measurement of the amount of goodwill loss by comparing the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill and recognizing a loss by the excess of the latter over the former. For assessment of impairment loss, the Company will measure fair value based either on internal models or independent valuations. No impairment loss of goodwill was identified in 2005, 2006 and 2007.
(g)	Impairment or disposal of long-lived assets
	Long-lived assets are included in impairment evaluations when events and circumstances exist that indicate the carrying amount of these assets may not be recoverable. The Company reviews its long-lived assets for potential impairment based on a review of projected undiscounted cash flows associated with these assets. Measurement of impairment losses for long-lived assets that the Company expects to hold and use is based on the estimated fair value of the assets.
	Long-lived assets to be disposed of are stated at the lower of fair value or carrying amount. Expected future operating losses from discontinued operations are recorded in the periods in which the losses are incurred.
(h)	Revenue recognition
	The Company recognizes revenue when all of the following conditions are met:

• Persuasive evidence of an arrangement exists,

• Delivery has occurred or services have been rendered,

• Price to the customer is fixed or determinable, and

• Collectibility is reasonably assured.

Revenue from sales of products is recognized when the title is passed to customers upon shipment and when collectibility is assured. The Company does not provide its customers with the right of return (except for quality), price protection, rebates or discounts. There are no customer acceptance provisions associated with the Company’s products, except for quality. All sales are based on firm customer orders with fixed terms and conditions, which generally cannot be modified.

Certain of the Company’s subsidiaries are subject to value-added tax of 17% on the revenue earned for goods and services sold in the PRC. The Group presents revenue net of such value-added tax which amounted to $4,406, $99 and nil for the years ended December 31, 2005, 2006 and 2007, respectively.

F-9

2. Summary of Significant Accounting Policies — continued

(i)	Shipping and handling costs
	Shipping and handling costs are classified as to cost of sales for material purchased and selling expenses for those costs incurred in the delivery of finished products. During the years ended December 31, 2005, 2006, and 2007, shipping and handling costs classified as costs of sales were $561, $593 and $523, respectively. During the years ended December 31, 2005, 2006 and 2007, shipping and handing costs classified as selling expenses were $847, $910 and $1,027, respectively.
(j)	Research and development costs
	Research and development costs are incurred in the development of new products and processes, including significant improvements and refinements to existing products and are expensed as incurred.
(k)	Advertising expenses
	The Company expenses advertising costs as incurred. Advertising expenses were $377, $127 and $137 for the years ended December 31, 2005, 2006 and 2007, respectively.
(l)	Staff retirement plan costs
	The Company’s costs related to the staff retirement plans (see note 11) are charged to the consolidated statement of income as incurred.
(m)	Income taxes
	For the years ended December 31, 2005 and 2006, PRC tax paid by subsidiaries operating in the PRC during the year was recorded as an amount recoverable at the balance sheet date when management had filed or had the definite intention to file an application for reinvestment of profits and a refund was expected unless there was an indication from the PRC tax authority that the refund, or a portion of which, would be refused. For the year ended December 31, 2007, tax refund for reinvestment of profits under the capital reinvestment scheme may be removed under the new income tax law in the PRC and therefore the PRC tax paid by subsidiaries operating in the PRC during the year ended December 31, 2007 is expensed.
	Deferred income taxes are provided using the asset and liability method. Under this method, deferred income taxes are recognized for all significant temporary differences at enacted rates and classified as current or non-current based upon the classification of the related asset or liability in the financial statements. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all, the deferred tax asset will not be realized.
	Effective January 1, 2007, the Company adopted the Financial Accounting Standard Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides accounting guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There is no material impact of FIN 48 on the Company’s consolidated financial statements.

F-10

2. Summary of Significant Accounting Policies — continued

(n)	Foreign currency transactions and translations
	All transactions in currencies other than functional currencies during the year are translated at the exchange rates prevailing on the respective transaction dates. Monetary assets and liabilities existing at the balance sheet date denominated in currencies other than functional currencies are re-measured at the exchange rates existing on that date. Exchange differences are recorded in the consolidated statement of income.
	The functional currencies of the Company and its subsidiaries include the U.S. dollar or the Hong Kong dollar. The financial statements of all subsidiaries with functional currencies other than the U.S. dollar, the reporting currency, are translated in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 52, “Foreign Currency Translation”. All assets and liabilities are translated at the rates of exchange ruling at the balance sheet date and all income and expense items are translated at the average rates of exchange over the year. All exchange differences arising from the translation of subsidiaries’ financial statements are recorded as a component of comprehensive income.
	The exchange rates between the Hong Kong dollar and the U.S. dollar were approximately 7.7546, 7.7747 and 7.7998 as of December 31, 2005, 2006 and 2007, respectively.
(o)	Earnings per share
	Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year.
	Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the year. The weighted average number of common shares outstanding is adjusted to include the number of additional common share that would have been outstanding if the dilutive potential common shares had been issued.
(p)	Stock options
	The Company has a stock-based employee compensation plan, as more fully described in note 9(b). Prior to 2006, the Company did not recognize compensation expense for employee stock-based compensation if the strike-price is equal to or greater than the market price of the stock at the date of grant. The Company’s policy is to generally grant stock-based compensation to employees with a stock price equal to the market price of the stock on the date of grant. Prior to 2006, the Company accounted for stock-based compensation arrangements under Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” and provided additional financial statement disclosure in accordance with SFAS No. 123, “Accounting for Stock-Based Compensation". However, the Company would recognize compensation expense for all stock-based compensation granted to non-employees by estimating the fair value of the stock-based compensation utilizing the Black-Scholes option-pricing model. See note 9.
	The following table illustrates the effect on net income and earnings per share as if the Company had applied the fair value recognition in year 2005

Year ended December 31, 2005
Net income, as reported		$	51,306
Less: Stock-based compensation costs under fair value based method for all awards			(7,500	)
Net income, pro forma		$	43,806
Basic earnings per share	As reported	$	1.19
	Pro forma	$	1.02
Diluted earnings per share	As reported	$	1.19
	Pro forma	$	1.01

F-11

2. Summary of Significant Accounting Policies — continued

(p)	Stock options — continued
	The Company has adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”) in 2006. This statement is a revision to SFAS No. 123 and supersedes APB Opinion No. 25. This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily focusing on the accounting for transactions in which an entity obtains employee services in share-based payment transactions. Entities are required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service, the requisite service period (usually the vesting period), in exchange for the award. The grant-date fair value of employee share options and similar instruments are to be estimated using option-pricing models. If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.
	Upon adoption, the Company applied the modified-prospective transition approach. Under the modified-prospective transition method the Company would be required to recognize compensation cost for share-based awards to employees based on their grant-date fair value from the beginning of the fiscal period in which the recognition provisions are first applied as well as compensation cost for awards that were granted prior to, but not vested as of the date of adoption. Prior periods remain unchanged and pro forma disclosures previously required by SFAS No. 123 continue to be required.
(q)	Use of estimates
	The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(r)	Comprehensive income
	Accumulated other comprehensive income (loss) represents principally unrealized gains on marketable securities and foreign currency translation adjustments and is included in the consolidated statement of shareholders’ equity.
(s)	Fair value disclosures
	The carrying amounts of cash and cash equivalents, accounts receivable, other receivables, income taxes recoverable, notes payable, short-term bank loans, accounts payable, accrued expenses and other payables approximate their fair values due to the short term nature of these instruments. The carrying amount of long term debt also approximates fair value due to the variable nature of the interest calculations.

F-12

2. Summary of Significant Accounting Policies — continued

(t)	Recent changes in accounting standards
	In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement”. SFAS No. 157 addresses standardizing the measurement of fair value for companies who are required to use a fair value measure for recognition or disclosure purposes. The FASB defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is evaluating the impact, if any, of the adoption of SFAS No. 157. It is not expected to have a material impact on the Company’s financial position, results of operations and cash flows.
	In February 2007, the FASB issued SFAS No. 159, “The Fair Value Options for Financial Assets and Financial Liabilities". SFAS No. 159 permits an entity, on a contract-by-contract basis, to make an irrevocable election to account for certain types of financial instruments and warranty and insurance contracts at fair value, rather than historical cost, with changes in the fair value, whether realized or unrealized, recognized in earnings. SFAS No. 159 is effective for financial year beginning on or after November 15, 2007. The Company is evaluating the impact, if any, of the adoption of SFAS No. 159. It is not expected to have a material impact on the Company’s financial position, results of operations and cash flows.
	In June 2007, the Emerging Issues Task Force (“EITF”) of FASB ratified EITF Issue 06-11 “Accounting for the Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF 06-11”). EITF 06-11 provides that tax benefits associated with dividends on share-based payment awards be recorded as a component of additional paid-in capital. EITF 06-11 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007. The Company is currently assessing the impact of EITF 06-11 on its consolidated financial position and results of operations.
	In 2007, the EITF of FASB issued EITF Issue 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (“EITF 07-3”). EITF reached a consensus that nonrefundable advance payments to acquire goods or pay for services that will be consumed or performed in a future period in conducting research and development activities on behalf of the entity should be recorded as an asset when the advance payments are made. Capitalized amounts should be recognized as expense when the related goods are delivered or services are performed, that is, when the goods without alternative future use are acquired or the service is rendered. EITF 07-3 is effective for fiscal years beginning after December 15, 2007. The Company is evaluating the impact, if any, of the adoption of EITF 07-3. It is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
	In December 2007, FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141R”). The objective of SFAS No. 141R is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. SFAS No. 141R is effective for financial statements issued for fiscal years beginning on or after December 15, 2008. The Company is evaluating the impact, if any, of the adoption of SFAS No. 141R. It is not expected to have a material impact on the Company’s financial position, results of operations and cash flows.
	In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in Consolidated Financial Statements”. SFAS No. 160 amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements”, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 defines “a noncontrolling interest, sometimes called a minority interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent”. The objective of SFAS No. 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is evaluating the impact, if any, of the adoption of SFAS No. 160.

F-13

3.	Inventories
	Inventories consist of the following:

At December 31,	2006		2007
Raw materials	$	24,800	$	25,262
Work-in-progress		4,753		3,715
Finished goods		1,341		3,379
	$	30,894	$	32,356

4.	Property, Plant and Equipment, net
	Property, plant and equipment, net consist of the following:

At December 31,	2006			2007
At cost:
Buildings	$	49,929		$	50,266
Machinery and equipment		106,120			121,009
Leasehold improvements		23,798			27,503
Furniture and fixtures		2,095			2,513
Automobiles		1,274			1,199
Tools and molds		145			178
Total		183,361			202,668
Less: accumulated depreciation and amortization		(88,399	)		(108,682	)
Construction in progress		7,759			683
Net book value	$	102,721		$	94,669

	As at December 31, 2007, the Company has entered into commitments for capital expenditure for property, plant and equipment of approximately $3,116, which are expected to be disbursed during the year ending December 31, 2008.
5.	Goodwill
	Goodwill consists of the following:

	CECP			LCDP
	reporting			reporting
	unit			unit			Total
Balance at January 1, 2006	$	1,232		$	15,836		$	17,068
Goodwill upon acquisition of additional 3.31% interest in JIC Technology		—			1,408			1,408
Balance at December 31, 2006	$	1,232		$	17,244		$	18,476
Exchange difference		—			(6	)		(6	)
Goodwill upon acquisition of additional 1.46% interest in JIC Technology		—			417			417
Goodwill upon acquisition additional 6.18% interest in NTEEP		1,853			—			1,853
Goodwill release related to disposal of 1.41% interest in JIC Technology		—			(310	)		(310	)
Goodwill release related to disposal of 3.31% interest in NTEEP		(134	)		—			(134	)
Balance at December 31, 2007	$	2,951		$	17,345		$	20,296

No impairment loss was identified in 2006 and 2007.

F-14

6. Investments

(a) Investment in Affiliated Companies, Equity Method

	Alpha Star
	In January 2003, the Company further expanded its business to include wireless communication technology and related products. The Company made a strategic investment of $10,000 by subscribing for a 25% shareholding in Alpha Star, a BVI company, which is the ultimate holding company of Jiang Cheug Tang Wireless Technology Limited (“JCT”), a company engaged in the design, development and marketing of wireless communication terminals and wireless application software. The Company also manufactured wireless communication terminals and related modules for JCT. The Company recorded an equity in loss of Alpha Star of $186 for 2005.
	In August 2005, the Company disposed of its entire interest in Alpha Star to the majority shareholders of Alpha Star for a cash consideration of $6,500. As a result, a gain of $3,631 was recorded.
	For the year ended December 31, 2005, the Company recognized net sales of $6,195 to JCT and purchased raw materials of $5,766 from JCT and its related companies, respectively.
	The Company did not make any loans or guarantees or had any contingent liabilities with Alpha Star or any of its subsidiaries.
(b)	Investments in available-for-sale marketable securities
	The Company had various investments in TCL Group of companies in the form of available-for-sale marketable securities. The Company has not incurred any material operating revenue or expenses from the TCL Group of companies for the years ended December 31, 2005, 2006 and 2007.
	TCL Corporation
	In January 2002, the Company acquired a 6% equity interest in TCL Holdings Corporation Ltd., now known as TCL Corporation, for a consideration of $11,968. TCL Corporation, an enterprise established in the PRC, is the parent company of the TCL Group of companies. TCL Corporation’s scope of business includes the import and export of raw materials, the design, manufacturing and sales and marketing of telephones, VCD players, color television sets, mobile phones and other consumer electronic products. TCL Corporation changed from a limited liability company to a company limited by shares in April 2002 (the “Establishment Date”).
	In January 2004, TCL Corporation listed its A-shares on the Shenzhen Stock Exchange at RMB4.26 (equivalent to US$0.52) per A-share. The Company’s interest in TCL Corporation has then been diluted to 3.69% and represents 95.52 million promoter’s shares of TCL Corporation after its initial public offering. According to Article 147 of the Company Law of the PRC, the Company is restricted to transfer its promoter’s shares within three years from the Establishment Date. The Company is, however, entitled to dividend and other rights similar to the holders of A-shares.
	As these promoter’s shares have a restriction on their sale prior to April 2005, the Company, based on a comparable companies analysis and taking into account of a liquidity discount, determined the fair value of these shares as of December 31, 2005 and recognized an unrealized gain of $947 based on an estimated fair value of $13,330.
	In April 2006, pursuant to the Split Share Structure Reform (“SSR”) of TCL Corporation, the Company’s interest in TCL Corporation has been changed from 95,516,112 promoter shares to 80,600,173 A-shares diluting its interest from 3.69% to 3.12%. As a result of the reduction in the number of shares in TCL Corporation, the Company recorded a loss of $1.3 million ($1.9 million before sharing with minority interests). The A-shares became tradable on the Shenzhen Stock Exchange after the expiration of 12 months from April 20, 2006, which was the first trading day after the SSR was formally implemented. As at December 31, 2006, investment in TCL corporation was valued at market price with an estimated fair value of $24,360.

F-15

6. Investments — continued

(b)	Investments in available-for-sale marketable securities — continued
	TCL Corporation -continued
	In April 2007, the Company disposed of its entire interest in the A-shares of TCL Corporation through the Shenzhen Stock Exchange. The net proceeds from the disposal were $54 million (net of commission, expenses and stamp duty), resulting in a gain of approximately US$43.8 million.
	Huizhou TCL
	The Company had a 9% direct interest in Huizhou TCL Mobile Communication Co., Ltd. (“Huizhou TCL”). In August 2004, as part of the preparation for TCL Communication Technology Holdings Limited (“TCL Communication”)’s public offering on SEHK, the shares in Huizhou TCL were exchanged for the shares in TCL Communication. In September 2004, TCL Communication’s public offering was completed. At June 30, 2005, the Company recognized an impairment loss of $6,525 based on the fair value of $14,681. In the fourth quarter of 2005, the Company disposed of its entire stake in TCL Communication and recorded a loss of $3,686.
(c)	Investments in Subsidiaries
	Subsidiaries

			Percentage of ownership
	Place of	Principal	as at December 31,
	incorporation	activity	2006			2007
Consolidated principal subsidiaries:
Best Whole Holdings Limited	Hong Kong	Investment Holding		—			74.99	%
First Rich Holdings Limited	BVI	Investment Holding		—			73.18	%
JIC Technology	Cayman Islands	Investment holding		74.94	%		74.99	%
J.I.C. Enterprises (Hong Kong) Limited	Hong Kong	Inactive		74.94	%		74.99	%
Jetup Electronic (Shenzhen) Co., Ltd. (“Jetup”)	PRC	Manufacturing and trading		74.94	%		73.18	%
J.I.C. (Macao Commercial Offshore) Company Limited	Macao	Provision of consultancy, administrative and data processing services		74.94	%		74.99	%
Joy Holdings Limited	BVI	Investment holding		—			74.99	%
NTEEP	Cayman Islands	Investment holding		70.31	%		73.18	%
Nam Tai Group Management Limited	Hong Kong	Inactive		100	%		100	%
Nam Tai Investments Consultant (Macao Commercial Offshore) Company Limited	Macao	Provision of consultancy, administrative and data processing services		70.31	%		73.18	%
Nam Tai Telecom (Hong Kong) Company Limited	Hong Kong	Inactive		100	%		100	%
Nam Tai Trading Company Limited (“NTTC”)	Hong Kong	Inactive		100	%		100	%
Nam Tai Electronic (Shenzhen) Co., Ltd. (“NTSZ”)	PRC	Manufacturing and trading		70.31	%		73.18	%
Namtek Japan Company Limited (“Namtek Japan”)	Japan	Provision of sales co-ordination and marketing services		70.31	%		74.99	%

F-16

6. Investments — continued

(c) Investments in Subsidiaries — continued

			Percentage of ownership
	Place of	Principal	as at December 31,
	incorporation	activity	2006			2007
Shenzhen Namtek Co., Ltd. (“Shenzhen Namtek”)	PRC	Software development		70.31	%		74.99	%
Top Eastern Investment Limited	Hong Kong	Investment holding		—			73.18	%
Zastron Electronic (Shenzhen) Co. Ltd. (“Zastron”)	PRC	Manufacturing and trading		100	%		73.18	%
Zastron Precision-Tech Limited (“ZPTL”)	Cayman Islands	Investment holding		100	%		73.18	%
Zastron (Macao Commercial Offshore) Company Limited	Macao	Provision of consultancy, administrative and data processing services		100	%		73.18	%
Zastron Precision-Tech (Wuxi) Co., Ltd.	PRC	Manufacturing and trading		100	%		73.18	%
Zastron Precision-Flex (Wuxi) Co., Ltd.	PRC	Manufacturing and trading		100	%		73.18	%

Significant transactions

(i)	In March 2005, the Company disposed of a total of 30,000,000 ordinary shares of NTEEP for cash considerations of approximately $9,836, resulting in a gain on partial disposal of a subsidiary of approximately $5,870.
	In May 2005, through a series of linked transactions, the Company’s shareholding in NTEEP increased from 71.25% to 72.06% while the effective shareholding in Namtek Software decreased from 80% to 72.06% upon completion of the partial disposal of Namtek Software when the Company and Asano Company Limited (“Asano Company”), a company owned by the management of Namtek Software, transferred 80% and 20%, respectively, of their interest in Namtek Software to NTEEP for a total consideration of $26,700. The consideration was satisfied by the issuance of 81,670,588 new shares of NTEEP to the Company and Asano Company at approximately $0.327 per share. These transactions resulted in goodwill of $1,277 arising from the additional interest in NTEEP exchanged and a net gain on partial disposal of interest in Namtek Software of $1,930.
	In August 2005, the Company further disposed of a total of 22,574,000 ordinary shares of NTEEP for cash considerations of approximately $5,163. The disposal resulted in a net gain on partial disposal of a subsidiary of approximately $2,295 after deducting the releasing of goodwill of $45.
	In August and September 2006, the Company acquired a total of 7,152,000 ordinary shares of NTEEP for cash consideration of $1,010 resulting in 70.31% equity interest held in NTEEP as of December 31, 2006.
	In May 2007, the Company further acquired a total of 54,514,000 ordinary shares of NTEEP for cash consideration of $13,054. In June 2007, the Company disposed of a total of 29,199,000 ordinary shares of NTEEP for cash considerations of approximately $6,586. The disposal resulted in a net gain on partial disposal of a subsidiary of approximately $325 after deducting the releasing of goodwill of $134. The acquisition and disposal resulted in 73.18% equity interest held in NTEEP as of December 31, 2007.

F-17

6. Investments — continued

(c)	Investments in Subsidiaries — continued
	Significant transactions — continued

(ii)	In December 2007, the Company completed its reorganization of internal structure involving the structure of its two Hong Kong Stock Exchange (“SEHK”) listed subsidiaries, NTEEP and JIC Technology (“Reorganization”). The purpose of the reorganization is for the Company to centralize all electronic manufacturing services (“EMS”) business into NTEEP and non-EMS business into JIC Technology. The result is to turn NTEEP into a flagship EMS provider.
	Pursuant to the Reorganization, NTEEP acquired 100% equity interests in ZPTL and 100% equity interests in Jetup from the Company while JIC Technology acquired 100% equity interest in both Namtek Shenzhen and Namtek Japan (“Namtek group”).
	Upon the completion of the Reorganization, the Company’s effective shareholding in Namtek group increased from 73.18% to 74.99% while the effective shareholding in ZPTL and Jetup decreased from 100% to 73.18%, and 74.99% to 73.18%, respectively. The Company continues to own 73.18% and 74.99% equity interest in NTEEP and JIC Technology respectively as at December 31, 2007.

Retained earnings and reserves

The Company’s retained earnings are not restricted as to the payment of dividends except to the extent dictated by prudent business practices. The Company believes that there are no material restrictions, including foreign exchange controls, on the ability of its non-PRC subsidiaries to transfer surplus funds to the Company in the form of cash dividends, loans, advances or purchases. With respect to the Company’s PRC subsidiaries, there are restrictions on the payment of dividends and the removal of dividends from the PRC. On March 16, 2007, the PRC promulgated the Law of the PRC on Enterprise Income Tax (the “New Law”) by Order No. 63 of the President of the PRC. Please refer to Note 12 for further details of the New Law. The New Law becomes effective from January 1, 2008. Prior to the enactment of the New Law, when dividends are paid by the Company’s PRC subsidiaries, such dividends would reduce the amount of reinvested profits and accordingly, the refund of taxes paid might be reduced to the extent of tax applicable to profits not reinvested. Subsequent to the enactment of the New Law, due to the removal of tax benefit related to reinvestment of capital in PRC subsidiaries, the Company may not reinvest the profits made by the PRC subsidiaries. Payment of dividends by PRC subsidiaries to foreign investors on profits earned subsequent to January 1, 2008 will also be subject to withholding tax under the New Law. In addition, pursuant to the relevant PRC regulations, a certain portion of the profits made by these subsidiaries must be set aside for future capital investment and are not distributable, and the registered capital of the Company’s PRC subsidiaries are also restricted. These reserves and registered capital of the PRC subsidiaries amounted to $292,064 and $282,335 as of December 31, 2006 and 2007 respectively. However, the Company believes that such restrictions will not have a material effect on the Company’s liquidity or cash flows.

7.	Accrued expenses and other payables
	Accrued expenses and other payables consisted of the following:

At December 31,	2006		2007
Accrued salaries	$	3,537	$	4,795
Accrued bonus		1,537		4,278
Accrued tooling and equipment charges		643		2,563
Accrued professional fees		1,216		2,919
Others		6,716		7,135
	$	13,649	$	21,690

F-18

8.	Bank Loans and Banking Facilities
	The Company has credit facilities with various banks representing notes payable, trade acceptances, import facilities, revolving loans and overdrafts. At December 31, 2006 and 2007, these facilities totaled $36,161 and $35,237, of which $31,645 and $30,657 were unused at December 31, 2006 and 2007, respectively. The maturity of these facilities is generally up to 120 days. Interest rates are generally based on the banks’ usual lending rates in Hong Kong or the PRC and the credit lines are normally subject to annual review. The banking facilities are secured by guarantees given by Nam Tai and certain subsidiaries.
	The notes payable, which include trust receipts and shipping guarantees, may not agree to utilized banking facilities due to a timing difference between the Company receiving the goods and the bank issuing the trust receipt to cover financing of the purchase. The Company recognizes the outstanding letter of credit as a note payable when the goods are received, even though the bank may not have issued the trust receipt. However, this will not affect the total bank facility utilization, as an addition to the trust receipts will be offset by a reduction in the same amount of outstanding letters of credit.

At December 31,	2006		2007
Trust receipts	$	4,514	$	4,580
Usance bills pending maturity		2		—
Total banking facilities utilized		4,516		4,580
Less: Outstanding letters of credit		—		—
Notes payable and short term bank loans	$	4,516	$	4,580

A subsidiary of the Company has an unsecured four-year term loan with borrowings in 2004 totaling $7,000 at a rate of 0.75% p.a. over three months London Interbank Offered Rate (“LIBOR”), repayable in 16 quarterly installments of approximately $438 beginning July 2004. During the year 2007, it has obtained another unsecured three-year term loan totaling $2,670 at a rate of 0.55% p.a. over three months LIBOR, repayable in 12 quarterly installments of $222 beginning in October 2007. At December 31, 2007, the loans had outstanding balances of $3,548. There are no restrictive financial covenants associated with these term loans.

The long term bank loans at December 31, 2007 are repayable as follows for the years ending December 31

- 2008	$	1,990
- 2009		890
- 2010		668
	$	3,548

9. Shareholders’ Equity

(a)	The Company has only one class of common shares authorized, issued and outstanding.
(b)	Stock Options
	In May 2001 (and amended in July 2004), the Board of Directors approved a stock option plan which would grant 15,000 options to each non-employee director of the Company elected at each annual general meeting of shareholders, and might grant options to key employees, consultants or advisors of the Company or any of its subsidiaries to subscribe for its shares in accordance with the terms of this stock option plan based on past performance and/or expected contributions to the Company. The maximum number of shares to be issued pursuant to the exercise of options granted was 3,300,000 shares. The options granted under this plan generally have a term of two to three years, subject to the discretion of the Board of Directors, but cannot exceed ten years.
	In February 2006, the Board of Directors approved another stock option plan, and subsequently approved by the shareholders at the 2006 annual general meeting of shareholders, with the same terms and conditions. However, the maximum number of shares to be issued pursuant to exercise of options granted was 2,000,000 shares.

F-19

9. Shareholders’ Equity — continued

(b)	Stock Options — continued
	A summary of stock option activity during the three years ended December 31, 2007 is as follows:

	Number of			Weighted average
	options			fair value per option
Outstanding at January 1, 2005		737,050		$	6.83
Granted		1,105,000			6.79
Exercised		(841,050	)		6.74
Outstanding at December 31, 2005		1,001,000		$	6.86
Granted		90,000			6.64
Exercised		(281,000	)		7.01
Expired		(30,000	)		6.94
Outstanding at December 31, 2006		780,000		$	6.78
Granted		115,000			2.80
Expired		(600,000	)		6.77
Outstanding at December 31, 2007		295,000		$	5.24

Details of the options granted by the Company in 2005, 2006 and 2007 are as follows:

Number of		Exercise
options granted	Vesting period	price		Exercisable period
In 2005
1,000,000	100% vested at date of grant	$	20.84	February 4, 2005 to February 4, 2007
105,000	100% vested at date of grant	$	21.62	June 6, 2005 to June 6, 2008
In 2006
90,000	100% vested at date of grant	$	22.25	June 9, 2006 to June 8, 2009
In 2007
75,000	100% vested at date of grant	$	12.42	June 8, 2007 to June 7, 2010
40,000	100% will vest one year after date     of grant	$	12.13	May 14, 2008 to May 13, 2011

As of December 31, 2007, there was approximately $54 of unrecognized compensation expense related to non-vested stock options granted under the Company’s option plan.

The following summarizes information about stock options outstanding at December 31, 2007. 255,000 stock options are exercisable as of December 31, 2007 and 40,000 stock options will be exercisable on May 14, 2008.

			Weighted average
	Number		remaining contractual
Exercise prices	of options		life in months
$21.62		90,000		5.2
$22.25		90,000		17.3
$12.13		40,000		40.5
$12.42		75,000		30.3
		295,000		20.1

F-20

9. Shareholders’ Equity — continued

(b)	Stock Options — continued
	The weighted average remaining contractual life of the stock options outstanding at December 31, 2005, 2006 and 2007 was approximately 13, 6 and 20 months, respectively. The weighted average fair value of options granted during 2005, 2006 and 2007 was $6.79, $6.64 and $2.80, respectively, using the Black-Scholes option-pricing model based on the following assumptions:

Year ended December 31,	2005		2006			2007
Risk-free interest rate	3.56% to 3.59%			4.96	%	4.63% to 5.03%
Expected life		2 to 3 years	3 years				3 to 4 years
Expected volatility	62.62% to 71.14%			57.71	%	37.22% to 55.09%
Expected dividend per quarter	$	0.33	$	0.38		$	0.21

(c)	Share Buy — back
	No shares were repurchased during the years ended December 31, 2005, 2006 and 2007.
(d)	Share Redemptions
	On January 22, 1999, pursuant to its Articles of Association, the Company redeemed and canceled 415,500 shares of the Company registered in the name of Tele-Art Inc. (“Tele-Art”) at a price of $3.73 per share for $1,549 (see note 15(b)).
	On August 12, 2002, pursuant to its Articles of Association, the Company redeemed and cancelled an additional 509,181 shares of the Company beneficially owned by Tele-Art at a price of $6.14 per share for $3,125 (see note 15(b)).
	No shares have been redeemed since August 12, 2002.
	On November 20, 2006, judgment was rendered by the Lords of the Judicial Committee of the Privy Council of the United Kingdom (the “Privy Council”), declaring that the redemptions by the Company of its common shares beneficially owned by Tele-Art on January 22, 1999 and August 12, 2002 were nullities and that the register of members of the Company (i.e. the Company’s shareholders’ register) should be rectified to reinstate the redeemed shares together with any other shares which have since accrued by way of exchange or dividend.
(e)	Reinstatement of redeemed shares
	Following the November 20, 2006 judgment, the Company received the order from the Privy Council on January 9, 2007 to rectify the share register of Nam Tai by registering such 1,017,149 (after adjustment of the 1 for 10 stock dividend on November 7, 2003) shares (the “Redeemed Shares”) in the name of Bank of China (Hong Kong) Limited (“Bank of China”). In March 2007, the Company issued the 1,017,149 common shares. However, as the court judgment was determined in 2006, the Company accounted for the obligation to reinstate the Redeemed Shares at their fair value (i.e. market closing price) on November 20, 2006, the date of the judgment (see note 15(b)).

F-21

10.	Earnings Per Share
	The calculations of basic earnings per share and diluted earnings per share are computed as follows:

			Weighted
			average number		Per share
Year ended December 31, 2005	Income		of shares		amount
Basic earnings per share	$	51,306		42,944,682	$	1.19
Effect of dilutive securities - - Stock options		—		223,859		—
Diluted earnings per share	$	51,306		43,168,541	$	1.19

All options to purchase shares of common stock were included in the computation of 2005 diluted earnings per share as their effects were dilutive.

			Weighted
			average number		Per share
Year ended December 31, 2006	Income		of shares		amount
Basic earnings per share	$	40,756		43,702,135	$	0.93
Effect of dilutive securities - - Stock options		—		39,364		—
Effect of reinstatement of redeemed shares		—		116,088		—
Diluted earnings per share	$	40,756		43,857,587	$	0.93

397,000 options to purchase shares of common stock were excluded in the computation of 2006 diluted earnings per share as their effects were anti-dilutive.

			Weighted
			average number		Per share
Year ended December 31, 2007	Income		of shares		amount
Basic earnings per share	$	69,503		44,583,585	$	1.56
Effect of dilutive securities - - Stock options		—		963		—
Effect of reinstatement of redeemed shares		—		220,150		—
Diluted earnings per share	$	69,503		44,804,698	$	1.55

220,000 options to purchase shares of common stock were excluded in the computation of 2007 diluted earnings per share as their effects were anti-dilutive.

F-22

11.	Staff Retirement Plans
	The Company operates a retirement benefit scheme (“RBS”) for all qualifying employees in Macao and a Mandatory Provident Fund (“MPF”) scheme for all qualifying employees in Hong Kong. The RBS and MPF are defined contribution schemes and the assets of the schemes are managed by the trustees independent to the Company.
	Both the RBS and MPF are available to all employees aged 18 to 64 and with at least 60 days of service under the employment of the Company in Macao and Hong Kong. Contributions are made by the Company at 5% based on the staff’s relevant income. The maximum relevant income for contribution purpose per employee is $3 per month. Staff members are entitled to 100% of the Company’s contributions together with accrued returns irrespective of their length of service with the Company, but the benefit can be withdrawn by the employees in Macao at the end of employment contracts while the benefits are required by law to be preserved until the retirement age of 65 for employees in Hong Kong.
	According to the applicable laws and regulations in the PRC, prior to July 2006, the Company was required to contribute 8% to 9% of the stipulated salary set by the local government of Shenzhen, the PRC, to the retirement benefit schemes to fund the retirement benefits of their employees. With effect from July 2006, the applicable percentages were adjusted to 10% to 11%. The principal obligation of the Company with respect to these retirement benefit schemes is to make the required contributions under the scheme. No forfeited contributions may be used by the employer to reduce the existing level of contributions.
	The cost of the Company’s contribution to the staff retirement plans in Macao, Hong Kong and PRC amounted to $1,510, $1,534 and $1,800 for the years ended December 31, 2005, 2006 and 2007, respectively.
12.	Income Taxes
	The components of income before income taxes and minority interest are as follows:

Year ended December 31,	2005		2006		2007
PRC, excluding Hong Kong and Macao	$	36,138	$	23,372	$	78,318
Hong Kong, Macao and other jurisdictions		23,997		23,914		17,487
	$	60,135	$	47,286	$	95,805

Under the current BVI law, the Company’s income is not subject to taxation. Subsidiaries operating in Hong Kong and the PRC are subject to income taxes as described below, and the subsidiaries operating in Macao are exempted from income taxes. Under the current Cayman Islands law, ZPTL, NTEEP and JIC Technology are not subject to profit tax in the Cayman Islands as they have no business operations in the Cayman Islands. However, they may be subject to Hong Kong income taxes as described below if they are registered in Hong Kong.

The provision for current income taxes of the subsidiaries operating in Hong Kong has been calculated by applying the current rate of taxation of 17.5% to the estimated taxable income earned in or derived from Hong Kong during the period, if applicable.

The basic corporate tax rate for Foreign Investment Enterprises (“FIEs”) in the PRC, such as NTSZ, Zastron, Shenzhen Namtek and Jetup (collectively the “Shenzhen PRC subsidiaries”) is 33% (30% state tax and 3% local tax) as at December 31, 2007. However, because all of these PRC subsidiaries are located in Shenzhen and are involved in production operations, they qualify for a special reduced state tax rate of 15%. In addition, the local tax authorities in Shenzhen are not assessing any local tax as at December 31, 2007. In 2006, two new FIEs, namely Zastron Precision-Tech (Wuxi) Co. Ltd. and Zastron Precision-Flex (Wuxi) Co. Ltd., were established. They are located in Wuxi, Jiangsu Province, the PRC and will involve in production operations in year 2008 or after. They are also qualified for tax incentive as the subsidiaries in Shenzhen.

F-23

12.

Income Taxes — continued

Pursuant to the old PRC Tax Law, since the Shenzhen PRC subsidiaries have agreed to operate for a minimum of 10 years in the PRC, a two-year tax holiday from the first profit making year is available, following which in the third through fifth years there is a 50% reduction to 7.5%. In any event, for FIEs such as NTSZ, Zastron and Shenzhen Namtek which export 70% or more of the production value of their products, a reduction in the tax rate is available; in all cases apart from the years in which a tax holiday and tax incentive is available, there is an overall minimum tax rate of 10%. The following details the tax concessions received for the Company’s Shenzhen PRC subsidiaries under the old PRC Tax Law:

• In 2005, NTSZ received a tax refund of $1,815 from reinvestment of profit for 2003. Besides, NTSZ further paid $738 and subsequently received a tax refund of $1,726 from reinvestment of profit for year 2004 and a refund of $971 for being an export-oriented enterprise. In 2006, NTSZ paid $1,566 and received a tax refund of $746 for being an export-oriented enterprise for the year 2005. In 2007, NTSZ paid $9,145 and received a tax refund of $544 for being an export-oriented enterprise for the year 2006, and $431 from reinvestment of profit for the year 2005.

• On May 13, 2004, Zastron received the recognition of “High and New Technology Enterprise” and was entitled to enjoy a reduced corporate tax rate of 7.5% for three years commencing 2004. In 2005, Zastron received a refund of $1,398 from reinvestment of profit for year 2000 to 2003. Besides, Zastron further paid $170 and subsequently received a tax refund of $874 from reinvestment of profit for year 2004. In year 2006, Zastron has applied and is waiting for tax refund for year 2005. In 2007, Zastron paid $354 and received a tax refund of $191 and $494 from reinvestment of profits for years 2005 and 2006, respectively.

• In 2005, 2006 and 2007, Shenzhen Namtek is entitled to a 5% tax refund for being an export-oriented enterprise.

• During 2005, Jetup received a refund of $233 and $346 from reinvestment of profit for 2003 and 2005, respectively. In 2006, Jetup received a tax refund of $211 for being export-oriented enterprises for the year 2005. In 2007, Jetup received a tax refund of $137 for being an export-oriented enterprise for the year 2006. Besides, Jetup also received $98 and $258 from reinvestment of profits for the years 2005 and 2006, respectively.

In years 2005 and 2006, a FIE whose foreign investor directly reinvests by way of capital injection its share of profits obtained from that FIE or another FIE owned by the same foreign investor in establishing or expanding an export-oriented or technologically advanced enterprise in the PRC for a minimum period of five years may obtain a refund of the taxes already paid on those profits. NTSZ, Zastron and Jetup qualified for such refunds of taxes as a result of reinvesting their profit earned in previous years by their respective holding companies. As a result, the Company recorded tax expense net of the benefit related to the refunds. At December 31, 2006 and 2007, taxes recoverable under such arrangements were $4,104 and $5,365, respectively, which were included in income taxes recoverable and expected to be received during 2007 and 2008.

On March 16, 2007, the PRC promulgated New Law. Under the New Law which becomes effective from January 1, 2008, inter alia, the tax refund under the capital reinvestment scheme as described above is removed. As a result, for 2007, the Shenzhen PRC subsidiaries have continued to provide enterprise income tax at a tax rate of 10% as discussed above. In addition, under the New Law, all enterprises (both domestic enterprises and FIEs) will have one uniform tax rate of 25%. On December 6, 2007, the State Council of the PRC issued Implementation Regulations of the New Law. The New Law and Implementation Regulations have changed the tax rate from 15% to 18%, 20%, 22%, 24% and 25% for the years ending December 31, 2008, 2009, 2010, 2011, 2012 respectively for Shenzhen PRC subsidiaries. The deferred tax balance has been adjusted to reflect the tax rates that are expected to apply. Moreover, under the New Law, there will be no reduction in the tax rate for FIEs which export 70% or more of the production value of their products with effect from January 1, 2008. As such, the Company does not expect any further benefit for 2008 after the implementation of the New Law.

The Company has adopted FIN 48 on January 1, 2007. There is no material impact on the adoption of FIN 48. The Company classifies interest and/or penalties related to unrecognized tax benefits as a component of income tax provisions; however, as of December 31, 2007, there is no interest and penalties related to uncertain tax positions, and the Company has no material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods. The Company does not anticipate any significant increases or decreases to its liability for unrecognized tax benefit within the next twelve months. Other than the audit by the Hong Kong tax authorities as described below, the tax positions for the years 2005 to 2007 may be subject to examination by the PRC and Hong Kong tax authorities.

F-24

12.	Income Taxes — continued
	In accordance with its normal practice, the Hong Kong tax authorities selected the Company and one of its wholly owned subsidiaries, NTTC, for a tax audit. The Hong Kong tax authorities have made certain estimated assessments, in relation to fiscal years 1996 through 1999, for public revenue protection purposes to prevent the assessments, if any, from becoming time barred. The Hong Kong tax authorities did not provide concrete grounds for the assessments until a determination dated October 31, 2007 was given which indicated the disallowance of tax deductions for certain management fee expenses and professional expenses paid by NTTC to the Company. The amount of additional tax relating to fiscal years 1996 to 1999 demanded by the Hong Kong tax authorities was approximately $2,928. The Company and NTTC have objected to these estimated assessments. The Company believes it has good grounds of appeal and accordingly has launched an appeal to the Board of Review against the determination issued by the Hong Kong tax authorities. The appeal is expected to be heard in June 2008. The Company has assessed this tax position and believed NTTC has good technical merits. Accordingly, no provision for tax liability in this respect is considered to be necessary.
	The current and deferred components of the income tax expense appearing in the consolidated statements of income are as follows:

Year ended December 31,	2005			2006			2007
Current tax	$	(651	)	$	(377	)	$	(7,276	)
Deferred tax		—			—			3,246
	$	(651	)	$	(377	)	$	(4,030	)

The Company’s deferred tax assets and liabilities as of December 31, 2006 and 2007 are attributable to the following:

December 31,	2006			2007
Net operating losses	$	1,647		$	1,040
Allowance for obsolete inventories		—			45
Allowance for doubtful accounts		—			9
Property, plant and equipment		—			3,192
Total deferred tax assets		1,647			4,286
Less: valuation allowance		(1,647	)		(1,040	)
	$	—		$	3,246

Movement of valuation allowance:

December 31,	2005		2006		2007
At the beginning of the year	$	1,026	$	1,560	$	1,647
Current year addition (reduction)		534		87		(607	)
At the end of year	$	1,560	$	1,647	$	1,040

The valuation allowance as of December 31, 2006 and 2007 was related to net operating losses carried forward that, in the judgment of management, are more likely than not that the assets will be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

For the years ended December 31, 2005, 2006 and 2007, the Company had net operating losses of $3,051, $496 and nil, respectively, which may be carried forward indefinitely.

F-25

12.	Income Taxes — continued
	A reconciliation of the income tax expense to the amount computed by applying the current tax rate to the income before income taxes in the consolidated statements of income is as follows:

Year ended December 31,	2005			2006			2007
Income before income taxes and minority interests	$	60,135		$	47,286		$	95,805
PRC tax rate		15	%		15	%		15	%
Income tax expense at PRC tax rate on income before income tax	$	(9,020	)	$	(7,093	)	$	(14,371	)
Effect of difference between Hong Kong and PRC tax rates applied to Hong Kong income		196			(149	)		132
Effect of income for which no income tax expense is payable, net		4,813			2,709			3,418
Tax holidays and tax incentives		2,103			1,381			3,902
Effect of PRC tax concessions, giving rise to no PRC tax liability		2,667			1,794			—
Effect of change in tax law on deferred tax assets		—			—			3,246
Net change in valuation allowance		(534	)		(87	)		607
Tax benefit (expense) arising from items which are not assessable (deductible) for tax purposes:
Gain on disposal of land in Hong Kong		82			—			—
Gain on disposal of asset held for sale		—			1,620			—
Exempted interest income		17			52			124
Exempted exchange gain		—			—			984
Non-deductible legal and professional fees		(317	)		(75	)		(332	)
Non-deductible and non-taxable other items		(744	)		(470	)		(672	)
Underprovision of income tax expense in prior years		(41	)		(67	)		(877	)
Others		127			8			(191	)
	$	(651	)	$	(377	)	$	(4,030	)

No income tax arose in the United States of America in any of the periods presented.

	Additional tax that would otherwise have been payable without tax holidays and tax concessions amounts to approximately $4,770, $3,175 and $3,902 in the years ended December 31, 2005, 2006 and 2007, respectively (representing a decrease in the basic earnings and diluted earnings per share of $0.11, $0.07 and $0.08 in the years ended December 31, 2005, 2006 and 2007, respectively).
13.	Related Party Balance and Transactions
	For the year ended December 31, 2005, the Company recognized net sales of $6,195 to JCT and purchased raw materials of $5,766 from JCT and its related companies. There were no sales to or purchases from JCT and its related companies in the years ended December 31, 2006 and 2007.

F-26

14.	Financial Instruments
	The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of its cash and cash equivalents and trade receivables.
	The Company’s cash and cash equivalents are high-quality deposits placed with banking institutions with high credit ratings. This investment policy limits the Company’s exposure to concentrations of credit risk.
	The trade receivable balances largely represent amounts due from the Company’s principal customers who are generally international organizations with high credit ratings. Letters of credit are the principal security obtained to support lines of credit or negotiated contracts from a customer. As a consequence, concentrations of credit risk are limited. Allowance for doubtful debts was $152 and $53 as of December 31, 2006 and 2007, respectively. There were no other movements in the allowance for doubtful accounts.
	The Company’s financial instruments reported in current assets or current liabilities in the consolidated balance sheet at carrying amounts approximate their fair values due to the short term nature of these instruments. The Company’s financial instruments reported as non-current liabilities, such as its long term bank loans, approximate their fair values due to the variable nature of the interest calculations.
15.	Commitments and Contingencies

(a)	Lease commitments
	The Company leases premises under various operating leases, certain of which contain contingent escalation clauses whereby the percentage increase is subject to periodic review and agreement between the Company and the lessor. Rental expense under operating leases was $1,546, $1,855 and $1,877 in the years ended December 2005, 2006 and 2007, respectively.
	At December 31, 2007, the Company was obligated under operating leases, which relate to land and buildings, requiring minimum rentals as follows:

Year ending December 31,

- 2008	$	1,789
- 2009		1,449
- 2010		1,428
- 2011		1,532
- 2012		639
	$	6,837

(b)	Significant legal proceedings
	Tele-Art
	In June 1997, the Company filed a petition in BVI for the winding up of Tele-Art on account of an unpaid judgment debt owed to the Company. The High Court of Justice of BVI granted an order to wind up Tele-Art in July 1998. Tele-Art appealed to the Court of Appeal of BVI against the winding up order. This appeal was heard on January 13, 1999 by the Court of Appeal and was dismissed on January 25, 1999. On January 22, 1999, pursuant to its Articles of Association, the Company redeemed and cancelled 415,500 shares (*) of the Company registered in the name of Tele-Art at a price of $3.73 per share to offset substantially all of the judgment debt of $799, plus interest and legal costs totaling $1,673. The Company had also previously withheld dividends on shares beneficially owned by Tele-Art, which were applied towards the partial satisfaction of the said judgment debts costs, and interest.
	In September 1999, the High Court heard the application by the Company dated March 22, 1994 for an inquiry into damage suffered by the Company (the “First Inquiry”) as a result of the ex-part injunction granted to Tele-Art against the Company on September 29, 1993 which prohibited the Company from proceeding with a rights offering in September 1993. On August 9, 2002, the High Court delivered its decision on the First Inquiry and awarded the Company damages of approximately $34,000.

F-27

15. Commitments and Contingencies — continued

(b)	Significant legal proceedings — continued
	Tele-Art - continued
	Following the completion of the first redemption on January 22, 1999, the Company received notice that David Hague, the then liquidator of Tele-Art, had obtained an ex-parte injunction from the High Court preventing the Company from redeeming the 415,500 shares *.
	On July 5, 2002, upon the Company’s application, the High Court ordered the removal of the David Hague’s ex-parte injunction and ordered an inquiry into damages suffered by the Company as a result of the injunction (the “Second Inquiry”).
	On August 12, 2002, the Company redeemed and cancelled, pursuant to its Articles of Association, the remaining 509,181 shares (**) beneficially owned by Tele-Art at a price of $6.14 per share. Including the dividends which the Company had withheld and credited against the judgment, this offset a further $3,519 in judgment debts owed to the Company by Tele-Art. The Company recorded the $3,333 redemption, net of expenses, as other income in 2002.
	In accordance with the directions given by the High Court in respect of the Second Inquiry on March 28, 2003, the Company filed its points of claim on April 3, 2003 and subsequently filed amended points of claim on April 16, 2003. In breach of the court’s directions, David Hague failed to file his points of defense on June 20, 2003 as ordered by the court but instead, he filed an application in the High Court, inter alia, to strike out the Company’s points of claim and for summary judgment on the inquiry into damages on June 20, 2003. The Company thereupon applied to the High Court on August 19, 2003 for judgment against David Hague in default of defense on the basis that David Hague had not complied with the directions of the court for the filing of his points of defense to the Company’s points of claim.
	Both applications were heard by the High Court on May 12, 2004. At the hearing, the court allowed David Hague to file his points of defense. The Company filed an application for leave to appeal against this ruling on May 24, 2004. The High Court dismissed David Hague’s strike out application on December 14, 2004 and David Hague applied for leave to appeal against the order dismissing his application on December 28, 2004. The Company’s appeal and David Hague’s appeal were heard by the Court of Appeal from September 19 to 21, 2005 and the court delivered its judgment on January 16, 2006. In this judgment, the Court of Appeal reversed the High Court’s ruling on David Hague’s application and struck out the Company’s points of claim on the inquiry into damages on the ground that the Company had no realistic process of succeeding on the same. The court also ordered costs against the Company to be assessed on a prescribed costs basis. The court further expressed the view that, in light of its dismissal of the Company’s points of claim, it was not necessary to rule on the Company’s appeal against the dismissal of its application for judgment in default since the point was now academic with the dismissal of the Company’s points of claim.
	The Company filed an application for leave to appeal the decision of the Court of Appeal to the Privy Council, the final appellate court in the BVI, on February 3, 2006. The application for leave to appeal was heard by the Court of Appeal on May 8, 2006. The Court delivered its judgment on May 9, 2006 dismissing the Company’s application for leave on the ground that the matter was not one of great public importance and therefore did not merit the consideration of the Privy Council. The Company was ordered to pay Mr. Hague’s costs of the application, such costs were to be assessed in default of an agreement.
	The Company, being dissatisfied with the judgment of the Court of Appeal denying its application for leave to apply for appeal directly to the Privy Council, on November 3, 2006 the Company applied to the Privy Council for special leave to appeal to the Privy Council. This application was heard by the London based Privy Council on March 29, 2007 and dismissed with costs.

F-28

15. Commitments and Contingencies — continued

(b)	Significant legal proceedings — continued
	Tele-Art - continued
	Previously, on February 4, 1999, David Hague, the then liquidator of Tele-Art filed, a summons (the “Priority Summons”) in the BVI on its behalf seeking, among other matters:

• A declaration as to the respective priorities of the debts of Tele-Art to the Bank of China, the Company, and other creditors and their respective rights to have their debts discharged out of the proceeds of the Tele-Art’s Nam Tai shares;

• An order setting aside the redemption of 415,500 shares *, and ordering delivery of all shares in possession or control of the Company to the liquidator; and

• Payment of all dividends in respect of Tele-Art’s Nam Tai shares.

The Priority Summons was heard by the High Court on July 29 and 30, 2002 and the High Court delivered its judgment on January 21, 2003 declaring that the redemption and set-off of dividends on the 415,500 shares* be set aside and that all Tele-Art’s property withheld by the Company be delivered to Tele-Art in liquidation. On February 4, 2003, the Company filed an application for a stay of execution and leave to appeal the decision. The appeal was heard on January 12, 2004 and judgment was delivered on April 26, 2004. The Court of Appeal held that the redemption by the Company of 415,500* of the Company’s shares was proper and efficacious. However, the Company was ordered to return the redemption proceeds and dividends payable on the redeemed shares to the liquidator. David Hague obtained leave to appeal to the Privy Council on September 21, 2004 the Court of Appeal finding that the redemption by the Company was efficacious.

The Bank of China, which had been involved in the proceedings in the High Court and Court of Appeal with respect to the Priority Summons, applied on December 12, 2005 for special leave to intervene and to be joined as a respondent to the Privy Council appeal of David Hague, firstly so as to be in a position to support David Hague’s appeal and secondly, to appeal against that part of the Court of Appeal order that declared that the redemption price for the sale of the Company’s shares owned by Tele-Art and redeemed by Nam Tai and all withheld dividends to be paid to the liquidator of Tele-Art rather than the Bank of China despite a finding by the BVI court that the Bank of China was a secured creditor of Tele-Art. The Bank of China’s application for special leave was heard by the Privy Council on February 6, 2006 which granted the Bank of China special leave to intervene on the ground that the matter raised important points of law.

The Privy Council heard David Hague’s appeal on October 9, 2006 and judgment was delivered on November 20, 2006 (the “Judgment”). In the Judgment, the Privy Council allowed Mr. Hague’s appeal and declared that the Company’s redemptions of the Tele-Art’s Nam Tai shares of January 22, 1999 and August 12, 2002 were nullities and ordered the Company to rectify its register of members, i.e. shareholders registry, to reinstate the shares it had redeemed, together with any other shares which have accrued by way of exchange or dividend since the redemptions. It also declared in the Judgment that the Bank of China be registered as owner of the reinstated shares. In addition, the Company was ordered to pay the costs incurred by Mr. Hague and the Bank of China in the appeal to the Privy Council. Under the terms of the Judgment, the Bank of China is entitled to have Tele-Art’s debt to Bank of China and its associated expenses in relation to the Privy Council proceedings paid from proceeds of the sale of the Company’s reinstated shares.

On January 8, 2007, the Bank of China wrote to the Company demanding that it comply with the Judgment by (a) rectifying its share register to reflect the fact that the Bank of China is the owner of 1,017,149 shares; (b) issuing to the Bank of China a share certificate for the shares effective as of the dates they were redeemed and the dates of issue for shares attributable to the redeemed shares as a consequence of the Company’s 3 for 1 stock split of June 30, 2003 and 1 for 10 stock dividend of November 7, 2003; and (c) sending the share certificates to the Bank of China’s address stated in the Judgment. The Bank of China also demanded payment of dividends on the redeemed shares which the Bank of China calculated at $5,595, such demand being on the basis that as Bank of China, as the registered owner of the shares, was entitled to the payment of these dividends.

F-29

15. Commitments and Contingencies — continued

(b)	Significant legal proceedings — continued
	Tele-Art - continued
	The Company responded on January 23, 2007 confirming that it intended to take all necessary steps to comply with the Judgment and to this end, was in the process of finalizing advice from its U.S. Securities lawyers on the proper method of reinstating the shares to the Bank of China. The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) and accordingly applied to the NYSE to list on the NYSE the 1,017,149 shares to be reinstated and delivered to the Bank of China in accordance with the Judgment. The Company subsequently received notice from the NYSE that such shares had been approved for listing subject to official notice of reinstatement. The Company thereafter proceeded to issue instructions to its transfer agent to reinstate these shares and to register them in the name of the Bank of China. These instructions were duly carried out and the Bank of China became the registered owner of the 1,017,149 shares.
	The Company however disputed the Bank of China’s claim for payment of the dividends on the ground that this was contrary to what the Bank of China had argued in the Privy Council and in any event was not part of the Judgment.
	The Company has not paid dividends on the Redeemed Shares since 1997 and at September 4, 2007 (the day immediately preceding the date Bank of China sold a portion of the Redeemed Shares to satisfy its claim against Tele-Art, as discussed below), the amount that would have accrued on the Redeemed Shares had such shares not been redeemed totaled approximately $5,595. Although the Privy Council did not address the issue of entitlement to post redemption dividends in the Judgment, following the Judgment, the Bank of China has made claim to such dividends, a claim that the Company has denied. The Bank of China, however, subsequently abandoned this claim upon receipt of payment of their debt from the proceeds of the sale of a portion of the Redeemed Shares in September 2007.
	The Bank of China forwarded the share certificates in respect of 477,319 shares to Mr. Glenn Harrigan, the liquidator of Tele-Art, on September 18, 2007. In forwarding these shares, the Bank of China informed the liquidator that these shares represented the balance of the shares remaining after they had liquidated 539,830 shares, from which the Bank of China had received sale proceeds of the sum of approximately $6,937. Thereafter, the Bank of China, by its letter of November 1, 2007, purported to give an account as to the application of such sale proceeds.
	The sale proceeds retained by the Bank of China included a provision of approximately $900 as its legal costs for related litigation. The Company has been advised by its legal advisers that such retention is wrongful. The Company intends to commence legal proceedings against the Bank of China for such wrongful retention and for a true accounting of the sale proceeds retained by the Bank of China in payment of the amounts allegedly owing to it. Also, the Bank of China had made claims related to the liquidation of Tele-Art against the Company in the High Court of Hong Kong, which claims the Company is now defending. Furthermore, investigations by the Company as the assignee of certain rights of actions of the liquidator of Tele-Art to recover the assets of Tele-Art are still continuing. The liquidation case of Tele-Art is therefore not expected to be completed soon but will continue for quite some time. Therefore, the cash dividends through September 4, 2007 attributable to the 539,830 Redeemed Shares that were sold by the Bank of China and the cash dividends accruing to date and attributable to the remaining Redeemed Shares have been deposited into a segregated account. Similarly, future cash dividends attributable to the remaining Redeemed Shares will be, until such shares are liquidated, deposited in such segregated account, as will the net proceeds from the remaining shares when liquidated. From the funds so deposited, all future legal costs and other expenses relating to the liquidation of Tele-Art will be paid until the Tele-Art liquidation is completed and finalized.

F-30

15. Commitments and Contingencies — continued

(b)	Significant legal proceedings — continued
	Tele-Art - continued
	On August 25, 2005, the liquidator filed his summons in the High Court of BVI seeking for approval of his fourth liquidator report. The report sought the court’s approval of his recommendation of the amount of debt owed by Tele-Art to the Company of approximately $38,900, two other unsecured creditors of approximately $221 and the fee to David Hague of approximately $382. The report also sought the Court’s approval of the Company’s proposal on the distribution of the redemption proceeds among the unsecured creditors and direction of court on whether Bank of China was eligible to claim any amounts against Tele-Art and, if eligible, the quantum of such debt. This liquidator’s summons was due to be heard on February 20, 2006 but had been adjourned to a date to be fixed by the Registrar of the High Court. It is expected that in light of the Judgment of November 20, 2006, the liquidator may seek to have the issues raised in its summons adjudicated by the BVI court, but up to March 14, 2008, the Company has not received any information to this effect or otherwise as such status of this proceeding remained unchanged.
	On April 11, 2005, Bank of China also filed a summons to the BVI Court seeking orders to force Nam Tai to pay the redemption price and dividends ordered by the Court of Appeal on the appeal of the Priority Summons to Bank of China. Nam Tai filed an affidavit of evidence in response on July 19, 2005. A determination by the court of this proceeding has now been rendered moot by the Judgment and although the Company expects that the Bank of China will now withdraw or abandon its prosecution. As of March 14, 2008, the Company has not received any information to that effect or otherwise.
	The losses the Company incurred of $14,465 at and through the Company’s year ended December 31, 2006 arising from the Judgment ordering reinstatement of the Redeemed Shares were determined by taking into account the fair value (i.e. market closing price) of the Company’s shares on November 20, 2006 (the date of the Judgment); the estimated costs and expenses of the Bank of China and David Hague that the Company expects will be claimed in connection with the Privy Council litigation proceedings; and a reversal of the $3,890 provision previously made by the Company in 2003 with respect to these proceedings.
	The Company has continued to vigorously pursue all legal alternatives available to recover the maximum amount of the outstanding debt from Tele-Art as well as to pursue other parties that may have assisted in any transfers of the assets from Tele-Art.
	In furtherance of this objective, the Company has also instituted proceedings in the BVI against UBS PaineWebber, or UBS, on June 20, 2005, for breach of trust with respect to UBS’s role as brokers in carrying out the terms of the September 1997 BVI court order for the sale of Tele-Art’s Nam Tai shares in sufficient quantities to pay the debts of the Bank of China and the Company. UBS subsequently filed an application challenging the jurisdiction of the Court. On July 25, 2006 however, the Court, upon the application of UBS, made an Order staying the BVI court proceedings pending the outcome of the New York Court proceedings which in effect dealt with almost identical matters as the BVI proceedings. This stay remains in place and awaits the outcome of the New York matter which the Company understands continues to proceed to trial.
	(* Subsequent to November 7, 2003, the number of shares was adjusted to 457,050 to reflect the 1-for-10 stock dividend effective on that date.)
	(** Subsequent to November 7, 2003, the number of shares was adjusted to 560,099 to reflect the 1-for-10 stock dividend effective on that date.)

F-31

15. Commitments and Contingencies — continued

(b)	Significant legal proceedings — continued
	Shareholders’ Actions
	The Company and certain of its directors are defendants in consolidated class actions entitled Rocco vs. Nam Tai Electronics et al., Lead Case No. 03-cv-01148-JES, originally commenced on February 20, 2003 and pending in the United States District Court in the Southern District of New York. The named plaintiffs purport to represent a putative class of persons who purchased our common shares from July 29, 2002 through February 18, 2003. The plaintiffs asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and allege that misrepresentations and/or omissions were made during the alleged class period concerning the partial reversal of an inventory provision and a charge to goodwill related to the Company’s LCDP segment. The Company filed an answer to the amended and consolidated complaint and oral argument on the plaintiffs’ most recent motion for class certification was held on February 1, 2007. Following that hearing, on August 21, 2007, the court denied the plaintiffs’ motion for class certification.
	A conference with the court was held on January 17, 2008 wherein the plaintiff indicated that he wished to proceed with his case as an individual, notwithstanding the denial of class certification. The court ordered that the parties to begin discovery within the next six months and to appear for a pretrial conference on September 16, 2008. In February 2008, the parties reached an agreement in principle on a possible settlement of the individual action; however, as of March 14, 2008, the agreement has yet been concluded. The damages sought by the plaintiff in an individual capacity are not material to the Company’s financial condition or results of operations and accordingly, the Company does not intend to provide further disclosure on this litigation unless an event occurs during its course that it believes would be material.

F-32

16.	Segment Information
	The Company operates in three segments: CECP, TCA and LCDP. These segments are operated and managed as strategic business units. The chief operating decision maker evaluates the net income of each segment in assessing performance and allocating resources between segments.
	The following table provides operating financial information for the three reportable segments.

Year ended December 31, 2005

	CECP			TCA			LCDP			Corporate			Total
Net sales — third parties	$	169,056		$	563,874		$	58,112		$	—		$	791,042
Net sales — related parties		—			6,195			—			—			6,195
Total net sales		169,056			570,069			58,112			—			797,237
Cost of sales		(134,002	)		(523,869	)		(46,443	)		—			(704,314	)
Gross profit		35,054			46,200			11,669			—			92,923
Selling, general and administrative expenses		(11,166	)		(10,364	)		(6,224	)		(5,303	)		(33,057	)
Research and development expenses		(3,500	)		(2,546	)		(1,164	)		—			(7,210	)
Other income (expenses), net		2,508			1,276			740			(4,649	)		(125	)
Dividend income received from marketable securities		579			—			—			—			579
Gain on partial disposal of subsidiaries		—			—			—			10,095			10,095
Gain on disposal of an affiliated company		—			—			—			3,631			3,631
Loss on disposal of marketable securities		—			—			—			(3,686	)		(3,686	)
Impairment loss on marketable securities		—			—			—			(6,525	)		(6,525	)
Interest income		514			728			47			2,659			3,948
Interest expense		—			—			(438	)		—			(438	)
Income (loss) before income taxes and minority interests		23,989			35,294			4,630			(3,778	)		60,135
Income taxes		(498	)		(78	)		(75	)		—			(651	)
Income (loss) before minority interests and equity in loss of an affiliated company		23,491			35,216			4,555			(3,778	)		59,484
Minority interests		(6,661	)		—			(1,331	)		—			(7,992	)
Equity in loss of an affiliated company		—			—			—			(186	)		(186	)
Net income (loss)	$	16,830		$	35,216		$	3,224		$	(3,964	)	$	51,306

Year ended December 31, 2006

	CECP			TCA			LCDP			Corporate			Total
Net sales — third parties	$	178,320		$	627,199		$	64,655		$	—		$	870,174
Cost of sales		(148,013	)		(582,052	)		(53,888	)		—			(783,953	)
Gross profit		30,307			45,147			10,767			—			86,221
Gain on disposal of asset held for sale		—			—			—			9,258			9,258
Selling, general and administrative expenses		(10,026	)		(11,960	)		(5,167	)		(3,515	)		(30,668	)
Research and development expenses		(3,285	)		(3,064	)		(1,517	)		—			(7,866	)
Losses arising from the judgment to reinstate redeemed shares		—			—			—			(14,465	)		(14,465	)
Other income (expenses), net		954			577			—			(2,796	)		(1,265	)
Loss on marketable securities arising from split share structure reform		(1,869	)		—			—			—			(1,869	)
Interest income		1,638			809			84			6,011			8,542
Interest expense		—			—			(602	)		—			(602	)
Income (loss) before income taxes and minority interests		17,719			31,509			3,565			(5,507	)		47,286
Income taxes		(214	)		(85	)		(78	)		—			(377	)
Income (loss) before minority interests and equity in loss of an affiliated company		17,505			31,424			3,487			(5,507	)		46,909
Minority interests		(5,251	)		—			(904	)		2			(6,153	)
Equity in (loss) profit of an affiliated company		—			—			(8	)		8			—
Net income (loss)	$	12,254		$	31,424		$	2,575		$	(5,497	)	$	40,756

F-33

16. Segment Information — continued

Year ended December 31, 2007

	CECP			TCA			LCDP			Corporate			Total
Net sales — third parties	$	283,757		$	413,198		$	83,867		$	—		$	780,822
Cost of sales		234,729			384,443			74,632			—			693,804
Gross profit		49,028			28,755			9,235			—			87,018
Selling, general and administrative expenses		(15,269	)		(10,831	)		(6,331	)		(4,119	)		(36,550	)
Research and development expenses		(4,144	)		(3,941	)		(1,713	)		—			(9,798	)
Other income (expenses), net		4,851			561			(121	)		(3,072	)		2,219
Gain on partial disposal of subsidiaries’ shares		—			—			—			390			390
Gain on disposal on marketable securities		43,815			—			—			—			43,815
Interest income		3,609			1,055			30			4,469			9,163
Interest expense		(24	)		—			(452	)		24			(452	)
Income (loss) before income taxes and minority interests		81,866			15,599			648			(2,308	)		95,805
Income taxes		(5,655	)		350			1,275			—			(4,030	)
Income (loss) before minority interests		76,211			15,949			1,923			(2,308	)		91,775
Minority interests		(21,693	)		—			(458	)		(121	)		(22,272	)
Net income (loss)	$	54,518		$	15,949		$	1,465		$	(2,429	)	$	69,503

Year ended December 31, 2005

	CECP		TCA		LCDP		Corporate		Total
Depreciation and amortization	$	5,132	$	7,140	$	3,508	$	1,044	$	16,824
Capital expenditures	$	13,498	$	8,402	$	10,222	$	44	$	32,166
Identifiable assets	$	148,173	$	170,624	$	57,736	$	143,478	$	520,011

Year ended December 31, 2006

	CECP		TCA		LCDP		Corporate		Total
Depreciation and amortization	$	6,484	$	8,488	$	4,052	$	—	$	19,024
Capital expenditures	$	1,992	$	19,864	$	1,937	$	—	$	23,793
Identifiable assets	$	181,634	$	170,129	$	58,172	$	119,300	$	529,235

Year ended December 31, 2007

	CECP		TCA		LCDP		Corporate		Total
Depreciation and amortization	$	6,815	$	10,453	$	4,230	$	3	$	21,501
Capital expenditures	$	5,609	$	4,996	$	4,568	$	94	$	15,267
Identifiable assets	$	212,098	$	150,963	$	64,628	$	117,129	$	544,818

There were no material inter-segment sales for the years ended December 31, 2005, 2006 and 2007. The Company charges 100% of its corporate level related expenses to its reportable segments.

F-34

16.	Segment Information — continued
	A summary sets forth the percentage of net sales of each of the Company’s product lines of each segment for the years ended December 31, 2005, 2006 and 2007, is as follows:

Year ended December 31,	2005			2006			2007
Product line
CECP:
- Assembling
- Consumer electronics and communication products		20	%		20	%		36	%
- Software development services		1	%		1	%		—
		21	%		21	%		36	%
TCA		72	%		72	%		53	%
LCDP:
- Parts and components
- LCD products		7	%		7	%		11	%
		100	%		100	%		100	%

A summary of net sales, net income and long-lived assets by geographic areas is as follows:

By geographical area:

Year ended December 31,	2005			2006			2007
Net sales from operations within:
- Hong Kong and Macao:
Unaffiliated customers	$	58,112		$	—		$	—
Intercompany sales		670			—			—
		58,782			—			—
- PRC, excluding Hong Kong and Macao:
Unaffiliated customers		732,930			870,174			780,822
Related parties		6,195			—			—
Intercompany sales		—			418			253
		739,125			870,592			781,075
- Intercompany eliminations		(670	)		(418	)		(253	)
Total net sales	$	797,237		$	870,174		$	780,822
Net income within:
- PRC, excluding Hong Kong and Macao	$	31,354		$	18,743		$	52,338
- Hong Kong and Macao		19,952			22,013			17,165
Total net income	$	51,306		$	40,756		$	69,503

F-35

16. Segment Information — continued

Year ended December 31,	2005		2006		2007
Net sales to customers by geographical area:
- Hong Kong	$	383,138	$	258,774	$	255,569
- Europe		138,974		131,763		128,800
- United States		33,259		76,620		113,352
- PRC (excluding Hong Kong)		151,788		272,916		169,395
- Japan		14,858		19,259		20,827
- North America (excluding United States)		492		1,999		11,328
- Korea		53,979		49,434		34,731
- Other		20,749		59,409		46,820
Total net sales	$	797,237	$	870,174	$	780,822

As of December 31,	2005		2006		2007
Long-lived assets by geographical area:
- PRC, excluding Hong Kong and Macao	$	100,372	$	105,123	$	98,441
- Hong Kong and Macao		369		271		158
Total long-lived assets	$	100,741	$	105,394	$	98,599

Intercompany sales arise from the transfer of finished goods between subsidiaries operating in different areas. These sales are generally at prices consistent with what the Company would charge third parties for similar goods.

The Company’s sales to customers which accounted for 10% or more of its sales are as follows:

Year ended December 31,	2005		2006		2007
A	$	257,595	$	195,476	$	N/A
B		121,369		163,712		157,891
C		80,354		141,977		123,858
D		N/A		N/A		84,555
	$	459,318	$	501,165	$	366,304

16.	Subsequent event
	On February 26, 2007, the Company entered into a share purchase agreement with an independent third party, pursuant to which the Company agreed to sell its entire interest in JIC Technology to this independent third party for a cash consideration of approximately $51,100. The sale was completed on March 4, 2008.

F-36

SCHEDULE 1
NAM TAI ELECTRONICS, INC.
STATEMENTS OF INCOME
(In thousands of US dollars)

	Year ended December 31,
	2005			2006			2007
General and administrative expenses*	$	(3,551	)	$	(3,459	)	$	(4,115	)
Other expense, net		(2,805	)		(2,798	)		(3,078	)
Gain on sales of subsidiaries’ shares		10,095			—			390
Gain on disposal of an affiliated company		3,631			—			—
Losses arising from judgement to reinstate redeemed shares		—			(14,465	)		—
Interest income		4,660			7,247			4,493
Income (loss) before income taxes		12,030			(13,475	)		(2,310	)
Income taxes		—			—			—
Income (loss) before equity loss of an affiliated company and share of net profits of subsidiaries, net of taxes		12,030			(13,475	)		(2,310	)
Equity loss of an affiliated company		(186	)		—			—
Share of net profits of subsidiaries, net of taxes		39,462			54,231			71,813
Net income	$	51,306		$	40,756		$	69,503

* Amount of share-based conpensation expense included in general and administrative expenses      $—                     $597                   $268

F-37

SCHEDULE 1
NAM TAI ELECTRONICS, INC.
BALANCE SHEETS
(In thousands of US dollars)

	December 31,
	2006		2007
ASSETS
Current assets:
Cash and cash equivalents	$	117,632	$	74,049
Prepaid expenses and other receivables		989		11
Loan to a subsidiary — current		—		25,953
Amounts due from subsidiaries		44		44
Total current assets		118,665		100,057
Equipments, net		2		4
Loan to a subsidiary — non-current		—		285,478
Investments in subsidiaries		219,648		(41,992	)
Other assets		239		264
Total assets	$	338,554	$	343,811
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accrued expenses and other payables	$	2,069	$	2,682
Dividend payable		16,639		9,509
Amounts due to subsidiaries		2,752		1,439
Total liabilities		21,460		13,630
Shareholders’ equity:
Common shares ($0.01 par value — authorized 20,000,000 shares)		438		448
Reinstatement of redeemed shares		17,159		—
Additional paid-in capital		264,393		281,895
Retained earnings		25,030		47,846
Accumulated other comprehensive income (loss)		10,074		(8	)
Total shareholders’ equity		317,094		330,181
Total liabilities and shareholders’ equity	$	338,554	$	343,811

F-38

SCHEDULE 1
NAM TAI ELECTRONICS, INC.
STATEMENT OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
(In thousands of US dollars, except share and per share data)

													Accumulated			Total
	Common		Common		Reinstatement			Additional					Other			Share-
	Shares		Shares		of redeemed			Paid-in		Retained			Comprehensive			holders'			Comprehensive
	Outstanding		Amount		shares			Capital		Earnings			Income (Loss)			Equity			Income
Balance at January 1, 2005		42,664,536	$	426	$	—		$	241,756	$	56,324		$	6,547		$	305,053
Shares issued on exercise of options		841,050		9		—			16,411		—			—			16,420
Net income		—		—		—			—		51,306			—			51,306		$	51,306
Share of subsidiaries’ equity transactions:
Unrealized loss of marketable securities		—		—		—			—		—			(5,352	)		(5,352	)		(5,352	)
Realization of loss upon disposals of marketable securities		—		—		—			—		—			(250	)		(250	)		(250	)
Foreign currency translation		—		—		—			—		—			73			73			73
Comprehensive income																			$	45,777
Cash dividends ($1.32 per share)		—		—		—			—		(56,859	)		—			(56,859	)
Balance at December 31, 2005		43,505,586	$	435	$	—		$	258,167	$	50,771		$	1,018		$	310,391
Shares issued on exercise of options		281,000		3		—			5,436		—			—			5,439
Equity-settled share-based payment		—		—		—			597		—			—			597
Reinstatement of redeemed shares		—		—		17,159			—		—			—			17,159
Net income		—		—		—			—		40,756			—			40,756		$	40,756
Share of subsidiaries’ equity transactions:
Equity-settled share-based payment		—		—		—			193		—			—			193
Unrealized gain of marketable securities		—		—		—			—		—			8,983			8,983			8,983
Foreign currency translation		—		—		—			—		—			73			73			73
Comprehensive income																			$	49,812
Cash dividends ($1.52 per share)		—		—		—			—		(66,497	)		—			(66,497	)
Balance at December 31, 2006		43,786,586	$	438	$	17,159		$	264,393	$	25,030		$	10,074		$	317,094
Reinstatement of redeemed shares		1,017,149		10		(17,159	)		17,149		—			—			—
Equity-settled share-based payment		—		—		—			268		—			—			268
Net income		—		—		—			—		69,503			—			69,503		$	69,503
Share of subsidiaries’ equity transactions:
Equity-settled share-based payment		—		—		—			85		—			—			85
Reserve shared by minority interests		—		—		—			—		(9,052	)		—			(9,052	)		(9,052	)
Unrealized gain of marketable securities		—		—		—			—		—			17,451			17,451			17,451
Disposal of marketable securities		—		—		—			—		—			(27,381	)		(27,381	)		(27,381	)
Foreign currency translation		—		—		—			—		—			(152	)		(152	)		(152	)
Comprehensive income																			$	50,369
Cash dividends ($0.84 per share)		—		—		—			—		(37,635	)		—			(37,635	)
Balance at December 31, 2007		44,803,735	$	448	$	—		$	281,895	$	47,846		$	(8	)	$	330,181

F-39

SCHEDULE 1
NAM TAI ELECTRONICS, INC.
STATEMENTS OF CASH FLOWS
(In thousands of US dollars)

	Year ended December 31,
	2005			2006			2007
Cash flows from operating activities:
Net income	$	51,306		$	40,756		$	69,503
Adjustments to reconcile net income to net cash provided by operating activities:
Share of net profit of subsidiaries, net of taxes		(39,462	)		(54,231	)		(71,813	)
Dividend income from subsidiaries		11,349			13,596			17,116
Gain on disposal of subsidiaries		(10,095	)		—			(390	)
Depreciation		1			1			1
Equity in loss of an affiliated company less dividend received		186			—			—
Loss arising from the judgment to reinstate redeemed shares		—			14,465			—
Share-based compensation expenses		—			597			268
Gain on disposal of an affiliated company		(3,631	)		—			—
Impairment of intangible assets		459			—			—
Changes in current assets and liabilities:
(Increase) decrease in prepaid expenses and other receivables		(128	)		(626	)		978
(Decrease) increase in accrued expenses and other payables		(20	)		(67	)		613
Net cash provided by operating activities		9,965			14,491			16,276
Cash flows from investing activities:
Proceeds on disposal of subsidiaries		25,219			—			49,002
Proceeds on disposal of an affiliated company		6,494			—			—
Acquisition of subsidiaries’ shares		—			(3,130	)		(62,755	)
Decrease in amounts due from subsidiaries		27,669			41,824			—
Purchase of equipment		—			—			(3	)
(Increase) decrease in other assets		(40	)		143			(25	)
Net cash provided by (used in) investing activities		59,342			38,837			(13,781	)
Cash flows from financing activities:
Increase (decrease) in amounts due to subsidiaries		10,774			(8,022	)		(1,313	)
Proceeds from shares issued on exercise of options		16,420			5,439			—
Dividend paid		(47,622	)		(64,215	)		(44,765	)
Net cash used in financing activities		(20,428	)		(66,798	)		(46,078	)
Net increase (decrease) in cash and cash equivalents		48,879			(13,470	)		(43,583	)
Cash and cash equivalents at beginning of year		82,223			131,102			117,632
Cash and cash equivalents at end of year	$	131,102		$	117,632		$	74,049

F-40

SCHEDULE 1
NAM TAI ELECTRONICS, INC.
NOTE TO SCHEDULE 1
(In thousands of US dollars)

Schedule 1 has been provided pursuant to the requirements of Rule 12-04(a) and 4-08(e)(3) of Regulation S-X, which require condensed financial information as to financial position, changes in financial position and results and operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25 percent of consolidated net assets as of end of the most recently completed fiscal year. As of December 31, 2007, $249,720 of the restricted capital and reserves are not available for distribution, and as such, the condensed financial information of the Company has been presented for the years ended December 31, 2005, 2006 and 2007.

During the years ended December 31, 2005, 2006 and 2007, cash dividends of approximately $11,349, $13,596 and $17,116, respectively, were declared and paid by subsidiaries of the Company.

F-41

EX-4.15

Exhibit 4.15

THIS AGREEMENT is made on the 6th day of February 2007

BETWEEN :-

(1) Zastron Precision -Flex (Wuxi) Company Limited (“the Company”) a company incorporated in the People’s Republic of China whose registered office is situate at Land Lot No. A64-2, Meicun Gongye Jizhongqu, Wuxi Xinqu, the People’s Republic of China and

(2) LEVETT AND BAILEY QUANTITY SURVEYORS LIMITED (“the Consultant”), a company incorporated in Hong Kong whose registered office is situate at Eastern Central Plaza, 20th Floor, 3 Yiu Hing Road, Shaukeiwan, Hong Kong.

WHEREAS :

A. The Company is the owner of the Site and is desirous of constructing thereon a flexible print circuit factory facility (“the Development”) at Land Lot No. A64-2, Meicun Gongye Jizhongqu, Wuxi Xinqu, the People’s Republic of China which for the purposes of identification only is set out in the plan and coloured in blue at Schedule 2.

B.  The Company is desirous of appointing the Consultant to carry out all quantity surveying services for the Company for the Project and all Construction Contracts with various contractors to complete the works comprising the Development.

NOW IT IS AGREED as follows :-

1.	INTERPRETATION
1.1	In this Agreement (including the recitals, the Schedules and the Annexures):

(a)	“Additional Services” mean any and all services which do not constitute part of the Services but which a firm of quantity surveyors of substance and repute ought, in the reasonable opinion of the Company, to be capable of performing;
(b)	“Architect” means the architect engaged by the Company to design the Works or its successors.
(c)	“Confidential Information” means any information, document or material received or obtained as a result of negotiating, entering into or performing this Agreement and any information, document or material given in or created pursuant to this Agreement;
(d)	“Consents” mean permissions, consents, approvals, licences, authorizations, registrations, certificates and permits in legally effective form;

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(e)	“Construction Contracts” mean all such contracts entered into by the Company for the construction of the Works including but not limited to piling and foundation contracts, contracts for the construction of the superstructure of the Works, and contracts for the electrical and mechanical works of the Works.
(f)	“Contractors” mean such persons or body corporates engaged under the Construction Contracts to carry out the Works.
(g)	“Copyright” means patent trademark, service mark, registered design, copyright or design right or any right similar or analogous to any of the foregoing or any right or interest of any kind arising out of or created in respect of any of the foregoing or any right to bring an action for passing off or any similar or analogous proceeding;
(h)	“Government” means the Government of the People’s Republic of China and its successors;
(i)	“Project” means the Project involving the design, formation, construction, completion, commissioning, maintenance and initial operation of the Development;
(j)	“Project Manager” means the project manager for the time being appointed by the Company to manage and administer the construction of the Project and the Works or its successors.
(k)	“Services” mean all the functions, duties, obligations and services to be performed by the Consultant under this Agreement including those referred to in the Schedule 1;
(l)	“Site” means the area of land coloured in yellow on the plan attached hereto as Schedule 2.
(m)	“Working Day” means a day other than a Saturday on which commercial banks in the People’s Republic of China are open for business;
(n)	“Works” mean all the works or services to be constructed, completed, maintained, supplied and/or performed under the Construction Contracts to complete the Project and includes all permanent works, temporary works and all design for which any Contractor is responsible under any of the Construction Contracts.

1.2 In this Agreement (including the Recitals, the Schedules and the Annexures) unless the context requires otherwise :-

(a)	any reference to a Clause or a Clause is to clause or Clause of this Agreement and any reference to a Schedule, an Annexure or a Recital is to a schedule, annexure or recital to this Agreement;
(b)	any headings are for convenience only and shall not affect interpretation or construction;

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(c)	references to a “person” shall be construed so as to include any company, corporation or body corporate, any individual, firm, government or governmental body any state or agency of a state, or any joint venture, association or partnership (whether or not having separate legal personality);
(d)	words and expressions in the singular include the plural and words and expressions in the plural include the singular;
(e)	words and expressions importing the masculine, feminine or neuter gender only include all such genders;
(f)	“expenses” include costs, fees, charges, overheads and expenses of every description;
(g)	“law” includes statutory, common and customary law and any constitution, basic law, decree, judgement, legislation, order, ordinance, regulation, rule, statute, treaty or other legislative measure, in each case of any jurisdiction whatever (and “lawful and unlawful” shall be construed accordingly);
(h)	references to (or to any specific provision of) this Agreement or any other document shall be construed as references to this Agreement, that document or that provision of this Agreement that document as modified, amended or supplemented from time to time:
(i)	references to any ordinance, enactment, rule, law or regulation include such ordinance, enactment, rule, law or regulation as amended, modified, consolidated, enacted or re-enacted and include any subsidiary legislation made thereunder;
(j)	“document” includes information recorded in any form;

2.	SERVICES
2.1	Notwithstanding the date of this Agreement as first above written, this Agreement shall take effect and be construed as if it had been entered into on the date upon which the Consultant first commenced to perform the Services.
2.2	The Consultant shall perform the Services in accordance with the terms of this Agreement and to the satisfaction of the Company.
2.3	The Company may at any time require the Consultant to perform Additional Services in connection with the Project and in the event that it is required so to do the Consultant shall perform Additional Services in accordance with this Agreement.
2.4	The Consultant’s remuneration for the performance of Additional Services shall be as provided in Schedule 3 or at the option of the Company be such lump sum agreed by the Company and the Consultant.
3.	STANDARDS

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3.1 The Consultant confirms to the Company that it possesses a high level of expertise and experience in relation to the Services and Additional Services and the performance thereof and acknowledges :-

(a)	that the Company has entered into this Agreement in reliance on the Consultant having before the date of this Agreement represented to the Company that it has such level of expertise and experience; and
(b)	that the Company relies on the Consultant’s expertise and experience in performing the Services and Additional Services.

3.2 The Consultant shall perform the Services and Additional Services it is required to perform with a high degree of skill, care and diligence having particular regard to the level of expertise and expedience warranted in Clause 3.1.

3.3 The Consultant shall perform the Services and Additional Services it is required to perform efficiently, faithfully, conscientiously and expeditiously and in such manner as to avoid any delay in the progress of the execution of the Works, the Project and/or any part thereof.

3.4 The Consultant shall perform the Services and Additional Services it is required to perform such that it shall not in any way whatsoever cause or contribute to any breach by the Company, its servants or agents of its or their functions, obligations or duties under any of the Construction Contracts nor in any way whatsoever cause or contribute to any claim, proceeding, liability, loss, expense or damage of whatsoever nature to the Company, its servants or agents arising under the terms thereof nor in any way whatsoever prevent the Company from or impede the Company in complying timeously with the provisions of any of the Construction Contracts nor in any way whatsoever prevent the Company from or impede the Company in obtaining all benefits under the Construction Contracts.

4.	PERSONNEL
4.1	The Consultant shall at all times employ and utilise in the performance of the Services and the Additional Services such sufficient number of staff having regard to the minimum requirements as set out in Schedule 3, all of whom shall possess suitable qualifications, expertise and experience, as is necessary for the performance of the Services in accordance with this Agreement, and subject to the provisions of Clause 4.3 shall ensure that there is made available to all such staff all necessary resources, facilities and support.
4.2	If in the opinion of the Company the performance or conduct of any person for the time being appointed to carry out the Services or Additional Services or has been unsatisfactory the Company may, after consulting the Consultant, require that such person is forthwith removed by the Consultant from the position which he holds and the Consultant shall promptly provide a replacement subject to obtaining the written consent of the Company.
4.3	If in the opinion of the Company the staff or any element of the staff utilised by the Consultant in the performance of the Services are inadequate, whether by reason of lack of numbers, lack of suitable qualifications, expertise or experience or otherwise, the

-5-

Company may, after consulting the Consultant, require the Consultant to forthwith at no additional cost employ and utilize in the performance of the Services and the Additional Services such additional and/or more or differently qualified, expert or experienced staff as the Company reasonably considers to be necessary.

4.4 If the Consultant fails within a reasonable time to comply with any requirement of the Company under Clause 4.3 then the Company may, either itself, or as agent for the Consultant, employ on such terms and conditions as the Company thinks fit such number of staff possessing such qualifications, expertise and experience as the Company considers necessary and may require the Consultant to utilise all or any of such staff in the performance of the Services.

4.5 The Company may deduct from any sum due to the Consultant under this Agreement any cost or liability incurred by the Company in connection with the employment of any person employed pursuant to Clause 4.4.

5.   FEES

5.1 Subject to the Consultant performing the Services in accordance with this Agreement and observing and performing every other obligation it may have under this Agreement, the Company shall pay the Consultant for the performance of the Services in accordance with the provisions of Schedule 4.

5.2 Except only as provided in Clause 5.2, the Consultant’s entitlement under Clause 5.1 shall be the Consultant’s total and only entitlement to payment (including payment by way of reimbursement) for or in respect of:

(a)	performance, whether before or after the date of this Agreement, of the Services (and the Consultant shall not be entitled to any other or additional payment on a quantum meruit basis or otherwise for any cause or in any circumstances whatsoever); and
(b)	all and any expenses incurred by the Consultant or on its behalf, whether before or after the date of this Agreement, in or for the purpose of the performance of the Services or otherwise in connection with the Services, the Works and/or this Agreement.

6.   CO-OPERATION

6.1 The Consultant shall timeously comply with all instructions and directions given by the Company in relation to the Services and the Additional Services or the performance thereof. The Consultant shall co-ordinate the performance of the Services (and Additional Services) with any other consultant separately appointed by the Company in respect of the Works. Without prejudice to the foregoing, the Consultant shall obtain all necessary drawings, documentation and information relating to the Works from such other consultants to enable the Consultant to perform his obligations under this Agreement.

6.2 The Consultant shall pro-actively and to the satisfaction of the Company keep the Company fully informed at all times of all matters relating to or arising from the Services or the performance thereof and, so far as the same are within the knowledge of the

-6-

Consultant, of all matters relating to or arising from the Works and/or the Project and/or the execution of either or both of the same of which it is in the interest of the Company to be informed or of which the Company requires to be informed, including but without limitation any matter referred to in Clauses 6.5(a) to (b).

6.3 The Consultant shall co-operate fully with the Contractors and provide the Contractors timeously with such documents, advice, information, materials and assistance as the Contractors may reasonably require for or in connection with the performance of the Construction Contracts.

6.4 The Consultant shall attend such meetings and prepare and supply such reports, documents, information, materials, advice and assistance in relation to the Services, the Works and/or the Project and/or the performance or execution of any or all of the same as the Company may require.

6.5 Without prejudice or limitation to the foregoing provisions of this Clause and as a minimum requirement which must be met in any circumstances, the Consultant shall at such intervals as the Company shall reasonably require :-

(a)	attend with the Company and such other persons as the Company may require progress meetings to be convened by the Company;
(b)	submit to the Company and such other persons as the Company may require progress reports;

6.6 The Consultant shall impart in every progress report submitted pursuant to Clause 6.5(b) and shall be properly prepared to discuss and impart at every meeting convened pursuant to Clause 6.5(a) all such information, advice and assistance as may be necessary or desirable in the circumstances having particular regard to the provisions of Clause 6.2, or required by the Company and in any event every such report shall, and in every such meeting the Consultant shall be properly prepared to :-

(a)	detail and assess the actual progress of the performance of the Services and the Additional Services and the execution of the Works and the Project together with a comparison of such progress against the progress contemplated by the current programme;
(b)	anticipate and assess matters which may delay or render more costly than may have been anticipated by the Company the performance of the Services and the Additional Services or the execution of the Works and the Project together with advice as to the steps which have been or should be taken to minimize the likelihood of such events delaying or rendering more costly than may have been anticipated by the Company such performance or execution;
(c)	anticipate and assess the decisions which the Company should be considering making in relation to the Services and the Additional Services, the Works and/or the Project and/or the performance or execution of any or all of the same together with advice which will enable the Company to make such decisions in a timely and informed manner;

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(d) detail and assess the steps which the Consultant plans to take during the period from the date of the progress report up to the date or anticipated date of the next progress report.

7.   INSURANCE

7.1 Without in any way limiting its obligations or liabilities under this Agreement or at law, the Consultant shall maintain in full force and effect with a well-established, substantial and reputable insurance office or underwriter and in a form and upon terms and conditions approved by the Company professional indemnity insurance, providing a level of indemnity of not less than fifty million Hong Kong Dollars (HK$50,000,000.00) for any occurrence or series of occurrences arising out of any one event in respect of the liability of the Consultant to the Company or to any other person under this Agreement or in respect of any negligent act or omission of the Consultant or otherwise in respect of the Services, the Additional Services, the Works, the Project and/or the performance or execution of any or all of the same.

7.2 The Consultant shall ensure that the insurance referred to in Clause 7.1 is maintained in full force and effect throughout the period from the date of this Agreement until the expiration of 12 years after that date. Either in the same policy or additionally, the Consultant shall maintain sufficient insurance, for the like period, as would properly protect the Company against any claims by third parties in respect of the performance of the Works by the Consultant. If , for any reason, the Consultant fails to maintain the insurance referred to in Clause 7.1 the Consultant shall immediately inform the Company of this in writing and whether or not the Consultant does so inform the Company and without prejudice to any other rights and remedies of the Company, the Company may:-

(a)	if it considers that the cause of the Consultant’s failure is the unavailability of such insurance, require the Consultant at the Consultant’s own expense forthwith to enter into other arrangements satisfactory to the Company; or
(b)	whether or not it considers that the cause of the Consultant’s failure is the unavailability of such insurance, take out and maintain in force such insurance and pay such premium or premiums as may be necessary for that purpose and from time to time deduct the amount so paid from any monies due or which may become due to the Consultant or recover the same as a debt due from the Consultant.

7.3 As and when the Consultant is required to do so by the Company, the Consultant shall produce evidence satisfactory to the Company that the Consultant’s obligations under this Clause at all times have been and are being complied with.

8.   CONFIDENTIALITY

8.1 Except as may be reasonably necessary for the purposes of performing the Services in accordance with this Agreement, no Confidential Information shall be disclosed by the Consultant to any person or used by the Consultant for any purpose without the prior written consent of the Company

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8.2 Without prejudice to the generality of Clause 8.1 the Consultant shall not without the prior written consent of the Company publish alone or with any other person any articles, advertisements, photographs, other illustrations or any other information relating in any way to the Services and the Additional Services, the Works or the Project.

8.3   Clause 8.1 shall not prevent the Consultant from making for a proper purpose disclosure :-

(a)	to the Consultant’s auditors or to the Consultant’s lawyers, banker or other professional advisors;
(b)	required by law; or
(c)	necessary or desirable for the conduct of any arbitration under Clause 20 or in any legal proceedings before a court of law.

8.4  The Consultant acknowledges and agrees that damages or an account of profits will not be an adequate remedy for any breach of this Clause 8 and that to prevent a breach or a continued breach of this clause the Company shall be entitled to an injunction.

8.5  The restrictions contained in this Clause shall continue to apply after the termination of this Agreement without limitation in time.

9.   TERMINATION

9.1 The Company may at any time require the Consultant permanently to cease the performance of all or any part of the Services or the Additional Services by giving notice in writing to that effect to the Consultant specifying the Services or the Additional Services, the performance of which is to be ceased and the time when such cessation is to take effect. A notice requiring the Consultant to cease performance of all of the Services and the Additional Services shall operate to terminate this Agreement with effect on the date on which the cessation is specified to take effect.

9.2 The Company may at any time require the Consultant to suspend the performance of all or any part of the Services or the Additional Services by the Consultant by giving notice in writing to that effect to the Consultant specifying the Services or the Additional Services, the performance of which is to be suspended and the time when such suspension is to take effect.

9.3 Subject to Clause 9.4, the Company may at any time require the resumption of the performance of any or all Services or the Additional Services, the performance of which has been suspended, by giving notice in writing to that effect to the Consultant specifying the Services or the Additional Services, the performance of which is to be resumed and the time when such resumption is to take effect and in such circumstances the Consultant shall be entitled to be paid by the Company such sum as the Company considers to be equal to the additional cost reasonably and necessarily incurred by the Consultant for the purpose of resuming performance of the Services or the Additional Services.

9.4 If the Company does not within a period of 365 Working Days require the resumption of the performance of any Services or the Additional Services, the performance of which

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the Company has required the Consultant to suspend, then upon the expiry of such period the Company will be deemed to have required the Consultant to cease the performance of such Services or the Additional Services.

9.5  If the Company fails to pay any sum due to the Consultant within a period of 50 Working Days after it has become due, then the Consultant shall be entitled by registered post to give the Company 14 Working Days’ notice in writing specifying the breach and requiring the Company to rectify the same within such period of notice and if upon the expiry of such notice, such default still persists, the Consultant may within 7 days thereafter be entitled to give notice in writing by registered post to the Company to forthwith terminate this Agreement.

9.6  If the Consultant fails to comply with any term of this Agreement, the Company shall be entitled by registered post to give 14 Working Days’ notice to the Consultant specifying the breach and requiring it to rectify the same within such period of notice and if upon the expiry of such notice, such default still persists, the Consultant may within 7 days thereafter be entitled to give notice in writing by registered post to the Company to forthwith terminate this Agreement.

10.   EFFECT OF TERMINATION

10.1 If the Company requires the Consultant to cease performance of all of the Services and the Additional Services or to suspend the performance of all of the Services and the Additional Services and the Company’s decision to require the cessation or suspension was not made because of, inter alia, any breach by the Consultant of any of its obligations under this Agreement or because the Company had reasonable grounds to suspect the Consultant might be or become unable to perform the Services or the Additional Services or if the Consultant terminates this Agreement pursuant to Clause 9.5, then the Consultant shall be entitled to payment pursuant to Clause 5.1 of such sum as the Company considers to be fair and reasonable having regard to the nature and extent of the Services and the Additional Services performed between the time at which the last payment was made to the Consultant pursuant to Clause 5.1 and the time of the cessation or suspension.

10.2 If the Company requires the Consultant to cease performance of any part of the Services or the Additional Services, then with effect from the date on which the cessation is specified to take effect the Consultant shall be entitled to payment pursuant to Clause 5.1 only to such extent as the Company considers to be fair and reasonable having regard to the nature and extent of those parts of the Services and the Additional Services which are continuing.

10.3 If the Company requires the Consultant to suspend performance of any part of the Services or the Additional Services, then with effect from the date on which the suspension is specified to take effect until such date (if any) as the Company requires the Consultant to resume performance of all of such Services and the Additional Services the Consultant shall be entitled to payment pursuant to Clause 5.1 only to such extent as the Company considers to be fair and reasonable having regard to the nature and extent of those parts of the Services and the Additional Services which are continuing.

10.4 If the Company requires the Consultant to cease performing or to suspend performance of any or all of the Services or the Additional Services or if this Agreement is terminated

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pursuant to Clause 9.5 or 9.6, then the Consultant shall immediately take such action as may be necessary or desirable to bring to an end in an orderly manner the Services and Additional Services, the performance of which is thereby suspended or ceased but, in the case of suspension, in such a manner that the performance of the Services and the Additional Services may be resumed as soon as possible with the minimum possible additional cost if a notice requiring the resumption thereof were given by the Company and unless the Company’s decision to require the cessation or suspension was made because of, inter alia, any breach by the Consultant of any of its obligations under this Agreement or because, inter alia, the Company had reasonable grounds to suspect that the Consultant may be or become unable to perform the Services or the Additional Services, then the Consultant shall be entitled to be paid by the Company such sum as the Company considers to be the additional cost reasonably and necessarily incurred by the Consultant for the purpose of taking the actions referred to above in respect of the Services and the Additional Services whose performance have been ceased or suspended.

10.5 If the Company requires the Consultant to cease performing or to suspend performance of any or all of the Services or the Additional Services or if this Agreement is terminated pursuant to Clause 9.5 or 9.6 then, unless the Company otherwise requires, the Consultant shall deliver and make available to the Company or as the Company may direct all documents, information, property and materials of the Company and all documents, information, property and materials which are in the ownership, possession, custody or control of the Consultant or any sub-contractor of the Consultant or any of their respective servants, agents or delegates and which relate to the Services, the Additional Services, the Works and/or the Project and/or the performance or execution of any or all of the same and shall give all such assistance and advice as the Company may request to effect a smooth handover to the Company or any other person authorized by it. The Consultant expressly waives any lien or other right it might have to retain possession or ownership of any such information, property, materials, documents and designs pending payment of any amounts due to it hereunder.

10.6 Without prejudice or any limitation to Clause 10.5, if this Agreement is terminated pursuant to Clauses 9.5 or 9.6, the Copyright in all documents, data, calculations, software, materials, knowhow and information in relation to the Services, Additional Services, the Works and/or the performance or execution of any or all of them which have been or may in future be prepared, used or required by or in the possession, custody or control of the Consultant shall become the absolute property of and shall be assigned to the Company.

10.7 The termination of this Agreement shall be without prejudice to all rights and liabilities of the parties accrued up to the time of termination.

11.	LIMITATIONS ON AUTHORITY
	It is acknowledged and agreed that the Company may require certain express limits upon the authority of the Consultant to be inserted in the Construction Contracts. The Consultant will strictly observe any and all such limits and shall promptly seek the authority of the Company for any instruction or any other act or omission which is not within such limits.

12.   INDEMNITY

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The Consultant shall indemnify and keep indemnified the Company from and against any loss, cost (including any cost of enforcement), liability, damage, claim or proceeding of whatsoever nature which the Company incurs or suffers as a direct consequence of or in connection with or arising out of any act, negligent act, or omission on the part of the Consultant, its sub-contractors, delegates, servants or agents resulting in :-

(a)	Any breach by the Consultant, its servants, agents, delegates or sub-contractors of this Agreement;
(b)	Any breach of any warranty given in this Agreement by the Consultant;
(c)	Any person employed by the Company pursuant to Clause 4.4.

13.   ASSIGNMENT AND SUBLETTING

13.1 Except as may be permitted under Clause 13.2, the Consultant may not :-

(a)	assign all or any part of the benefit of, or its rights or benefits under, this Agreement;
(b)	sub-contract or delegate all or any part of the Services.

13.2 The Consultant shall obtain the prior written permission of the Company to :-

(a)	the sub-contracting or further sub-contracting of any part of the Services;
(b)	the replacement of any person to whom any part of the Services has been sub-contracted or further contracted.

13.3 No sub-contracting or delegation by the Consultant nor permission therefor by the Company shall relieve the Consultant from any functions, duties, obligations or liabilities under this Agreement or law and the Consultant shall be liable and responsible for the acts, omissions, defaults and neglects of any sub-contractor or delegate and of any sub-contractor’s or delegate’s servants or agents as fully as if they were the acts, omissions, defaults or neglects of the Consultant.

13.4 The Company may assign all or any part of the benefit of, or its rights and benefits under, this Agreement.

13.5 The Company may delegate to any person all or any of its rights, powers, authorities and/or discretions under this Agreement. Any such delegation may be made on such terms and conditions as the Company may think fit (including power to sub-delegate) and shall be notified to the Consultant in writing.

14.	ENGLISH LANGUAGE
	This Agreement is drawn up in English which language shall be the ruling language in which this Agreement shall be construed and interpreted. All correspondence, notices, other written communication and documents given, entered into or prepared under or in connection with this Agreement shall, unless the Company directs otherwise, be in English.

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15.	INVALIDITY
	If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect that shall not affect the legality, validity or enforceability of any other provision of this Agreement.
16.	WAIVERS
16.1	The exercise by the Company of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
16.2	No failure on the part of the Company to exercise, nor any delay or failure of the Company in exercising any right, power or remedy provided by law or under this Agreement shall impair or operate as a waiver of such right, power or remedy.
16.3	The rights powers and remedies of the Company provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.
17.	AMENDMENTS AND CONSENTS
17.1	Any provision of this Agreement may be amended or supplemented if the Company and the Consultant so agree in writing signed by the Company and the Consultant or pursuant to a right of the Company under this Agreement.
17.2	Any waiver by the Company of any provision of this Agreement or of any right, power or remedy provided by law or under this Agreement shall not be effective unless in writing signed by the Company and containing an express statement that it is a waiver pursuant to this Clause.
17.3	No obligation or liability of the Consultant under or arising from or in connection with this Agreement shall be relieved, released or diminished by :-

(a)	any licence, consent, permission or approval given or withheld by or on behalf of the Company or by any requirement imposed as a pre-condition to the giving of any licence, consent, permission or approval or any condition subject to which any licence, consent, permission or approval is given;
(b)	the receipt by the Company or any of its advisers of any documents, materials or information;
(c)	the payment to the Consultant of any sum under this Agreement;
(d)	any checking certification, approval or other act or omission of any person appointed pursuant to any of the Construction Contracts or otherwise as a design or quantum checker, checking engineer or quantity surveyor or other person whose duties involve any form of checking, certification and/or approval;

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(e)	any independent enquiry into any relevant matter that may be made or carried out by or for the Company;
(f)	the appointment by the Company of its own advisers or the enquiries made by such advisers into any matter;
(g)	any requirement of, or any direction or instruction given by or on behalf of the Company;
(h)	any document, information or material supplied to the Consultant by or on behalf of the Company or any other person; and/or
(i)	any act, omission, neglect or default of any of the Contractor;
(j)	any Contractor or other person making any contribution to, relying on, using, taking over, completing, giving any warranty or assurance in respect of or assuming or having any obligation or liability in respect of any design, drawing, plan, detail, specification, calculation, software, requirement, model, material, knowhow, information, document, matter or thing whatsoever which the Consultant has prepared, generated, created or in any way contributed to.

17.4 The Consultant acknowledges that the Company shall be under no obligation to check in any way any document, information, advice, assistance, materials or matter prepared, supplied or undertaken by the Consultant and may rely on any of the same without doing so.

18.   NOTICES

18.1 All notices given or made under this Agreement and any other communications which under this Agreement are to be in writing shall be addressed as provided in Clause 18.2 and, if so addressed, shall be deemed to have been duly given or made as follows -:

(a)	if sent by personal delivery, upon delivery at the address of the relevant party;
(b)	if sent by post, upon delivery seven clear Working Days after the date of posting; and
(c)	if sent by facsimile, when despatched.

18.2 The relevant addressee, address and facsimile number of the Company and the Consultant for the purposes of this Agreement, subject to Clause 18.3 are:-

Name of party	Address	Facsimile No.
COMPANY :-
Zastron Precision	c/o Zastron Electronic	Tel No. (86755) 27492297
— Flex (Wuxi) Co	(Shenzhen) Co Ltd.	(852) 23410273
Ltd	Gu Su Industrial Estate,
	Xixiang, Baoan, Shenzhen	Fax No. (86755) 27496132

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Name of party	Address	Facsimile No.
	PRC, Postal Code 518126	(852) 22631223
Contact person(s):	Ms. Patinda Lei / Mr. Joseph Li
CONSULTANT :-
Levett and Bailey	Eastern Central Plaza,	Tel No. (852) 2823 1823
Quantity	20th Floor,	Fax No. (852) 2884 9913
Surveyors Limited	3 Yiu Hing Road,
	Shaukeiwan, Hong Kong.
Contact person(s):	Mr. Kenneth Kwan Kin / Mr. K.M. Chau

18.3 A party may notify the other party to this Agreement of a change to its name, relevant addressee, address or facsimile number for the purposes of Clause 18.2 provided that such notification shall only be effective on :-

(a)	the date specified in the notification as the date on which the change is to take place; or
(b)	if no date is specified or the date specified is less than two clear Working Days after the date on which notice is given, the date following two clear Working Days after notice of any such change has been given.

19.

ENTIRE AGREEMENT

This Agreement constitutes the whole and only agreement between the parties relating to the Services, the Works and/or the Project and/or the performance or execution of any or all of the same and, except to the extent repeated in this Agreement and except for the representations referred to in Clause 3.1(a), supersedes and extinguishes any prior agreements, undertakings, representations, warranties, promises and arrangements of any nature whatsoever, whether or not in writing, relating thereto.

20.

ARBITRATION

20.1

If any dispute or difference of any kind whatsoever shall arise between the Company and the Consultant in connection with or arising out of this Agreement or the performance of the Services and/or Additional Services whether during the performance of the Services and/or Additional Services or after completion thereof and whether before or after the termination, abandonment or breach of this Agreement, the Company and the Consultant shall endeavour in good faith to resolve it by amicable negotiations and if it is resolved shall record the terms on which it is resolved in a statement signed by both parties. Unless this Agreement shall have been already terminated or abandoned the Consultant shall in every case continue to perform the Services and/or Additional Services in accordance with this Agreement. If no such statement is signed by both parties within a period of 90 days from the date on which such negotiations commenced then either the Company or the Consultant may require that the matter shall be referred to arbitration in accordance with and subject to the provisions of the Arbitration Ordinance and any such reference shall be deemed to be a submission to arbitration

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within the meaning of such Ordinance. Save in a case where the Company has required the Consultant to cease performing all the Services and/or Additional Services prior to completion thereof, no steps shall be taken in the reference to the arbitrator until after the completion or alleged completion of the performance of the Services and/or Additional Services unless with the written consent of the Company and the Consultant. The arbitrator shall have the power to hear concurrent disputes with third parties which relate to the same matter of facts in dispute between the parties to this Agreement. The venue of the arbitration shall be in Hong Kong at the Hong Kong International Arbitration Centre.

21.	GOVERNING LAW
	This Agreement shall be governed and construed in accordance with the laws of the Hong Kong Special Administrative Region of the People’s Republic of China.

IN WITNESS WHEREOF the parties hereunto have caused this Agreement to be executed the day and year first above written.

Signed by Ms. Lei Lai Fong, Patinda	)
For and on behalf of Zastron Precision -Flex	)
(Wuxi) Company Limited	)
with the Company Seal	)
was hereto affixed and delivered in the presence	)
of :-	)
Signed by Mr. Kenneth Kwan Kin	)
For and on behalf of Levett and Bailey Quantity	)
Surveyors Limited with the Company Seal was hereto	)
affixed and delivered in the presence of :-	)

SCHEDULE 1 : SCOPE OF SERVICES

The scope of services to be provided by the Consultant shall be :-

PART A : PRE-CONTRACT SERVICES

1.	Generally
1.1	Attend and contribute to meetings on design, tendering procedures (if required) and contract arrangements. Provide early cost advice to outline design options.
2.	Tendering for Architect and Project Manager
2.1	Suggesting name of potential candidates for Architect and Project Manager and issuing invitation letter to potential candidates for Architect and Project Manager.
2.2	Preparing draft tender documents based on Company’s requirements for the Company’s comments, incorporating the Company’s comments and preparing formal tender documents.
2.3	Prepare tender reports on the financial and contractual aspects on the returned tenders.
2.4	Attend meetings for tender preparation, tender opening and tender assessments.
3.	Preliminary Estimate and Cost Plan
3.1	Prepare preliminary approximate estimates and to establish a cost budget based on the initial conceptual design. Revise and refine as necessary.
3.2	Prepare estimated cash flow of the construction expenditure based on the preliminary programme.
3.3	When the design has been developed and approved, prepare a cost plan, to be in cost elemental form and based partly upon statistics applied to unit areas of accommodation and partly upon approximate quantities measured from drawings. This will be a two or three stage exercise with re-adjustment to suit the Company’s budget requirements and the Architect’s design intent and bring the cost plan to an acceptable budget.
3.4	A cash flow prediction will also be prepared based upon the accepted cost plan.
3.5	Preparing and updating the cash flow estimate and cost report from the detailed estimate and project programme showing the estimated amount of monthly expenditure throughout the construction period.
3.6	During the planning stage, carry out cost studies and provide cost advice on various options relating to finishes, materials and construction methods as may be required by the Architect.
3.7	Preparing more detail preliminary estimates based on the preliminary design drawings, allocating costs to the functional parts of the building so that the Company can see where the money will be spent and to modify planning accordingly to maintain the cost budget.

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3.8	Advising on arrangement of contract packages and tending / contracting strategies.
3.9	Attending co-ordination meetings and advising the Company for any possible essential major extras. Attending meetings in Wuxi by personnel from Wuxi, Shanghai and/or Hong Kong as necessary.
3.10	Updating the estimates as planning and progresses and providing all cost advice necessary to the Company and to enable the Company to plan within the cost budget.
4.	Programming
4.1	Assisting the Architect in preparing the master development programme and provide input as and when necessary.
5.	Tender Documents (if required)
5.1	Drafting and advising on the most suitable form and wording of the Conditions of Contract for use in the Construction Contracts for consideration by all parties concerned and co-ordinate as appropriate.
5.2	When detailed drawings have been developed and approved, prepare Bills of Quantities (if required) for the Construction Contracts. Technical Specifications, which are to be prepared by other project consultants, will be inserted into the tender documents (if required) of the Construction Contracts as appropriate.
5.3	Preparing all such bills of quantities, schedules, drawings, estimates of costs, forms of tender (if required), conditions of tender, contracts, conditions of contract and incorporating the specifications, drawings, design requirements and other documents and do all such other acts, matters and things as may be necessary or required by the Company to enable the Company to invite tenders (if required) or quotations or otherwise place orders for the Works and all parts thereof.
6.	Providing advice as to prevailing conditions for competitive tenders (if required) at the time of going to tender (if required) or for quotations submitted by the Contractors.
7.	Assisting the Architect in compiling lists of tenderers (if required) for the Construction Contracts.
8.	Pricing of Bills of Quantities
8.1	When required by the Company, price the completed Construction Contract Bills of Quantities to form a pre-tender estimate, report this to the Company and if necessary to propose modifications prior to the date set for receipt of tenders (if any).
9.	Tender (if any) or Quotation Analysis and Report
9.1	Scrutinize the tenders (if any) or quotations received and carry out a detailed check to identify any errors in arithmetic and inconsistent pricing.

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9.2	Particular attention will be paid to analyzing the pricing strategy of the tenderers (if any) or the Contractors and advising the Company on action required. This will form the subject of a report to be sent with the Consultant’s recommendations for any amendments which are considered appropriate prior to the award of a Contract.
10.	Contract Clarification and Award
10.1	Review, assess and assist, advise and report to the Company in relation to all tenders (if any) or quotations received and the negotiation and selection of tenders (if any) or quotations for acceptance, clarifying both the terms and pricing of the tenders (if any) or quotations and subsequently assist in drafting the letter of intent or letter of acceptance.
10.2	Assist in any post-tender (if any) clarification meetings and collate records of relevant matters arising for incorporation as necessary into the contract documents.
11.	Contract Document
11.1	Subsequent to the award of each tender (if any) or the Construction Contracts to compile formal contract documents by the Company and Contractors.
11.2	Providing cost and contract advice on the specifications provided by others.

PART B : POST-CONTRACT SERVICES

1.	Cost Control
1.1	At regular intervals prepare a Financial Statement showing approved budget allowances against estimated actual amounts.
1.2	Actual expenditure amounts will be further broken down into amounts committed and amounts estimated or which are in the nature of contingencies.
1.3	All major changes in commitments will be highlighted in the Financial Statements.
1.4	Should major variations be proposed between the dates for the Financial Statements, these will be valued in approximate terms and advised on for implementation.
1.5	A revised estimate of cash flow will be prepared for each Financial Statement.
1.6	Commenting on the insurance policies and performance bonds submitted by the Contractors.
1.7	Advising the design team on the appropriate cost effect of variations under consideration when requested.
1.8	Assisting the Architect in contract administration on cost and contractual matters.
2.	Contract Administration

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2.1	Provide general advice on contract administration as and when necessary. Examining, commenting and reporting on insurance policies and performance bonds.
3.	Progress Payments
3.1	Value the works in progress, taking particulars and submit valuations to the Architect for certifying payments on account to the Contractors. This shall be carried out at such intervals as to comply with the interim payment provisions in the Construction Contracts.
4.	Measurement of Variations
4.1	Variations will be evaluated as soon as practicable during the progress of the Works and agreed at that stage with the Contractors.
4.2	Advise the Company on the approximate cost effect of variations under consideration.
4.3	Measuring and preparing bills of variations to the Construction Contracts and pricing and agreeing the amounts of extras and credits with the Contractors.
4.4	Preparing progressive budgetary statements throughout the contract period showing the up-to-date financial commitment by adjusting the contract sums for variations to the Construction Contracts, adjustment of prime cost and provisional sums etc.
5.	Contractor’s Claim
5.1	Assess, evaluate and report on the contractual and financial implications of claims made by the Contractors.
5.2	Negotiate with the Contractors on claims and assist the Company to reach agreement with the Contractors.
6.	Final Accounts
6.1	When the Works have been completed, prepare, present and agree final accounts, which is a detailed statement of final cost of the Project with the Nominated Sub-Contractors, Nominated Suppliers and the Contractors as appropriate.
6.2	If applicable, prepare such final accounts for submission to the relevant government construction cost bureau for verification and validation. The Consultant shall assist to liaise and negotiate with the requisite authorities to attempt to agree on the same.
6.3	Within circumstances under control of the Consultant, the measurement and presentation to the Contractors of the Final Account will be completed within the Defects Liability Period.
6.4	Without prejudice or any limitation to the foregoing to timeously prepare a final account for the final construction cost of the Works for the purpose of allowing the Company to

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apply for the title deeds of the Works and to timeously procure the Contractors’ agreement to the same.

PART C : BUILDING SERVICES

The Consultant’s services in respect building services contracts or sub-contracts (i.e. mechanical and electrical services including plumbing and above ground drainage) (if any) shall be the same as those specified in PART A and B above save that schedules of rates will be prepared in lieu of bills of quantities for the tender (if any) and contract documents.

PART D : MEETINGS

Attendance at co-ordination meetings with consultants on contractual and cost issues and monthly site meetings. Meetings in Wuxi shall be attended by personnel from Wuxi, Shanghai and /or Hong Kong as and when required.

PART E

The Consultant acknowledges that given the magnitude and complexity of the Project and the Works it is not practicable to describe all of, or to describe in detail any of, the functions, duties and services which the Company will require the Consultant to perform and provide and that the foregoing paragraphs of this Schedule 1 comprise a general and non-exhaustive description of the functions, duties and services which are to be performed and provided. Accordingly, the Consultant shall perform and provide all such other functions, duties and services as are inherent, incidental or ancillary to or associated with the functions, duties and services described in this Schedule 1.

PART F : WORKS OR SERVICES EXCLUDED

1. The following are excluded from the scope of services :-

a)	Involvement in litigation, arbitration and major claims/contractual disputes
b)	Re-tendering of the project
c)	Termination of any Construction Contracts before completion
d)	Services in connection with fire damage to the Works
e)	Services in connection with taxation matters

2. An additional fee to be agreed with the Company will be charged for the services in sub-paragraph 1 above if subsequently carried out.

SCHEDULE 2

SITE PLAN

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SCHEDULE 3 : STAFFING LEVELS

Director	Kenneth KWAN, K M CHAU
Associate Director	Iris LEE

All important documents such as Estimates, Tender Reports (if any) or quotations, Bills of Quantities, Valuations and Final Accounts are read by the Director and the Deputy/Associate Director. All incoming and outgoing mail is similarly reviewed by the Director.

All routine matters are handled by a Project Surveyor (Ms. Hu Ai Hua, a Quantity Surveyor of the Consultant) who will be attending all meetings.

Important, urgent or complicated matters will receive the attention of the Director and/or the Deputy/Associate Director, who will attend meetings where appropriate.

Director	HK$2,250 per hour
Associate Director	HK$1,500 per hour
Senior Quantity Surveyor	HK$1,050 per hour
Quantity Surveyor	HK$700 per hour
Assistant Quantity Surveyor	HK$400 per hour
Quantity Surveying Assistant	HK$250 per hour

Note :

(1)	The above rates include profit and overhead charges.
(2)	The above rates include clerical time which will not be charged for in addition.

SCHEDULE 4 : PAYMENT SCHEDULE

1.	The Consultancy Fee of the Consultant for the performance of the Services described shall be HK$150,000.00 (for services described in Section 2, Part A of Schedule 1) and 1.3% of the total construction cost (the estimate of which is presently unknown) for services described in Sections 1, 3 to 11 of Part A and Parts B to E of Schedule 1). The interim payments to the Consultant below include all mechanical and electrical installations but exclude the costs of production equipment.
	The above Consultancy Fee is payable in the manner as stated below.
2.	The payment of the Consultancy Fee shall be as follows :-

	Percentage of Fees
For services described in Section 2, Part A of Schedule 1 Upon completion of Architect /Project Manager tender documents	60%
Upon award of Architect /Project Manager Contract	40%
	100%

	Percentage of Fees
For services described in Sections 1, 3 to 11 of Part A and Parts B to E of Schedule 1 Upon completion of First Cost Estimate	5% of the final total construction cost
Upon completion of Main Contract
Tender Documents (if required) or the Main Contract documentation	55%
Amount paid in equal monthly installments over the Main Contract Construction period	30%
Upon completion of the Final Account	10%
	100%

3.

The sum payable to the Consultant shall, until the total construction cost is known, be paid by the Company to the Consultant in instalments and shall be calculated by reference to the estimate of total construction cost. Instalments paid by the Company to the Consultant in accordance with the above schedule shall constitute no more than payments on account. A statement of the total sum due to the Consultant shall be prepared when the total construction cost is fully known. Such statement, after giving credit to the Client for all instalments previously paid, shall state the balance (if any) due from the Company to the Consultant or from the Consultant to the Company, as the case may be, which balance shall be paid to or by the Consultant as the case may require.

4.

The Consultancy Fee shall be paid in Hong Kong in Hong Kong Dollars (HK$) free of any PRC taxes. For the avoidance of doubt, the Consultant shall be responsible for any PRC taxes payable in respect of the Consultancy Fee.

D1

5. The Company shall reimburse the Consultant the following:-

(a)	Lithography, printing, photocopying, binding and translation of documents and overseas telephone calls will be charged for in addition, at net cost; and
(b)	Reasonable overseas travelling and subsistence expenses incurred wholly and necessary in respect of the project at net cost.
(c)	Endorsement fee of tender and contract documents, final accounts etc by local consultants, if required.

Private & Confidential

Dated the 6th day of February 2007

ZASTRON PRECISION -FLEX (WUXI) CO LTD

and

LEVETT AND BAILEY QUANTITY SURVEYORS LIMITED

AGREEMENT FOR QUANTITY SURVEYING SERVICES

EX-4.16

Exhibit 4.16

Supplementary Agreenent C

S/N: NR01-C

     Shenzhen Yusheng Joint Holdings Co. (formerly “Economic Cooperative of 3(1) Group of Fanshen Village, Xing’an Street Office, Bao’an District” , (hereafter Party A) and Jetup Electronic (Shenzhen) Co., Ltd. (hereafter Party B) entered into a lease agreement for factory and dormitory (the Origianl Agreement) on Oct. 17, 2003. Party A and Party B signed Supplementary Contact A and B on Jul. 21, 2004 and Oct. 13, 2004 respectively for changes of the practical condition. Now, Party B needs to rent another 891.82sqm of housing at the first floor of Building E. Through friendly consultation, both Party A and Party B agree to enter into Supplementary Agreement C pursuant to the Contract Law of the People’s Republic of China. Details are as follows:

1.	RMB Nine Thousand Eight Hundred and Ten only (RMB 9,810) shall be paid every month for the newly rented housing (891.82sqm of the area) since May 1, 2007. This new rent shall be paid with that of Supplementary Agreement B signed on Oct. 13, 2004 by both parties.
2.	Other contents and provisions of the Original Agreement, and Supplementary Agreement A and B remain unchanged.
3.	This Agreement has the same legal effect with the Original Agreement, and Supplementary Agreement A and B.
4.	This Agreement is executed in duplicates, and each party shall hold one copy.
5.	This supplementary Agreement shall take effect from the date of its execution.

Party A: Shenzhen Yusheng Joint Holdings Co.	Party B: Jetup Electronic (Shenzhen) Co., Ltd.
Legal representative:	Legal representative:
Signed on: May 1, 2007

1

EX-4.17

Exhibit 4.17

23 May 2007

ZASTRON PRECISION — TECH LIMITED

and

HONG KONG PRODUCTIVITY COUNCIL

CONSULTANCY FOR ENTERPRISE RESOURCES PLANNING

CONTENTS

Clause No.		Clause Heading	Page
	1.	DEFINITIONS		1
	2.	APPOINTMENT		1
	3.	CONSULTANT’S OBLIGATIONS		2
	4.	EMPLOYER’S OBLIGATIONS		3
	5.	PAYMENT		4
	6.	INDEMNITY AND LIABILITY		4
	7.	VARIATIONS		4
	8.	TERMINATION FOR BREACH		5
	9.	DELIVERY OF DOCUMENTS		6
	10.	MISCELLANEOUS		6
	11.	PROPER LAW AND JURISDICTION		7
	12.	WAIVER		7
	13.	COSTS		7

SCHEDULES

SCHEDULE 1 — TOTAL ERP SOLUTION SERVICE PROPOSAL

THIS AGREEMENT is made this 31^st of May 2007.

BETWEEN:

(1)	ZASTRON PRECISION — TECH LIMITED of Suites 1506-08, 15/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong (the “Employer”); and
(2)	HONG KONG PRODUCTIVITY COUNCIL of HKPC Building, 78 Tat Chee Avenue, Kowloon, Hong Kong (the “Consultant”).

WHEREAS:

A.	The Employer requires the Services (as defined below) to be provided in respect of an Enterprise Resources Planning System.
B.	The Consultant has agreed to provide the Services on the terms and conditions herein contained.

NOW IT IS HEREBY AGREED as follows:-

1.	DEFINITIONS
	In this Agreement, the following words and expressions shall have the meanings hereby assigned to them:-
	“Agreement” means this agreement and the Schedules hereto, as may be amended from time to time by mutual agreement in writing.
	“Fee” means the fees referred to and payable under Attachment B — Statement of Price of Schedule 1 hereto.
	“Services” means the professional services set out in or reasonably to be implied from Schedule 1 hereto as may be varied from time to time in accordance with this Agreement.
2.	APPOINTMENT
2.1	The Employer hereby appoints the Consultant and the Consultant hereby accepts the appointment as a professional consultant to provide the Services on the terms and conditions set out in this Agreement.

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3.	CONSULTANT’S OBLIGATIONS
3.1	Services

3.1.1	The Consultant shall perform the Services upon the terms and conditions set out in this Agreement and shall commence the Services within fourteen (14) days from the date of this Agreement and complete the same in accordance with Schedule 1. The Consultant shall commence the Services within 14 days of the date of this Agreement and shall perform the Services diligently and with due expedition at all times and shall comply with all directions and instructions which may be given by the Employer to the Consultant from time to time in so far as such directions and instructions are reasonable and consistent with the terms and conditions agreed by both parties under this Agreement.
3.1.2	The Consultant warrants that it shall exercise all reasonable skill, care and diligence to be expected of a professionally qualified consultant experienced in undertaking services of a similar nature and scope to the Services.
3.1.3	The Consultant shall employ or cause to be employed in connection with the Services only personnel who are skilled and experienced in the disciplines required for the proper and efficient performance of the Services. Nominees for such personnel are set out in Schedule 1. The Consultant reserves the right to assign personnel other than those Nominees to carry out the Services if any of those Nominees should leave the employment of the Consultant or if any of them has in the opinion of the Consultant become unfit to carry out the Services provided that the Consultant shall consult the Employer beforehand on any change of such personnel.
3.1.4	The Consultant shall promptly notify the Employer in writing of any event or matter which the Consultant is or ought reasonably to be, aware of, which delays or may delay the completion of the Services or any part thereof, indicating what steps are being taken by the Consultant to rectify the situation.
3.1.5	The Consultant shall not delegate or subcontract any duties or obligations arising under this Agreement without the prior written consent of the Employer.

3.2	Confidentiality
	The Consultant shall not at any time during or after the performance of the Services divulge or allow to be divulged to any person who is not employed by the Employer:-

3.2.1	any information supplied by the Employer to the Consultant;
3.2.2	any information obtained by the Consultant relating to the business and affairs of the Employer;
3.2.3	details of the work undertaken in performing the Services;

-2/8-

3.2.4	any advice given to the Employer, including any reports prepared by the Consultant pursuant to this Agreement; and
3.2.5	any other details or information relating to the Services,

	save to the extent that the Consultant is required to divulge such information to enable the Consultant to perform the Services, in which event the prior written consent of the Employer shall be obtained, or in accordance with the order of a court of competent jurisdiction provided that the Consultant’s duty of confidence shall cease to apply to any information coming into the public domain otherwise than by breach by the Consultant of its obligations contained in this clause and that nothing herein shall prevent the Consultant from disclosing any such information to the extent required in or in connection with legal proceedings arising out of this Agreement.
3.3	Copyright
	Copyright in all reports, drawings, documents or other materials produced by the Consultant in the provision of the Services shall belong to the Employer. The Employer shall have the sole right to publish all such documents produced by the Consultant under this Agreement. The Employer and the Consultant shall each indemnify and keep indemnified each other against any claim or liability in respect of any infringement of any intellectual property right in respect of any document or thing produced or supplied by them to the other in connection with the Services or this Agreement.
4.	EMPLOYER’S OBLIGATIONS
4.1	The Employer shall fulfil the Client’s Responsibilities as set out in Attachment C — Statement of Client’s Responsibilities of Schedule 1.
4.2	The Employer shall at all times keep confidential (and to procure that its employees and agents shall keep confidential) any confidential information which it may acquire in relation to the Consultant, its clients, business or affairs and shall not use or disclose such information except with the consent of the Consultant or in accordance with the order of a court of competent jurisdiction provided that the obligations of the Employer contained in this clause shall cease to apply to any information coming into the public domain otherwise than by breach by the Employer of its obligations contained in this clause and that nothing herein shall prevent the Employer from disclosing any such information to the extent required in or in connection with legal proceedings arising out of this Agreement.
4.3	The Employer shall not employ any of the Consultant’s staff involved in this Agreement during the continuance of this Agreement or within 6 months after the termination of this Agreement, except with the prior written approval of the Consultant.

-3/8-

4.4	All expenses incurred by the Consultant and money paid to third parties on behalf of the Employer and with the agreement of the Employer shall be borne by the Employer.
5.	PAYMENT
5.1	In consideration of the Services to be rendered by the Consultant under this Agreement, the Employer shall pay to the Consultant the Fee which shall be inclusive of all expenses and costs reasonably incurred by the Consultant in providing the Services unless otherwise stated in Attachment B — Statement of Price of Schedule 1 hereto.
5.2	The Fee shall be paid by installments in accordance with Attachment B — Statement of Price of Schedule 1 hereto.
5.3	In the event that the Employer instructs any variations pursuant to Clause 7 below, the Employer and the Consultant shall seek to agree the additional fee (if any) payable by the Employer to the Consultant in respect of such variations. In the event of any failure to so agree, the additional fee (if any) shall be based on the rates and prices set out in Attachment B — Statement of Price of Schedule 1 hereto.
6.	INDEMNITY AND LIABILITY
6.1	Subject to Clause 6.2 below, the Consultant shall indemnify and keep indemnified the Employer against all claims, demands, proceedings, liabilities, damages, costs, charges, and expenses whatsoever which the Employer may directly or indirectly incur or have made against it in respect of, in relation to or arising out of any failure by the Consultant to act in accordance with this Agreement, save that the Consultant’s liability to indemnify the Employer as aforesaid shall be reduced proportionately to the extent that a wrongful act or neglect of the Employer, its agents or employees may have contributed to such claims, demands, proceedings, liabilities, damages, costs, charges and expenses.
6.2	Notwithstanding anything contained herein:-

(a)	The Consultant shall not be held liable to the Employer for any loss of business or profit or other consequential loss and damages suffered as a result of any default on the part of the Consultant.
(b)	The Consultant’s liability in respect of any loss sustained by the Employer is expressly limited and shall in no case exceed the Fee or any part thereof actually paid by the Employer to the Consultant.

-4/8-

7.	VARIATIONS
7.1	The Employer may instruct any variations to the Services that in his opinion are desirable. Variations may include, but shall not be limited to :-

(a)	additions, omissions, substitutions, alterations, changes in quality, form character or kind of the Services;
(b)	engagement of additional personnel to perform the Services; and
(c)	changes to any sequence, method or timing of the Services specified in this Agreement.

7.2	No variation shall be made to the Services unless made by the Employer in writing and agreed to in writing by the Consultant.
7.3	No variation made pursuant to Clause 7.2 shall vitiate or invalidate this Agreement and this Agreement shall apply to the Services as varied.
8.	TERMINATION FOR BREACH
8.1	In the event of any material breach or non-observance of any of the obligations of the Consultant under this Agreement, or any neglect, failure or refusal by the Consultant to carry out the Services or to comply with this Agreement, the Employer may forthwith terminate the Consultant’s appointment under this Agreement provided that the Employer has given the Consultant 14 days’ written notice of and the Consultant has not remedied, such breach, non-observance, neglect, failure or refusal within the said 14 day period.
8.2	Without prejudice to any other remedies the Consultant may have against the Employer, the Consultant shall have the right to terminate this Agreement:

(a)	immediately if the Employer is wound up or is petitioned to be wound up, commits an act of bankruptcy or compound or arrange with its creditors or have a receiving order made against it or being a limited company enters into compulsory or voluntary liquidation (except for the purposes of amalgamation or restructure only);
(b)	on 14 days’ prior written notice if the Employer refuses or prevents the furnishing of Services by the Consultant under this Agreement; or
(c)	on 14 days’ prior written notice if the Employer violates any of the terms and conditions contained herein,

whereupon, the Employer shall be liable to reimburse the Consultant all expenses actually incurred for and on behalf of the Employer in respect of this Agreement up to the date of termination and shall pay the Consultant:-

(i)	any part(s) of the Fee due and payable under Clause 4; and
(ii)	the part(s) of the Fee for any part(s) of the Services rendered but not yet paid for which shall be calculated by reference to the same charging rate and basis as that for the Fee,

-5/8-

provided that in respect of the events under (b) and (c) above, the Consultant has given the Employer 14 days’ written notice of and the Employer has not remedied, such default within the said 14 day period.

9.	DELIVERY OF DOCUMENTS
9.1	The Consultant shall, on completion of the Services or upon any earlier termination of this Agreement, forthwith deliver up to the Employer all correspondence, documents, papers and property belonging to the Employer and all copies thereof which may be in its possession or under its control.
10.	MISCELLANEOUS
10.1	Whole Agreement

(a)	Each party acknowledges that this Agreement contains the whole agreement between the parties and that it has not relied on any oral or written representation made to it by the other or its employees or its agents and has made independent investigation into all matters relevant to it.
(b)	For the avoidance of doubts, Schedule 1 (which includes its Attachments) shall form part of this Agreement. In case of inconsistency between this Agreement and Schedule 1, Schedule 1 shall prevail.

10.2	Prior Agreements
	This Agreement supersedes any prior agreements between the parties whether written or oral in relation to the subject matter of this Agreement and any such prior agreements shall be deemed to be cancelled as at the date of the Agreement.
10.3	Assignment
	Neither party may assign or transfer any of its rights or obligations under this Agreement without the other’s prior written consent which shall not be unreasonably withheld or delayed.
10.4	Notices
	Any notice to be served on either of the parties by the other shall be sent to such address in Hong Kong as may be notified to the other party expressly for the purpose of service of documents. Service of documents shall be by pre-paid registered post or by facsimile and shall be deemed to have been received by the addressee within 3 clear days of posting or within 8 hours if sent by facsimile to the correct facsimile number of the addressee.

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11.	PROPER LAW AND JURISDICTION
11.1	This Agreement and all disputes and difference arising hereunder shall be governed by the laws for the time being in force in the Hong Kong Special Administrative Region and the parties hereto hereby submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region.
12.	WAIVER
12.1	The failure by either party to enforce at any time or for any period any one or more of the terms or conditions of this Agreement shall not be a waiver by them of the right at any time subsequently to enforce all terms and conditions of this Agreement.
13.	COSTS
13.1	Each of the parties shall pay any costs and expenses incurred by it in connection with this Agreement.

-7/8-

This Agreement has been duly entered into by the parties the day and year above written.

Signed by	)
for and on behalf of	)
ZASTRON PRECISION -	)
TECH LIMITED	)
Signed by	)
for and on behalf of	)
HONG KONG PRODUCTIVITY	)
COUNCIL	)

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SCHEDULE 1

TOTAL ERP SOLUTION SERVICE PROPOSAL

EX-4.18

Exhibit 4.18

OUR REF: AOC-CMB-SZN (FZ) (070529).AP

CONFIDENTIAL

Namtai Electronic (Shenzhen) Company Limited
Gusu Industrial Estate,
Xixiang, Baoan
Shenzhen, P.R.C	07 June 2007

Attn: Mr. John Farina / Ms. Connie Sit

Dear Sir and Madam,

Banking Facilities
Customer No. 002-022689

With reference to our recent discussion, we are pleased to advise that we have reviewed your banking facility and offer a renewal within the following revised limit which will be made available on the specific terms and conditions outlined herein and upon the satisfactory completion of security detailed below. Notwithstanding anything to the contrary in this facility letter, this facility is also subject to our overriding right of suspension, withdrawal and repayment on demand at any time, and to review at any time, and in any event, by 31 May 2008.

Borrower:

(“Namtai Electronic (Shenzhen) Company Limited”)

Lender:

HSBC Bank (China) Company Limited Shenzhen Branch

Namtai Electronic (Shenzhen) Company Limited 7 June 2007

Facility/ Amount

	New	Previous
Tranche I Import Facilities	USD5,000,000.-	USD3,000,000.-
Documentary Credits to your Suppliers and Import Loan Facilities in either USD or Foreign Currency (HKD or JPY) for up to 90 days, less any usance/ Credit periods granted by your suppliers.
within which
Goods under your control and/or Trust Receipts.	(USD5,000,000.-)	(USD3,000,000.-)

Term:

The “Term” here refers to the term during which this facility is available for drawing. The Term of this facility is up to (and including) 31May2008, subject to annual review and renewal.

Interest

Interest rate on import loan continues to be charged at 0.55% per annum over 1, 2 or 3 months Hong Kong/Singapore/London Interbank Money Market Offer Rate and payable in arrears.

Commission:

Documentary Credits opening commission for each validity of three months or part thereof (minUSD24.00) to be revised and charged as below and payable in full at the time of issuance of all DCs.

	New			Previous
For DC amount below USD100k or its equivalent		0.10	%		0.12	%
For DC amount between USD100k (USD100k inclusive) and USD250k or its equivalent		0.08	%		0.10	%
For DC amount between USD250k (USD250k inclusive) and USD400k or its equivalent		0.06	%		0.08	%
For DC amount above USD400k (USD400k inclusive) or its equivalent		0.04	%		0.06	%

Default Interest:

Please note that interest will be payable on sums which are overdue or overlimit (as well as amounts demanded and not paid) or (in respect of loan amount) used for purposes other than the purpose of loan stated in this letter in respect of all or any of the facility and such interest will be charged by the Lender as hereunder.

Overdue or overlimit sums: Default interest is charged at the stipulated interest rate marked up by 3%.

Loan amount used for purposes other than stated in this letter: Default interest is charged at the stipulated interest rate marked up by 5%.

For avoidance of doubt, the impost of default interest as mentioned above shall not be deemed as the Lender’s

Namtai Electronic (Shenzhen) Company Limited 7 June 2007

acknowledgement or acceptance of any such default event as mentioned above and shall be without prejudice to any rights of the Lender as described in the first paragraph of this facility letter.

Prepayment:

With the Lender’s prior approval (which will not be withheld, provided that the Lender is satisfied that the funds utilized are generated from Borrower’s internal resources out of cash flow rather than from external refinancing), during an interest period the total amount of a drawing may, with 5 working days advance notice to the Lender, be repaid subject to the usual penalties (i.e. the differential between the return the Lender would have received had the loan run to maturity and the return the Lender is able to obtain by the placing of the funds repaid for the remainder of the period in the market). Each prepayment should be in a minimum of USD400,000.- (or, if the relevant drawing is made in any other currency, the equivalent amount in such other currency) and in an integral multiple of USD200,000.- (or, if the relevant drawing is made in any other currency, the equivalent amount in such other currency).

Security

As security, we continue to hold the Corporate Guarantee for USD3,000,000.- from Nam Tai Electronic & Electrical Products Limited dated 01 August 2006 together with a certified copy of Board Resolution dated 01 August 2006.

For the revised facility, we shall require Corporate Guarantee for USD5,000,000.- from Nam Tai Electronic & Electrical Products Limited, to be supported by board resolution. Existing Corporate Guarantee dated 01 August 2006 shall be returned to you upon the receipt of the new one.

The security provider’s internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the provision of the Security and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Security in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the security provider is a foreign entity) has been duly made and submitted to the Lender.

The Borrower undertakes that:

(i) upon the realisation of any foreign guarantee/security in respect of this facility, it shall conduct foreign debt registration with the local State Administration of Foreign Exchange (“SAFE”) in a timely manner but in no event later than 15 days after realisation of such foreign guarantee/security;

(ii) to procure the successful registration with SAFE as mentioned in the foregoing item (i), the Borrower shall ensure that it has sufficient borrowing gap at the time of the registration of the realised foreign guarantee/security;

(iii) throughout the term of the facility and as long as the facility is existing or any indebtedness under the facility is outstanding, the Borrower shall keep the Lender informed of the amount of its borrowing gap (calculated as the balance of (i) its approved total investment amount less (ii) its registered capital) and shall forthwith advise the Lender of any change in the borrowing gap; and

(iv) the Borrower shall take all necessary measures to ensure that all the indebtedness owed to the Lender under this facility be fully settled in the same currency as that of such indebtedness.

Namtai Electronic (Shenzhen) Company Limited 7 June 2007

Conditions Precedent:

1) The Borrower shall present to the Lender a valid Borrowing Card issued by the People’s Bank of China.

2) Certified true copies of all government approvals and certificates in relation to the establishment of the Borrower shall be submitted to the Lender.

3) The Borrower has provided its internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the facilities hereunder and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the facilities hereunder in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the Borrower is a foreign entity).

4) In the event that the Lender’s making available any facility hereunder is subject to regulatory approval or the completion of other procedures with the regulator(s), the acquisition of such regulatory approval and the completion of such procedures with regulator(s).

5) The Lender is satisfied that all the security(ies) stated in the “Security” item above (if any) has/have been established and is/are valid and enforceable. The security provider’s internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the provision of the Security and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Security in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the security provider is a foreign entity) has been duly made and submitted to the Lender.

6) The appendix to the facility letter, which relates to the Lender’s storage and processing of customer’s            information shall form an integral part of the facility letter and be binding on the Borrower.

Other Conditions:

1) Without prejudice to any security or other priority right to which the Lender is entitled (if any), this facility shall rank at least pari-passu with all present and future borrowings of the Borrower. The Borrower undertakes to advise the Lender in advance of any future borrowings.

2) The Borrower should not create or attempt to create or permit to subsist any mortgage, debenture, charge, pledge, lien or other encumbrance upon, or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) on the whole or any part of present or future assets of the Borrower without Lender’s prior written consent..

3) Audited yearly financial statements of the Borrower and the Guarantor to be prepared by qualified accountants shall be provided to the Lender whenever available but in any event no later than 120 days from the financial year-ends.

4) Other financial or operational information of the Borrower as from time to time reasonably requested by the Lender.

5) We may, at our sole and absolute discretion, refuse to allow drawings under the facilities if the transaction in question does not meet our operational requirements in respect of these facilities

Namtai Electronic (Shenzhen) Company Limited 7 June 2007

Termination Event

The Borrower undertakes to notify the Lender on any change of its shareholder percentage and, without prejudice to the generality of the Lender’s overriding right of suspension, withdrawal and repayment on demand at any time, the Lender shall have the right to terminate and withdraw the Facility if Nam Tai Electronic & Electrical Products Limited’s beneficial interest in the Borrower is reduced to below 50%.

Expenses:

All out-of-pocket expenses including but not limited to the PRC stamp duty and the legal fees in relation to the preparation, negotiation, execution and enforcement of this facility shall be borne by the Borrower.

Taxation and Deduction:

All payments of principal, interest, fees and other expenses shall be made by the Borrower free and clear of taxes, levies, imposts, duties, charges or withholding of whatsoever nature.

Assignment:

Without prejudice to any right of assignment enjoyed by the Lender pursuant to law or any contract, the Lender may, without any party’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or any of the Lender’s sub-branch(es) (if any).

Governing Laws:

This letter shall be governed by and construed in accordance with the laws of the People’s Republic of China.

Jurisdiction:

The Borrower submits to the jurisdiction of the PRC court at the principal office of the Lender. Nothing in this Clause limits the right of the Lender to bring proceedings against the Borrower in connection with this facility in any other court of any competent jurisdiction.

(i) Section 83 of the HK Banking Ordinance and (ii) the CBRC Administration Rules on the Connected Transactions of Commercial Banks with Insiders and Shareholders (the “CBRC Rules on Connected Transactions”):

Please note that Section 83 of the Banking Ordinance and the CBRC Rules on Connected Transactions have imposed on us as a bank certain limitations on advances to persons related to our directors or employees or advances that are of the “connected transaction” nature. In acknowledging this Facility Letter you should advise us whether you are in any way related to any of our directors or employees within the meaning of Section 83 or otherwise are a “connected party” defined in the CBRC Rules on Connected Transactions and in the absence of such advice we will assume that you are not so related. We would also ask, should you become so related subsequent to acknowledging this Facility Letter, that you immediately advise us in writing.

Namtai Electronic (Shenzhen) Company Limited 7 June 2007

We may provide any information relating to any of your accounts with us and any facilities we may provide to you from time to time or their conduct or any other information concerning your relationship with us to any other company or office which at the relevant time belongs to or is part of the HSBC Group.

The facility offer will remain open for acceptance until the close of business on 07July2007 and if not accepted by that date will be deemed to have lapsed (unless otherwise agreed by us in writing).

We shall be grateful if you could arrange for the authorized signatory(ies) of your company in accordance with the terms of the shareholders’ resolution or board resolution (as the case may be) to be given to us, to sign and return to us the duplicate copy of this letter to signify your understanding and acceptance of the terms and conditions under which the facility is granted.

We are pleased to be of continued assistance.

For and on behalf of
HSBC Bank (China) Company Limited, Shenzhen Branch

Faye Zhou	Sunny Poon
Vice President	Senior Vice President & Division Head
Commercial Banking	Commercial Banking
/ap
Bcc: HSBC SZN Credit Operation
	Accepted by Namtai Electronic (Shenzhen) Company Limited
	(Authorized signature and chop)

Namtai Electronic (Shenzhen) Company Limited 7 June 2007

Appendix

To make you better understand the Bank’s policy in respect of its storage and processing of any information supplied by the potential or actual customers and/or other related individuals and entities, the Bank makes the following statements:

(a) in connection with any proposed or existing transaction between you and the Bank, the Bank may request you to supply (or arrange to supply) the Bank with information relating to yourself(ves), your directors, shareholders or other officers, as well as proposed or actual guarantors or security providers (if any) (the “Information”);

(b) such Information may be used by the Bank for the purpose of conducting credit and other checks on you, evaluating any proposed, existing or past transaction between you and the Bank, formulating an offer for any such proposed or existing transaction or for any other purpose relating to any such transaction, and/or for the purpose of promoting, improving and furthering the provision of other financial services by the Bank and any other member of the HSBC Group to you generally, and/or for any other purpose as in accordance with the Bank’s general policy on disclosure of information as may be notified to you from time to time;

(c) such Information will be kept confidential but the Bank may provide such Information to any of the following parties for the purposes set out above (without the need to giving any further notice to the individuals to whom such Information relates ):

(i) any agent, contractor or third party service provider (whether situated within or outside the People’s Republic of China) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;

(ii) credit reference agencies;

(iii) any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations, rules or judicial process;

(iv) any actual or proposed participant or sub-participant of any proposed or existing transaction between you and the Bank;

(v) any of the Bank’s officers and employees;

(d) you shall ensure that all the persons as referred to in (a) above, whose personal or other data have been included in the Information provided to the Bank, have consented to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this letter;

(e) if you maintain an account/accounts with the Bank, you shall be further subject to any provisions in those terms and conditions applicable to such account(s) on the Bank’s storage and processing of the customers’ and other information. These account terms and conditions, the provisions referred to in this letter as well as any other agreement between you and the Bank relating to the Bank’s storage and processing of the customers’ and other information shall supplement, rather than conflict with, each other;

(f) the Bank may retain any such Information for any time period as it considers necessary or desirable (whether or not you have ceased to be a customer or potential customer of the Bank), and all the provisions in this letter shall remain effective during the whole retention period of such Information.

The above-mentioned explanation is to make you have a better knowledge of the Bank’s data privacy policies in respect of the information of the customers and other related persons/entities. In any event, the Bank will remain responsible for ensuring the confidentiality of such information. The Bank appreciates that you have selected, or are interested in selecting, the Bank’s service, and we commit to providing you with more and more quality banking products and services.

Yours sincerely,

HSBC Bank (China) Company Limited Shenzhen Branch

EX-4.19

Exhibit 4.19

(HK-law-governed Version)

To : HSBC Bank (China) Company Limited Shenzhen Branch

GUARANTEE BY LIMITED COMPANY (Limited Amount — Under Common/Corporate Seal)

1.	Definitions
	“Bank” means HSBC Bank (China) Company Limited Shenzhen Branch and its successors and assigns;
	“Banking Facilities” means such facilities as the Bank may make or continue to make available to the Customer or to any other person at the request of the Customer;
	“Customer” means the person whose name and address are specified in the Schedule;
	“Default Interest” means interest at such rate as the Bank may specify, compounded monthly if not paid on the dates specified by the Bank;
	“Exchange Rate” means the rate for converting one currency into another currency which the Bank determines to be prevailing in the relevant foreign exchange market at the relevant time, such determination to be conclusive and binding on the Guarantor;
	“Guaranteed Moneys” means (i) all moneys in any currency owing by the Customer to the Bank at any time, actually or contingently, in any capacity, alone or jointly with any other person, (ii) interest on such moneys (both before and after any demand or judgment), to the date on which the Bank receives payment, at the rates payable by the Customer or which would have been payable but for any circumstance which restricts payment and (iii) expenses of the Bank in enforcing this Guarantee on a full indemnity basis;
	“Guarantor” means the person whose name and address are specified in the Schedule;
	“Maximum Liability” means the sum specified in the Schedule plus Default Interest on that sum or part thereof (to the extent that it is not paid by the Guarantor on demand by the Bank) and expenses of the Bank in enforcing this Guarantee on a full indemnity basis; where a liability for Guaranteed Moneys is incurred in a currency different from the currency in which the Maximum Liability is stated and the equivalent of that liability in the currency in which the Maximum Liability is stated, calculated at the Exchange Rate, has increased since it was incurred, that increase shall be added to the Maximum Liability;
	“person” includes an individual, firm, company, corporation and an unincorporated body of persons; and
	“Process Agent” means the person, if any, whose name and Hong Kong address are specified in the Schedule.
2.	Guarantee
	In consideration of the Banking Facilities, the Guarantor guarantees to pay the Guaranteed Moneys to the Bank on demand.
	The liability of the Guarantor shall not exceed the Maximum Liability.
	The Guarantor shall pay Default Interest (to the extent that it is not paid by the Customer) on the Guaranteed Moneys from the date of demand by the Bank on the Guarantor until the Bank receives payment of the whole of the Guaranteed Moneys (both before and after any demand or judgment or any circumstance which restricts payment by the Customer).
	A certificate of balance signed by any duly authorized officer of the Bank shall be conclusive evidence against the Guarantor of the amount of the Guaranteed Moneys owing at any time.
	The Bank shall be entitled to retain this Guarantee and any security it has in respect of the Guaranteed Moneys for such period as the Bank may certify to the Guarantor to be appropriate in order to protect the interests of the Bank in respect of the Guaranteed Moneys.
3.	Continuing and Additional Security
	This Guarantee is a continuing security and shall secure the whole of the Guaranteed Moneys until one calendar month after receipt by the Bank of notice in writing by the Guarantor or a liquidator or receiver of the Guarantor to terminate it. Nevertheless and despite the giving of such notice, this Guarantee shall continue to apply to the Guaranteed Moneys in respect of which the Customer is or becomes actually or contingently liable up to such termination and the Guarantor guarantees to pay such Guaranteed Moneys to the Bank on demand whether that demand is made before, at the time of or after such termination.
	This Guarantee is in addition to, shall not be affected by and may be enforced despite the existence of any other guarantee or security held by the Bank.
4.	Customer’s Accounts
	The Bank may, at any time and despite the termination of this Guarantee, continue any existing account and open any new account in the name of the Customer and no subsequent transactions, receipts or payments involving such new accounts shall affect the liability of the Guarantor.

1

5.	Payments
	Payments by the Guarantor shall be made to the Bank as specified by the Bank without any set-off, counterclaim, withholding or condition of any kind except that, if the Guarantor is compelled by law to make such withholding, the sum payable by the Guarantor shall be increased so that the amount actually received by the Bank is the amount it would have received if there had been no withholding.
	Payment by the Guarantor to the Bank shall be in the currency of the relevant liability or, if the Bank so agrees in writing, in a different currency, in which case the conversion to that different currency shall be made at the Exchange Rate.
	No payment to the Bank under this Guarantee pursuant to any judgment, court order or otherwise shall discharge the obligation of the Guarantor in respect of which it was made unless and until payment in full has been received in the currency in which it is payable under this Guarantee and, to the extent that the amount of any such payment shall, on actual conversion into such currency, at the Exchange Rate, fall short of the amount of the obligation, expressed in that currency, the Guarantor shall be liable for the shortfall.
	Any moneys paid to the Bank in respect of the Guaranteed Moneys may be applied in or towards satisfaction of the same or placed to the credit of such account as the Bank may determine with a view to preserving its rights to prove for the whole of the Guaranteed Moneys.
	If any moneys paid to the Bank in respect of the Guaranteed Moneys are require dto be repaid by vitue of any law relating to insolvency, bankruptcy or liquidation or for any other reason, the Bank shall be entitled to enforce this Guarantee as if such moneys had not been paid.
6.	Set-off
	The Bank may, at any time and without notice, apply any credit balance to which the Guarantor is entitled on any account with the Bank in or towards satisfaction of the Guaranteed Moneys. For this purpose, the Bank is authorized to purchase, at the Exchange Rate, such other currencies as may be necessary to effect such application with the moneys standing to the credit of such account.
7.	Lien
	The Bank is authorized to exercise a lien over all property of the Guarantor coming into the possession or control of the Bank, for custody or any other reason and whether or not in the ordinary course of banking business, with power for the Bank to sell such property to satisfy the Guaranteed Moneys.
8.	Guarantor as Principal Debtor
	The liability of the Guarantor under this Guarantee shall not be discharged or otherwise affected by reason of the Bank entering into any agreement or arrangement with the Customer or any other person or by reason of any legal limitation, disability or incapacity or any other act, omission or circumstance which, but for this provision, would discharge the Guarantor to any extent. Any Guaranteed Moneys which may not be recoverable from the Customer for any such reason shall be recoverable by the Bank from the Guarantor as principal debtor by way of indemnity, on demand, together with Default Interest thereon in accordance with Clause 2.03.
9.	Guarantor as Trustee
	The Guarantor shall not, until the whole of the Guaranteed Moneys have been received by the Bank, exercise its rights of subrogation, indemnity, set-off counterclaim against the Customer or its rights to participate in any security the Bank has            in respect of the Guaranteed Moneys, or , unless required by the Bank to do so, to prove in the bankruptcy or liquidation of the Customer. The Guarantor shall hold any amount recovered, as a result of the exercise of any of such rights, on trust for the Bank and shall pay the same to the Bank immediately on receipt.
	The Guarantor has not taken any security from the Customer and agrees not to do so until the Bank has received the whole of the Guaranteed Moneys. Any security taken by the Guarantor in breach of this provision shall be held in trust for the Bank as security for the Guaranteed Moneys and all moneys at any time received in respect thereof shall be paid to the Bank immediately on receipt.
10.	No Waiver
	No act or omission by the Bank pursuant to his Guarantee shall affect its rights, powers and remedies hereunder or any further or other exercise of such rights, powers or remedies.
11.	Consent

2

The Guarantor agrees that the Bank may, for such purposes as the Bank may consider reasonably appropriate, disclose and/or obtain information concerning the Guarantor (including details of and relating to all or any transactions or dealings between the Guarantor and the Bank) to or from:

(a)	any agent, contractor or third party service provider (whether situated within or outside Hong Kong) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(b)	credit reference agencies;
(c)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations or judicial process; and
(d)	any actual or proposed participant or sub-participant of the Banking Facilities (or any part thereof).

	In the event that such information includes the personal or other data of any third party or individual, the Guarantor confirms and warrants that it has obtained the consent of such third party or individual to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this Clause. The Guarantor will indemnify and hold the Bank harmless from all costs, penalties, damages and other losses incurred as the result of any breach of the terms of this Clause.
12.	Assignment
	The Guarantor may not assign or transfer any of its rights or obligations hereunder. The Bank may assign any of its rights hereunder to a person in whose favour its has made an assignment of all or any of the Banking Facilities.
	Without prejudice to the foregoing and any right of assignment enjoyed by the Bank under any applicable law or any other documents, the Bank may, without the Guarantor’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or to any branch or sub-branch of the Bank.
13.	Communications
	Any notice, demand or other communication under this Guarantee shall be in writing addressed to the Guarantor at its registered office address or at the last address registered with the Bank and addressed to the Bank at its office specified in the Schedule or such other address as the Bank may notify to the Guarantor for this purpose any may be delivered personally, by leaving it at such address, by post, facsimile transmission or telex and shall be deemed to have been delivered to the Guarantor at the time of personal delivery or on leaving it at such address or on the second day following the day of posting or on the day of dispatch, if sent by facsimile transmission or telex, and to the Bank on the day of actual receipt.
14.	Severability
	Each of the provisions of this Guarantee is severable and distinct from the others and, if one or more of such provisions is or becomes illegal, invalid or unenforceable, the remaining provisions shall not be affected in any way.
15.	Governing Law and Jurisdiction
	The Guarantee is governed by and shall be construed in accordance with the laws of the Hong Kong Special Administrative Region (“Hong Kong”).
	The Guarantor submits to the non-exclusive jurisdiction of the Hong Kong courts but this Guarantee may be enforced in the courts of any competent jurisdiction.
16.	Governing Version
	This Guarantee is executed in an English version and/or a Chinese version. In case both versions are executed, the English version is the governing version and shall prevail whenever there is any discrepancy between the English version and the Chinese version.
17.	Process Agent
	If a Process Agent is specified in the Schedule, service of any legal process on the Process Agent shall constitute service on the Guarantor.
18.	Execution
	This Guarantee has been entered into by the Guarantor under its common corporate seal, whichever may be affixed below, on
	7 June 2007

3

Schedule

Address of Bank’s Office (for the purpose of Clause 13 only)

8/F, China Resources Building, No. 5001, Shennan Road East, Luohu District, Shenzhen
Details of Customer
Name	*Address
Namtai Electronic (Shenzhen) Co., Ltd.	Gu Su Industrial Estate, Xixiang, Baoan, Shenzhen, PRC
Details of Guarantor
Name	*Address
Nam Tai Electronic & Electrical Products Limited	Suites 1506-1508, 15th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong
Specified Sum in Respect of Maximum Liability *
USD5,000,000.— plus interest, fees and expenses.
Details of Process Agent
Name	*Address
Executed under the Seal of the Guarantor in the presence of the following Director(s) and/or Secretary:
Signature of Director/Secretary	Signature of Director/Secretary
Original Signed By Ms. WONG Kuen Ling	Original Signed By Mr. KOO Ming Kown
Name    WONG Kuen Ling	Name    KOO Ming Kown
Office    Director	Office    Director
Identification Document Type and Number    H.K.I.D. No. E974846(A)	Identification Document Type and Number    Canadian Passport No. BA300240
Witnessed by:
Signature of Witness    Original Signed By Mr. WONG Long Kee	Signature of Witness    Original Signed By Mr. WONG Long Kee
Name    WONG Long Kee	Name    WONG Long Kee
Office    Company Secretary	Office    Company Secretary
Identification Document Type and Number    H.K.I.D. No. K003729(A)	Identification Document Type and Number    H.K.I.D. No. K003729(A)

*	P O Box is not acceptable
*	Please inset below the principal amount of the Banking Facilities.

4

EX-4.20

Exhibit 4.20

OUR REF: AOC-CMB-SZN (FZ) (070529).AP

CONFIDENTIAL

Zastron Electronic (Shenzhen) Company Limited
Gusu Industrial Estate,
Xixiang, Baoan,
Shenzhen, PRC	7 June 2007

Attn: Mr. John Farina / Ms. Connie Sit

Dear Sir and Madam,

Banking Facilities
Customer No. 002-095495

With reference to our recent discussion, we are pleased to advise that we have reviewed your banking facility and offer a renewal within the following revised limit which will be made available on the specific terms and conditions outlined herein and upon the satisfactory completion of security detailed below. Notwithstanding anything to the contrary in this facility letter, this facility is also subject to our overriding right of suspension, withdrawal and repayment on demand at any time, and to review at any time, and in any event, by 31 May 2008.

Borrower:

(“Zastron Electronic (Shenzhen) Company Limited”)

Lender:

HSBC Bank (China) Company Limited Shenzhen Branch

Zastron Electronic (Shenzhen) Company Limited 7 June 2007

Facility/ Amount

		New	Previous
Tranche I	Import Facilities	USD10,000,000.-	USD15,000,000.-
Documentary Credits to your Suppliers and Import Loan Facilities in either USD or Foreign Currency (HKD or JPY) for up to 120 days less any usance / Credit periods granted by your suppliers.
within which
Goods under your control and/or Trust Receipts.		(USD10,000,000.-)	(USD15,000,000.-)

Term:

The “Term” here refers to the term during which this facility is available for drawing. The Term of this facility is up to (and including) 31May2008, subject to annual review and renewal.

Interest

Interest rate on import loan continues to be charged at 0.55% per annum over 1, 2 or 3 months Hong Kong/Singapore/London Interbank Money Market Offer Rate and payable in arrears.

Commission:

Documentary Credits opening commission for each validity of three months or part thereof (minUSD24.00) to be revised and charged as below and payable in full at the time of issuance of all DCs.

	New			Previous
For DC amount below USD100k or its equivalent		0.10	%		0.12	%
For DC amount between USD100k (USD100k inclusive) and USD250k or its equivalent		0.08	%		0.10	%
For DC amount between USD250k (USD250k inclusive) and USD400k or its equivalent		0.06	%		0.08	%
For DC amount above USD400k (USD400k inclusive) or its equivalent		0.04	%		0.06	%

Default Interest:

Please note that interest will be payable on sums which are overdue or overlimit (as well as amounts demanded and not paid) or (in respect of loan amount) used for purposes other than the purpose of loan stated in this letter in respect of all or any of the facility and such interest will be charged by the Lender as hereunder.

Overdue or overlimit sums: Default interest is charged at the stipulated interest rate marked up by 3%.

Loan amount used for purposes other than stated in this letter: Default interest is charged at the stipulated interest rate marked up by 5%.

For avoidance of doubt, the impost of default interest as mentioned above shall not be deemed as the Lender’s acknowledgement or acceptance of any such default event as mentioned above and shall be without prejudice to any rights of the Lender as described in the first paragraph of this facility letter.

Zastron Electronic (Shenzhen) Company Limited 7 June 2007

Prepayment:

With the Lender’s prior approval (which will not be withheld, provided that the Lender is satisfied that the funds utilized are generated from Borrower’s internal resources out of cash flow rather than from external refinancing), during an interest period the total amount of a drawing may, with 5 working days advance notice to the Lender, be repaid subject to the usual penalties (i.e. the differential between the return the Lender would have received had the loan run to maturity and the return the Lender is able to obtain by the placing of the funds repaid for the remainder of the period in the market). Each prepayment should be in a minimum of USD400,000.- (or, if the relevant drawing is made in any other currency, the equivalent amount in such other currency) and in an integral multiple of USD200,000.- (or, if the relevant drawing is made in any other currency, the equivalent amount in such other currency).

Security

As security, we continue to hold the Corporate Guarantee for USD15,000,000.- from Nam Tai Electronics, Inc. dated 21 July 2006 together with a certified copy of Board Resolution dated 21 July2006.

For the revised facility, we shall require Corporate Guarantee for USD10,000,000.- from Nam Tai Electronics, Inc., to be supported by board resolution. Existing Corporate Guarantee dated 21 July 2006 shall be returned to you upon the receipt of the new one.

The security provider’s internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the provision of the Security and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Security in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the security provider is a foreign entity) has been duly made and submitted to the Lender.

The Borrower undertakes that:

(i)	upon the realisation of any foreign guarantee/security in respect of this facility, it shall conduct foreign debt registration with the local State Administration of Foreign Exchange (“SAFE”) in a timely manner but in no event later than 15 days after realisation of such foreign guarantee/security;
(ii)	to procure the successful registration with SAFE as mentioned in the foregoing item (i), the Borrower shall ensure that it has sufficient borrowing gap at the time of the registration of the realised foreign guarantee/security;
(iii)	throughout the term of the facility and as long as the facility is existing or any indebtedness under the facility is outstanding, the Borrower shall keep the Lender informed of the amount of its borrowing gap (calculated as the balance of (i) its approved total investment amount less (ii) its registered capital) and shall forthwith advise the Lender of any change in the borrowing gap; and
(iv)	the Borrower shall take all necessary measures to ensure that all the indebtedness owed to the Lender under this facility be fully settled in the same currency as that of such indebtedness.

Zastron Electronic (Shenzhen) Company Limited 7 June 2007

Conditions Precedent:

1)	The Borrower shall present to the Lender a valid Borrowing Card issued by the People’s Bank of China.
2)	Certified true copies of all government approvals and certificates in relation to the establishment of the Borrower shall be submitted to the Lender.
3)	The Borrower has provided its internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the facilities hereunder and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the facilities hereunder in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the Borrower is a foreign entity).
4)	In the event that the Lender’s making available any facility hereunder is subject to regulatory approval or the completion of other procedures with the regulator(s), the acquisition of such regulatory approval and the completion of such procedures with regulator(s).
5)	The Lender is satisfied that all the security(ies) stated in the “Security” item above (if any) has/have been established and is/are valid and enforceable. The security provider’s internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the provision of the Security and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Security in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the security provider is a foreign entity) has been duly made and submitted to the Lender.
6)	The appendix to the facility letter, which relates to the Lender’s storage and processing of customer’s information shall form an integral part of the facility letter and be binding on the Borrower.

Other Conditions:

1)	Without prejudice to any security or other priority right to which the Lender is entitled (if any), this facility shall rank at least pari-passu with all present and future borrowings of the Borrower. The Borrower undertakes to advise the Lender in advance of any future borrowings.
2)	The Borrower should not create or attempt to create or permit to subsist any mortgage, debenture, charge, pledge, lien or other encumbrance upon, or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) on the whole or any part of present or future assets of the Borrower without Lender’s prior written consent..
3)	Audited yearly financial statements of the Borrower and the Guarantor to be prepared by qualified accountants shall be provided to the Lender whenever available but in any event no later than 120 days from the financial year-ends.
4)	Other financial or operational information of the Borrower as from time to time reasonably requested by the Lender.
5)	We may, at our sole and absolute discretion, refuse to allow drawings under the facilities if the transaction in question does not meet our operational requirements in respect of these facilities

Zastron Electronic (Shenzhen) Company Limited 7 June 2007

Termination Event

The Borrower undertakes to notify the Lender on any change of its shareholder percentage and, without prejudice to the generality of the Lender’s overriding right of suspension, withdrawal and repayment on demand at any time, the Lender shall have the right to terminate and withdraw the Facility if Zastron Precision-Tech Limited’s beneficial interest in the Borrower is reduced to below 50%.

Expenses:

All out-of-pocket expenses including but not limited to the PRC stamp duty and the legal fees in relation to the preparation, negotiation, execution and enforcement of this facility shall be borne by the Borrower.

Taxation and Deduction:

All payments of principal, interest, fees and other expenses shall be made by the Borrower free and clear of taxes, levies, imposts, duties, charges or withholding of whatsoever nature.

Assignment:

Without prejudice to any right of assignment enjoyed by the Lender pursuant to law or any contract, the Lender may, without any party’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or any of the Lender’s sub-branch(es) (if any).

Governing Laws:

This letter shall be governed by and construed in accordance with the laws of the People’s Republic of China.

Jurisdiction:

The Borrower submits to the jurisdiction of the PRC court at the principal office of the Lender. Nothing in this Clause limits the right of the Lender to bring proceedings against the Borrower in connection with this facility in any other court of any competent jurisdiction.

(i) Section 83 of the HK Banking Ordinance and (ii) the CBRC Administration Rules on the Connected Transactions of Commercial Banks with Insiders and Shareholders (the “CBRC Rules on Connected Transactions”):

Please note that Section 83 of the Banking Ordinance and the CBRC Rules on Connected Transactions have imposed on us as a bank certain limitations on advances to persons related to our directors or employees or advances that are of the “connected transaction” nature. In acknowledging this Facility Letter you should advise us whether you are in any way related to any of our directors or employees within the meaning of Section 83 or otherwise are a “connected party” defined in the CBRC Rules on Connected Transactions and in the absence of such advice we will assume that you are not so related. We would also ask, should you become so related subsequent to acknowledging this Facility Letter, that you immediately advise us in writing.

Zastron Electronic (Shenzhen) Company Limited 7 June 2007

We may provide any information relating to any of your accounts with us and any facilities we may provide to you from time to time or their conduct or any other information concerning your relationship with us to any other company or office which at the relevant time belongs to or is part of the HSBC Group.

The facility offer will remain open for acceptance until the close of business on 07July2007 and if not accepted by that date will be deemed to have lapsed (unless otherwise agreed by us in writing).

We shall be grateful if you could arrange for the authorized signatory(ies) of your company in accordance with the terms of the shareholders’ resolution or board resolution (as the case may be) to be given to us, to sign and return to us the duplicate copy of this letter to signify your understanding and acceptance of the terms and conditions under which the facility is granted.

We are pleased to be of continued assistance.

For and on behalf of
HSBC Bank (China) Company Limited, Shenzhen Branch

Faye Zhou	Sunny Poon
Vice President	Senior Vice President & Division Head
Commercial Banking	Commercial Banking
/ap
	Accepted by
	Zastron Electronic (Shenzhen) Company Limited.
	(Authorised signature with chop)

Zastron Electronic (Shenzhen) Company Limited 7 June 2007

Appendix

To make you better understand the Bank’s policy in respect of its storage and processing of any information supplied by the potential or actual customers and/or other related individuals and entities, the Bank makes the following statements:

(a)	in connection with any proposed or existing transaction between you and the Bank, the Bank may request you to supply (or arrange to supply) the Bank with information relating to yourself(ves), your directors, shareholders or other officers, as well as proposed or actual guarantors or security providers (if any) (the “Information”);
(b)	such Information may be used by the Bank for the purpose of conducting credit and other checks on you, evaluating any proposed, existing or past transaction between you and the Bank, formulating an offer for any such proposed or existing transaction or for any other purpose relating to any such transaction, and/or for the purpose of promoting, improving and furthering the provision of other financial services by the Bank and any other member of the HSBC Group to you generally, and/or for any other purpose as in accordance with the Bank’s general policy on disclosure of information as may be notified to you from time to time;
(c)	such Information will be kept confidential but the Bank may provide such Information to any of the following parties for the purposes set out above (without the need to giving any further notice to the individuals to whom such Information relates ):
(i)	any agent, contractor or third party service provider (whether situated within or outside the People’s Republic of China) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(ii)	credit reference agencies;
(iii)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations, rules or judicial process;
(iv)	any actual or proposed participant or sub-participant of any proposed or existing transaction between you and the Bank;
(v)	any of the Bank’s officers and employees;
(d)	you shall ensure that all the persons as referred to in (a) above, whose personal or other data have been included in the Information provided to the Bank, have consented to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this letter;
(e)	if you maintain an account/accounts with the Bank, you shall be further subject to any provisions in those terms and conditions applicable to such account(s) on the Bank’s storage and processing of the customers’ and other information. These account terms and conditions, the provisions referred to in this letter as well as any other agreement between you and the Bank relating to the Bank’s storage and processing of the customers’ and other information shall supplement, rather than conflict with, each other;
(f)	the Bank may retain any such Information for any time period as it considers necessary or desirable (whether or not you have ceased to be a customer or potential customer of the Bank), and all the provisions in this letter shall remain effective during the whole retention period of such Information.

The above-mentioned explanation is to make you have a better knowledge of the Bank’s data privacy policies in respect of the information of the customers and other related persons/entities. In any event, the Bank will remain responsible for ensuring the confidentiality of such information. The Bank appreciates that you have selected, or are interested in selecting, the Bank’s service, and we commit to providing you with more and more quality banking products and services.

Yours sincerely,

HSBC Bank (China) Company Limited Shenzhen Branch

EX-4.21

Exhibit 4.21

OUR REF: AOC-CMB-SZN (FZ) (070529).AP

CONFIDENTIAL {PRIVATE}

Jetup Electronic (Shenzhen) Company Limited
Sanyidui Industrial Zone,
Zhoushi Road, Jiuwei Village,
Xixiang Town, Bao’an District,
Shenzhen, P.R.C

Attn: Mr. John Farina/ Mr. Vincent Hoe

7 June 2007

Dear Sirs,

Banking Facilities
Customer No. 002-025328

With reference to our recent discussion, we are pleased to advise that we have reviewed your banking facility and offer a renewal within the following revised limit which will be made available on the specific terms and conditions outlined herein and upon the satisfactory completion of security detailed below. Notwithstanding anything to the contrary in this facility letter, this facility is also subject to our overriding right of suspension, withdrawal and repayment on demand at any time, and to review at any time, and in any event, by 31 May 2008.

Borrower:

( “Jetup Electronic (Shenzhen) Company Limited.” )

Lender:

HSBC Bank (China) Company Limited Shenzhen Branch

Jetup Electronic (Shenzhen) Company Limited 7June2007

Facility /Amount:

	New	Previously
Tranche I Import Facilities	HKD70,000,000.-	HKD100,000,000.-
Documentary Credits to your Suppliers and Import Loan Facilities in either HKD or Foreign Currency (USD or JPY equiv.) for up to 120 days, less any usance / Credit periods granted by your suppliers.
within which
Goods under your control and/or Trust Receipts.	(HKD70,000,000.-)	(HKD100,000,000.-)
Tranche II 3 Year HKD Loan (or USD equiv.)	HKD40,000,000.-	Nil

Tenor (Tranche II):

3 years calculated from the respective loan drawdown date.

Repayment (Tranche II):

By quarterly equal instalments starting 3 months calculated from the respective drawdown date.

Interest (Tranche I & Tranche II):

To be charged at 0.55% per annum over 1, 2 or 3 month Hong Kong/Singapore/London Interbank Money Market Offer Rate (“HIBOR” / “SIBOR”/ “LIBOR”) and payable in arrears.

Utilisation of the HKD (USD) Loan facilities is subject to the following conditions:

1)	2 working days advance notice of drawdown is to be given to us.
2)	Each drawdown to be for a minimum amount of HKD1,000,000.- (or its equivalent), and in multiples of HKD500,000.- (or its equivalent).

Commission:

Documentary Credits opening commission for each validity of three months or part thereof (minUSD24.00) to be revised and charged as below and payable in full at the time of issuance of all DCs.

	New			Previous
For DC amount below USD100k or its equivalent		0.10	%		0.12	%
For DC amount between USD100k (USD100k inclusive) and USD250k or its equivalent		0.08	%		0.10	%
For DC amount between USD250k (USD250k inclusive) and USD400k or its equivalent		0.06	%		0.08	%
For DC amount above USD400k (USD400k inclusive) or its equivalent		0.04	%		0.06	%

Jetup Electronic (Shenzhen) Company Limited 7June2007

Default Interest:

Please note that interest will be payable on sums which are overdue or overlimit (as well as amounts demanded and not paid) or (in respect of loan amount) used for purposes other than the purpose of loan stated in this letter in respect of all or any of the facility and such interest will be charged by the Lender as hereunder.

Overdue or overlimit sums: Default interest is charged at the stipulated interest rate marked up by 3%.

Loan amount used for purposes other than stated in this letter: Default interest is charged at the stipulated interest rate marked up by 5%.

For avoidance of doubt, the impost of default interest as mentioned above shall not be deemed as the Lender’s acknowledgement or acceptance of any such default event as mentioned above and shall be without prejudice to any rights of the Lender as described in the first paragraph of this facility letter.

Prepayment:

With the Lender’s prior approval (which will not be withheld, provided that the Lender is satisfied that the funds utilized are generated from Borrower’s internal resources out of cash flow rather than from external refinancing), during an interest period the total amount of a drawing may, with 5 working days advance notice to the Lender, be repaid subject to the usual penalties (i.e. the differential between the return the Lender would have received had the loan run to maturity and the return the Lender is able to obtain by the placing of the funds repaid for the remainder of the period in the market). Each prepayment should be in a minimum of HKD5,000,000.- (or, if the relevant drawing is made in any other currency, the equivalent amount in such other currency) and in an integral multiple of HKD1,000,000.- (or, if the relevant drawing is made in any other currency, the equivalent amount in such other currency).

Security:

As security, we continue to hold the Corporate Guarantee for HKD100,000,000.- dated 1 Dec 2005 from J.I.C. Technology Company Limited together with a certified copy of Board Resolution dated 1 Dec 2005 and supporting Legal Opinion dated 9Jan2006.

For the revised facility, we shall require Corporate Guarantee from J.I.C. Technology Company Limited for a revised amount of HKD110,000,000.-, to be supported by board resolution. Existing Corporate Guarantee dated 1 Dec 2005 shall be returned to you upon the receipt of the new one.

The security provider’s internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the provision of the Security and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Security in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the security provider is a foreign entity) has been duly made and submitted to the Lender.

The Borrower undertakes that:

(i) upon the realisation of any foreign guarantee/security in respect of this facility, it shall conduct foreign debt registration with the local State Administration of Foreign Exchange (“SAFE”) in a timely manner but in no event later than 15 days after realisation of such foreign guarantee/security;

Jetup Electronic (Shenzhen) Company Limited 7June2007

(ii) to procure the successful registration with SAFE as mentioned in the foregoing item (i), the Borrower shall ensure that it has sufficient borrowing gap at the time of the registration of the realised foreign guarantee/security;

(iii) throughout the term of the facility and as long as the facility is existing or any indebtedness under the facility is outstanding, the Borrower shall keep the Lender informed of the amount of its borrowing gap (calculated as the balance of (i) its approved total investment amount less (ii) its registered capital) and shall forthwith advise the Lender of any change in the borrowing gap; and

(iv) the Borrower shall take all necessary measures to ensure that all the indebtedness owed to the Lender under this facility be fully settled in the same currency as that of such indebtedness.

Conditions Precedent:

1) The Borrower shall present to the Lender a valid Borrowing Card issued by the People’s Bank of China.

2) Certified true copies of all government approvals and certificates in relation to the establishment of the Borrower shall be submitted to the Lender.

3) The Borrower has provided its internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the facilities hereunder and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the facilities hereunder in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the Borrower is a foreign entity).

4) In the event that the Lender’s making available any facility hereunder is subject to regulatory approval or the completion of other procedures with the regulator(s), the acquisition of such regulatory approval and the completion of such procedures with regulator(s).

5) The Lender is satisfied that all the security(ies) stated in the “Security” item above (if any) has/have been established and is/are valid and enforceable. The security provider’s internal authorization document (such as shareholders’ resolution, board resolution) approving (or authorizing others to approve) the provision of the Security and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Security in strict compliance with its articles of association and the PRC Company Law (or equivalent or similar law if the security provider is a foreign entity) has been duly made and submitted to the Lender.

6) The appendix to the facility letter, which relates to the Lender’s storage and processing of customer’s information shall form an integral part of the facility letter and be binding on the Borrower.

Other Conditions:

1) Without prejudice to any security or other priority right to which the Lender is entitled (if any), this facility shall rank at least pari-passu with all present and future borrowings of the Borrower. The Borrower undertakes to advise the Lender in advance of any future borrowings.

Jetup Electronic (Shenzhen) Company Limited 7June2007

2) The Borrower should not create or attempt to create or permit to subsist any mortgage, debenture, charge, pledge, lien or other encumbrance upon, or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) on the whole or any part of present or future assets of the Borrower without Lender’s prior written consent..

3) Audited yearly financial statements of the Borrower and the Guarantor to be prepared by qualified accountants shall be provided to the Lender whenever available but in any event no later than 120 days from the financial year-ends.

4) Other financial or operational information of the Borrower as from time to time reasonably requested by the Lender.

5) We may, at our sole and absolute discretion, refuse to allow drawings under the facilities if the transaction in question does not meet our operational requirements in respect of these facilities.

Termination Event:

The Borrower undertakes to notify the Lender on any change of its shareholder percentage and, without prejudice to the generality of the Lender’s overriding right of suspension, withdrawal and repayment on demand at any time, the Lender shall have the right to terminate and withdraw the Facility if J.I.C. Technology Company Limited’s beneficial interest in the Borrower is reduced to below 50%.

Expenses:

All out-of-pocket expenses including but not limited to the PRC stamp duty and the legal fees in relation to the preparation, negotiation, execution and enforcement of this facility shall be borne by the Borrower.

Taxation and Deduction:

All payments of principal, interest, fees and other expenses shall be made by the Borrower free and clear of taxes, levies, imposts, duties, charges or withholding of whatsoever nature.

Assignment:

Without prejudice to any right of assignment enjoyed by the Lender pursuant to law or any contract, the Lender may, without any party’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or any of the Lender’s sub-branch(es) (if any).

Governing Laws:

This letter shall be governed by and construed in accordance with the laws of the People’s Republic of China.

Jurisdiction:

The Borrower submits to the jurisdiction of the PRC court at the principal office of the Lender. Nothing in this Clause limits the right of the Lender to bring proceedings against the Borrower in connection with this facility in any other court of any competent jurisdiction.

Jetup Electronic (Shenzhen) Company Limited 7June2007

(i) Section 83 of the HK Banking Ordinance and (ii) the CBRC Administration Rules on the Connected Transactions of Commercial Banks with Insiders and Shareholders (the “CBRC Rules on Connected Transactions”):

Please note that Section 83 of the Banking Ordinance and the CBRC Rules on Connected Transactions have imposed on us as a bank certain limitations on advances to persons related to our directors or employees or advances that are of the “connected transaction” nature. In acknowledging this Facility Letter you should advise us whether you are in any way related to any of our directors or employees within the meaning of Section 83 or otherwise are a “connected party” defined in the CBRC Rules on Connected Transactions and in the absence of such advice we will assume that you are not so related. We would also ask, should you become so related subsequent to acknowledging this Facility Letter, that you immediately advise us in writing.

We may provide any information relating to any of your accounts with us and any facilities we may provide to you from time to time or their conduct or any other information concerning your relationship with us to any other company or office which at the relevant time belongs to or is part of the HSBC Group.

The facility offer will remain open for acceptance until the close of business on 07July2007 and if not accepted by that date will be deemed to have lapsed (unless otherwise agreed by us in writing).

We shall be grateful if you could arrange for the authorized signatory(ies) of your company in accordance with the terms of the shareholders’ resolution or board resolution (as the case may be) to be given to us, to sign and return to us the duplicate copy of this letter to signify your understanding and acceptance of the terms and conditions under which the facility is granted.

We are pleased to be of continued assistance.

For and on behalf of
HSBC Bank (China) Company Limited, Shenzhen Branch

Faye Zhou	Sunny Poon
Vice President	Senior Vice President & Division Head
Commercial Banking	Commercial Banking
/ap
Bcc: HSBC SZN Credit Operation
	For and on behalf of
	Jetup Electronic (Shenzhen) Company Limited
	(Authorized signature and chop)

Jetup Electronic (Shenzhen) Company Limited 7June2007

Appendix

To make you better understand the Bank’s policy in respect of its storage and processing of any information supplied by the potential or actual customers and/or other related individuals and entities, the Bank makes the following statements:

(a)	in connection with any proposed or existing transaction between you and the Bank, the Bank may request you to supply (or arrange to supply) the Bank with information relating to yourself(ves), your directors, shareholders or other officers, as well as proposed or actual guarantors or security providers (if any) (the “Information”);
(b)	such Information may be used by the Bank for the purpose of conducting credit and other checks on you, evaluating any proposed, existing or past transaction between you and the Bank, formulating an offer for any such proposed or existing transaction or for any other purpose relating to any such transaction, and/or for the purpose of promoting, improving and furthering the provision of other financial services by the Bank and any other member of the HSBC Group to you generally, and/or for any other purpose as in accordance with the Bank’s general policy on disclosure of information as may be notified to you from time to time;
(c)	such Information will be kept confidential but the Bank may provide such Information to any of the following parties for the purposes set out above (without the need to giving any further notice to the individuals to whom such Information relates ):
(i)	any agent, contractor or third party service provider (whether situated within or outside the People’s Republic of China) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(ii)	credit reference agencies;
(iii)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations, rules or judicial process;
(iv)	any actual or proposed participant or sub-participant of any proposed or existing transaction between you and the Bank;
(v)	any of the Bank’s officers and employees;
(d)	you shall ensure that all the persons as referred to in (a) above, whose personal or other data have been included in the Information provided to the Bank, have consented to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this letter;
(e)	if you maintain an account/accounts with the Bank, you shall be further subject to any provisions in those terms and conditions applicable to such account(s) on the Bank’s storage and processing of the customers’ and other information. These account terms and conditions, the provisions referred to in this letter as well as any other agreement between you and the Bank relating to the Bank’s storage and processing of the customers’ and other information shall supplement, rather than conflict with, each other;
(f)	the Bank may retain any such Information for any time period as it considers necessary or desirable (whether or not you have ceased to be a customer or potential customer of the Bank), and all the provisions in this letter shall remain effective during the whole retention period of such Information.

The above-mentioned explanation is to make you have a better knowledge of the Bank’s data privacy policies in respect of the information of the customers and other related persons/entities. In any event, the Bank will remain responsible for ensuring the confidentiality of such information. The Bank appreciates that you have selected, or are interested in selecting, the Bank’s service, and we commit to providing you with more and more quality banking products and services.

Yours sincerely
HSBC Bank (China) Company Limited Shenzhen Branch

EX-4.22

Exhibit 4.22

(HK-law-governed Version)

To : HSBC Bank (China) Company Limited Shenzhen Branch

GUARANTEE BY LIMITED COMPANY (Limited Amount — Under Common/Corporate Seal)

1.	Definitions
	“Bank” means HSBC Bank (China) Company Limited Shenzhen Branch and its successors and assigns;
	“Banking Facilities” means such facilities as the Bank may make or continue to make available to the Customer or to any other person at the request of the Customer;
	“Customer” means the person whose name and address are specified in the Schedule;
	“Default Interest” means interest at such rate as the Bank may specify, compounded monthly if not paid on the dates specified by the Bank;
	“Exchange Rate” means the rate for converting one currency into another currency which the Bank determines to be prevailing in the relevant foreign exchange market at the relevant time, such determination to be conclusive and binding on the Guarantor;
	“Guaranteed Moneys” means (i) all moneys in any currency owing by the Customer to the Bank at any time, actually or contingently, in any capacity, alone or jointly with any other person, (ii) interest on such moneys (both before and after any demand or judgment), to the date on which the Bank receives payment, at the rates payable by the Customer or which would have been payable but for any circumstance which restricts payment and (iii) expenses of the Bank in enforcing this Guarantee on a full indemnity basis;
	“Guarantor” means the person whose name and address are specified in the Schedule;
	“Maximum Liability” means the sum specified in the Schedule plus Default Interest on that sum or part thereof (to the extent that it is not paid by the Guarantor on demand by the Bank) and expenses of the Bank in enforcing this Guarantee on a full indemnity basis; where a liability for Guaranteed Moneys is incurred in a currency different from the currency in which the Maximum Liability is stated and the equivalent of that liability in the currency in which the Maximum Liability is stated, calculated at the Exchange Rate, has increased since it was incurred, that increase shall be added to the Maximum Liability;
	“person” includes an individual, firm, company, corporation and an unincorporated body of persons; and
	“Process Agent” means the person, if any, whose name and Hong Kong address are specified in the Schedule.

2. Guarantee

     In consideration of the Banking Facilities, the Guarantor guarantees to pay the Guaranteed Moneys to the Bank on demand.

     The liability of the Guarantor shall not exceed the Maximum Liability.

     The Guarantor shall pay Default Interest (to the extent that it is not paid by the Customer) on the Guaranteed Moneys from the date of demand by the Bank on the Guarantor until the Bank receives payment of the whole of the Guaranteed Moneys (both before and after any demand or judgment or any circumstance which restricts payment by the Customer).

     A certificate of balance signed by any duly authorized officer of the Bank shall be conclusive evidence against the Guarantor of the amount of the Guaranteed Moneys owing at any time.

     The Bank shall be entitled to retain this Guarantee and any security it has in respect of the Guaranteed Moneys for such period as the Bank may certify to the Guarantor to be appropriate in order to protect the interests of the Bank in respect of the Guaranteed Moneys.

3. Continuing and Additional Security

     This Guarantee is a continuing security and shall secure the whole of the Guaranteed Moneys until one calendar month after receipt by the Bank of notice in writing by the Guarantor or a liquidator or receiver of the Guarantor to terminate it. Nevertheless and despite the giving of such notice, this Guarantee shall continue to apply to the Guaranteed Moneys in respect of which the Customer is or becomes actually or contingently liable up to such termination and the Guarantor guarantees to pay such Guaranteed Moneys to the Bank on demand whether that demand is made before, at the time of or after such termination.

     This Guarantee is in addition to, shall not be affected by and may be enforced despite the existence of any other guarantee or security held by the Bank.

4.	Customer’s Accounts
	The Bank may, at any time and despite the termination of this Guarantee, continue any existing account and open any new account in the name of the Customer and no subsequent transactions, receipts or payments involving such new accounts shall affect the liability of the Guarantor.

1

5. Payments

     Payments by the Guarantor shall be made to the Bank as specified by the Bank without any set-off, counterclaim, withholding or condition of any kind except that, if the Guarantor is compelled by law to make such withholding, the sum payable by the Guarantor shall be increased so that the amount actually received by the Bank is the amount it would have received if there had been no withholding.

     Payment by the Guarantor to the Bank shall be in the currency of the relevant liability or, if the Bank so agrees in writing, in a different currency, in which case the conversion to that different currency shall be made at the Exchange Rate.

     No payment to the Bank under this Guarantee pursuant to any judgment, court order or otherwise shall discharge the obligation of the Guarantor in respect of which it was made unless and until payment in full has been received in the currency in which it is payable under this Guarantee and, to the extent that the amount of any such payment shall, on actual conversion into such currency, at the Exchange Rate, fall short of the amount of the obligation, expressed in that currency, the Guarantor shall be liable for the shortfall.

     Any moneys paid to the Bank in respect of the Guaranteed Moneys may be applied in or towards satisfaction of the same or placed to the credit of such account as the Bank may determine with a view to preserving its rights to prove for the whole of the Guaranteed Moneys.

     If any moneys paid to the Bank in respect of the Guaranteed Moneys are require dto be repaid by vitue of any law relating to insolvency, bankruptcy or liquidation or for any other reason, the Bank shall be entitled to enforce this Guarantee as if such moneys had not been paid.

6.	Set-off
	The Bank may, at any time and without notice, apply any credit balance to which the Guarantor is entitled on any account with the Bank in or towards satisfaction of the Guaranteed Moneys. For this purpose, the Bank is authorized to purchase, at the Exchange Rate, such other currencies as may be necessary to effect such application with the moneys standing to the credit of such account.

7.	Lien
	The Bank is authorized to exercise a lien over all property of the Guarantor coming into the possession or control of the Bank, for custody or any other reason and whether or not in the ordinary course of banking business, with power for the Bank to sell such property to satisfy the Guaranteed Moneys.

8.

Guarantor as Principal Debtor

The liability of the Guarantor under this Guarantee shall not be discharged or otherwise affected by reason of the Bank entering into any agreement or arrangement with the Customer or any other person or by reason of any legal limitation, disability or incapacity or any other act, omission or circumstance which, but for this provision, would discharge the Guarantor to any extent. Any Guaranteed Moneys which may not be recoverable from the Customer for any such reason shall be recoverable by the Bank from the Guarantor as principal debtor by way of indemnity, on demand, together with Default Interest thereon in accordance with Clause 2.03.

9. Guarantor as Trustee

     The Guarantor shall not, until the whole of the Guaranteed Moneys have been received by the Bank, exercise its rights of subrogation, indemnity, set-off counterclaim against the Customer or its rights to participate in any security the Bank has            in respect of the Guaranteed Moneys, or , unless required by the Bank to do so, to prove in the bankruptcy or liquidation of the Customer. The Guarantor shall hold any amount recovered, as a result of the exercise of any of such rights, on trust for the Bank and shall pay the same to the Bank immediately on receipt.

     The Guarantor has not taken any security from the Customer and agrees not to do so until the Bank has received the whole of the Guaranteed Moneys. Any security taken by the Guarantor in breach of this provision shall be held in trust for the Bank as security for the Guaranteed Moneys and all moneys at any time received in respect thereof shall be paid to the Bank immediately on receipt.

10.	No Waiver
	No act or omission by the Bank pursuant to his Guarantee shall affect its rights, powers and remedies hereunder or any further or other exercise of such rights, powers or remedies.

11. Consent

2

The Guarantor agrees that the Bank may, for such purposes as the Bank may consider reasonably appropriate, disclose and/or obtain information concerning the Guarantor (including details of and relating to all or any transactions or dealings between the Guarantor and the Bank) to or from:

(a)	any agent, contractor or third party service provider (whether situated within or outside Hong Kong) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(b)	credit reference agencies;
(c)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations or judicial process; and
(d)	any actual or proposed participant or sub-participant of the Banking Facilities (or any part thereof).

In the event that such information includes the personal or other data of any third party or individual, the Guarantor confirms and warrants that it has obtained the consent of such third party or individual to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this Clause. The Guarantor will indemnify and hold the Bank harmless from all costs, penalties, damages and other losses incurred as the result of any breach of the terms of this Clause.

12. Assignment

     The Guarantor may not assign or transfer any of its rights or obligations hereunder. The Bank may assign any of its rights hereunder to a person in whose favour its has made an assignment of all or any of the Banking Facilities.

     Without prejudice to the foregoing and any right of assignment enjoyed by the Bank under any applicable law or any other documents, the Bank may, without the Guarantor’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or to any branch or sub-branch of the Bank.

13.

Communications

Any notice, demand or other communication under this Guarantee shall be in writing addressed to the Guarantor at its registered office address or at the last address registered with the Bank and addressed to the Bank at its office specified in the Schedule or such other address as the Bank may notify to the Guarantor for this purpose any may be delivered personally, by leaving it at such address, by post, facsimile transmission or telex and shall be deemed to have been delivered to the Guarantor at the time of personal delivery or on leaving it at such address or on the second day following the day of posting or on the day of dispatch, if sent by facsimile transmission or telex, and to the Bank on the day of actual receipt.

14.	Severability
	Each of the provisions of this Guarantee is severable and distinct from the others and, if one or more of such provisions is or becomes illegal, invalid or unenforceable, the remaining provisions shall not be affected in any way.

15. Governing Law and Jurisdiction

     The Guarantee is governed by and shall be construed in accordance with the laws of the Hong Kong Special Administrative Region (“Hong Kong”).

     The Guarantor submits to the non-exclusive jurisdiction of the Hong Kong courts but this Guarantee may be enforced in the courts of any competent jurisdiction.

16.	Governing Version
	This Guarantee is executed in an English version and/or a Chinese version. In case both versions are executed, the English version is the governing version and shall prevail whenever there is any discrepancy between the English version and the Chinese version.

17.	Process Agent
	If a Process Agent is specified in the Schedule, service of any legal process on the Process Agent shall constitute service on the Guarantor.

18.	Execution
	This Guarantee has been entered into by the Guarantor under its common corporate seal, whichever may be affixed below, on

7 June 2007

3

Schedule

Address of Bank’s Office (for the purpose of Clause 13 only)

8/F, China Resources Building, No. 5001, Shennan Road East, Luohu District, Shenzhen

Details of Customer

Name	*Address
Jetup Electronic (Shenzhen) Co., Ltd.	Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village, Xixiang, Baoan, Shenzben, PRC

Details of Guarantor

Name	*Address
JIC Technology Company Limited	Suites 1506-1508, 15th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong

Specified Sum in Respect of Maximum Liability *

HK$110,000,000.- plus interest, fees and expenses.

Details of Process Agent

Name *Address

Executed under the Seal of the Guarantor in the presence of the following Director(s) and/or Secretary:

Signature of Director/Secretary		Signature of Director/Secretary
	Original Signed By Mr. Chui Kam Wai		Original Signed By Mr. Yeoh Teck Hooi
Name		Name
	Chui Kam Wai		Yeoh Teck Hooi
Office		Office
	Director		Director
Identification Document Type and Number		Identification Document Type and Number
	H.K.I.D. No. D438259(6)		H.K.I.D. No. P918457(1)

Witnessed by:

Signature of Witness		Signature of Witness
	Original Signed By Mr. WONG Long Kee		Original Signed By Mr. WONG Long Kee
Name		Name
	WONG Long Kee		WONG Long Kee
Office		Office
	Company Secretary		Company Secretary
Identification Document Type and Number		Identification Document Type and Number
	H.K.I.D. No. K003729(A)		H.K.I.D. No. K003729(A)

*	P O Box is not acceptable
*	Please inset below the principal amount of the Banking Facilities.

4

EX-4.23

Exhibit 4.23

(HK-law-governed Version)

To : HSBC Bank (China) Company Limited Shenzhen Branch

GUARANTEE BY LIMITED COMPANY (Limited Amount — Under Common/Corporate Seal)

1.	Definitions
	“Bank” means HSBC Bank (China) Company Limited Shenzhen Branch and its successors and assigns;
	“Banking Facilities” means such facilities as the Bank may make or continue to make available to the Customer or to any other person at the request of the Customer;
	“Customer” means the person whose name and address are specified in the Schedule;
	“Default Interest” means interest at such rate as the Bank may specify, compounded monthly if not paid on the dates specified by the Bank;
	“Exchange Rate” means the rate for converting one currency into another currency which the Bank determines to be prevailing in the relevant foreign exchange market at the relevant time, such determination to be conclusive and binding on the Guarantor;
	“Guaranteed Moneys” means (i) all moneys in any currency owing by the Customer to the Bank at any time, actually or contingently, in any capacity, alone or jointly with any other person, (ii) interest on such moneys (both before and after any demand or judgment), to the date on which the Bank receives payment, at the rates payable by the Customer or which would have been payable but for any circumstance which restricts payment and (iii) expenses of the Bank in enforcing this Guarantee on a full indemnity basis;
	“Guarantor” means the person whose name and address are specified in the Schedule;
	“Maximum Liability” means the sum specified in the Schedule plus Default Interest on that sum or part thereof (to the extent that it is not paid by the Guarantor on demand by the Bank) and expenses of the Bank in enforcing this Guarantee on a full indemnity basis; where a liability for Guaranteed Moneys is incurred in a currency different from the currency in which the Maximum Liability is stated and the equivalent of that liability in the currency in which the Maximum Liability is stated, calculated at the Exchange Rate, has increased since it was incurred, that increase shall be added to the Maximum Liability;
	“person” includes an individual, firm, company, corporation and an unincorporated body of persons; and
	“Process Agent” means the person, if any, whose name and Hong Kong address are specified in the Schedule.

2. Guarantee

     In consideration of the Banking Facilities, the Guarantor guarantees to pay the Guaranteed Moneys to the Bank on demand.

     The liability of the Guarantor shall not exceed the Maximum Liability.

     The Guarantor shall pay Default Interest (to the extent that it is not paid by the Customer) on the Guaranteed Moneys from the date of demand by the Bank on the Guarantor until the Bank receives payment of the whole of the Guaranteed Moneys (both before and after any demand or judgment or any circumstance which restricts payment by the Customer).

     A certificate of balance signed by any duly authorized officer of the Bank shall be conclusive evidence against the Guarantor of the amount of the Guaranteed Moneys owing at any time.

     The Bank shall be entitled to retain this Guarantee and any security it has in respect of the Guaranteed Moneys for such period as the Bank may certify to the Guarantor to be appropriate in order to protect the interests of the Bank in respect of the Guaranteed Moneys.

3. Continuing and Additional Security

     This Guarantee is a continuing security and shall secure the whole of the Guaranteed Moneys until one calendar month after receipt by the Bank of notice in writing by the Guarantor or a liquidator or receiver of the Guarantor to terminate it. Nevertheless and despite the giving of such notice, this Guarantee shall continue to apply to the Guaranteed Moneys in respect of which the Customer is or becomes actually or contingently liable up to such termination and the Guarantor guarantees to pay such Guaranteed Moneys to the Bank on demand whether that demand is made before, at the time of or after such termination.

     This Guarantee is in addition to, shall not be affected by and may be enforced despite the existence of any other guarantee or security held by the Bank.

4.	Customer’s Accounts
	The Bank may, at any time and despite the termination of this Guarantee, continue any existing account and open any new account in the name of the Customer and no subsequent transactions, receipts or payments involving such new accounts shall affect the liability of the Guarantor.

1

5. Payments

     Payments by the Guarantor shall be made to the Bank as specified by the Bank without any set-off, counterclaim, withholding or condition of any kind except that, if the Guarantor is compelled by law to make such withholding, the sum payable by the Guarantor shall be increased so that the amount actually received by the Bank is the amount it would have received if there had been no withholding.

     Payment by the Guarantor to the Bank shall be in the currency of the relevant liability or, if the Bank so agrees in writing, in a different currency, in which case the conversion to that different currency shall be made at the Exchange Rate.

     No payment to the Bank under this Guarantee pursuant to any judgment, court order or otherwise shall discharge the obligation of the Guarantor in respect of which it was made unless and until payment in full has been received in the currency in which it is payable under this Guarantee and, to the extent that the amount of any such payment shall, on actual conversion into such currency, at the Exchange Rate, fall short of the amount of the obligation, expressed in that currency, the Guarantor shall be liable for the shortfall.

     Any moneys paid to the Bank in respect of the Guaranteed Moneys may be applied in or towards satisfaction of the same or placed to the credit of such account as the Bank may determine with a view to preserving its rights to prove for the whole of the Guaranteed Moneys.

     If any moneys paid to the Bank in respect of the Guaranteed Moneys are require dto be repaid by vitue of any law relating to insolvency, bankruptcy or liquidation or for any other reason, the Bank shall be entitled to enforce this Guarantee as if such moneys had not been paid.

6.	Set-off
	The Bank may, at any time and without notice, apply any credit balance to which the Guarantor is entitled on any account with the Bank in or towards satisfaction of the Guaranteed Moneys. For this purpose, the Bank is authorized to purchase, at the Exchange Rate, such other currencies as may be necessary to effect such application with the moneys standing to the credit of such account.

7.	Lien
	The Bank is authorized to exercise a lien over all property of the Guarantor coming into the possession or control of the Bank, for custody or any other reason and whether or not in the ordinary course of banking business, with power for the Bank to sell such property to satisfy the Guaranteed Moneys.

8.

Guarantor as Principal Debtor

The liability of the Guarantor under this Guarantee shall not be discharged or otherwise affected by reason of the Bank entering into any agreement or arrangement with the Customer or any other person or by reason of any legal limitation, disability or incapacity or any other act, omission or circumstance which, but for this provision, would discharge the Guarantor to any extent. Any Guaranteed Moneys which may not be recoverable from the Customer for any such reason shall be recoverable by the Bank from the Guarantor as principal debtor by way of indemnity, on demand, together with Default Interest thereon in accordance with Clause 2.03.

9. Guarantor as Trustee

     The Guarantor shall not, until the whole of the Guaranteed Moneys have been received by the Bank, exercise its rights of subrogation, indemnity, set-off counterclaim against the Customer or its rights to participate in any security the Bank has            in respect of the Guaranteed Moneys, or , unless required by the Bank to do so, to prove in the bankruptcy or liquidation of the Customer. The Guarantor shall hold any amount recovered, as a result of the exercise of any of such rights, on trust for the Bank and shall pay the same to the Bank immediately on receipt.

     The Guarantor has not taken any security from the Customer and agrees not to do so until the Bank has received the whole of the Guaranteed Moneys. Any security taken by the Guarantor in breach of this provision shall be held in trust for the Bank as security for the Guaranteed Moneys and all moneys at any time received in respect thereof shall be paid to the Bank immediately on receipt.

10.	No Waiver
	No act or omission by the Bank pursuant to his Guarantee shall affect its rights, powers and remedies hereunder or any further or other exercise of such rights, powers or remedies.

11. Consent

2

The Guarantor agrees that the Bank may, for such purposes as the Bank may consider reasonably appropriate, disclose and/or obtain information concerning the Guarantor (including details of and relating to all or any transactions or dealings between the Guarantor and the Bank) to or from:

(a)	any agent, contractor or third party service provider (whether situated within or outside Hong Kong) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(b)	credit reference agencies;
(c)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations or judicial process; and
(d)	any actual or proposed participant or sub-participant of the Banking Facilities (or any part thereof).

In the event that such information includes the personal or other data of any third party or individual, the Guarantor confirms and warrants that it has obtained the consent of such third party or individual to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this Clause. The Guarantor will indemnify and hold the Bank harmless from all costs, penalties, damages and other losses incurred as the result of any breach of the terms of this Clause.

12. Assignment

     The Guarantor may not assign or transfer any of its rights or obligations hereunder. The Bank may assign any of its rights hereunder to a person in whose favour its has made an assignment of all or any of the Banking Facilities.

     Without prejudice to the foregoing and any right of assignment enjoyed by the Bank under any applicable law or any other documents, the Bank may, without the Guarantor’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or to any branch or sub-branch of the Bank.

13.

Communications

Any notice, demand or other communication under this Guarantee shall be in writing addressed to the Guarantor at its registered office address or at the last address registered with the Bank and addressed to the Bank at its office specified in the Schedule or such other address as the Bank may notify to the Guarantor for this purpose any may be delivered personally, by leaving it at such address, by post, facsimile transmission or telex and shall be deemed to have been delivered to the Guarantor at the time of personal delivery or on leaving it at such address or on the second day following the day of posting or on the day of dispatch, if sent by facsimile transmission or telex, and to the Bank on the day of actual receipt.

14.	Severability
	Each of the provisions of this Guarantee is severable and distinct from the others and, if one or more of such provisions is or becomes illegal, invalid or unenforceable, the remaining provisions shall not be affected in any way.

15. Governing Law and Jurisdiction

     The Guarantee is governed by and shall be construed in accordance with the laws of the Hong Kong Special Administrative Region (“Hong Kong”).

     The Guarantor submits to the non-exclusive jurisdiction of the Hong Kong courts but this Guarantee may be enforced in the courts of any competent jurisdiction.

16.	Governing Version
	This Guarantee is executed in an English version and/or a Chinese version. In case both versions are executed, the English version is the governing version and shall prevail whenever there is any discrepancy between the English version and the Chinese version.

17.	Process Agent
	If a Process Agent is specified in the Schedule, service of any legal process on the Process Agent shall constitute service on the Guarantor.

18.	Execution
	This Guarantee has been entered into by the Guarantor under its common corporate seal, whichever may be affixed below, on 22 June 2007

3

Schedule

Address of Bank’s Office (for the purpose of Clause 13 only)

8/F, China Resources Building, No. 5001, Shennan Road East, Luohu District, Shenzhen

Details of Customer

Name	*Address
Zastron Electronic (Shenzhen) Co., Ltd.	Gu Su Industrial Estate, Xixiang, Baoan, Shenzhen, PRC

Details of Guarantor

Name	*Address
Nam Tai Electronics, Inc.	Suites 1506-1508, 15th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong

Specified Sum in Respect of Maximum Liability *

USD10,000,000.- plus interest, fees and expenses.

Details of Process Agent

Name *Address

Executed under the Seal of the Guarantor in the presence of the following Director(s) and/or Secretary:

Signature of Director/Secretary	Signature of Director/Secretary
Original Signed By Mr. KOO Ming Kown	Original Signed By Ms. Lei Lai Fong, Patinda
Name	Name
KOO Ming Kown	Lei Lai Fong, Patinda
Office	Office
Director	Director
Identification Document Type and Number	Identification Document Type and Number
Canadian Passport No. BA300240	H.K.I.D. No. G185467(3)

Witnessed by:

Signature of Witness	Signature of Witness
Original Signed By Ms. Leung Wai Fan	Original Signed By Ms. Leung Wai Fan
Name	Name
Leung Wai Fan	Leung Wai Fan
Office	Office
Company Secretary	Company Secretary
Identification Document Type and Number	Identification Document Type and Number
H.K.I.D. No. G717749(5)	H.K.I.D. No. G717749(5)

*	P O Box is not acceptable
*	Please inset below the principal amount of the Banking Facilities.

4

EX-4.24

Exhibit 4.24

Original

Block No. A614-0377

S/N of land use scheme

Shenzhen Land Use Right Transfer Agreement

Shenzhen Land No. (2007) 4150 Agreement

1. Two Parties of this Agreement

Transferee: Shenzhen Municipal Administration of Land, Resources and Real Estate      (Party A)
Legal representative	Name: Zhang Shiming	Title: Director of the Bureau
Address: Jianyi Building, Zhenxing Road, Futian District, Shenzhen		Telephone: 83788590

Transferee: Zastron Electronic (Shenzhen) Co., Ltd.		(Party B)
Legal representative	Name: Patinda Lei		Title: Chairman
Address: Gusu Industrial Estate, Xixiang, Baoan, Shenzhen, PRC			Telephone: 27495818

Transferee:		(Party B)
Legal representative	Name:		Title:
Address:			Telephone:

Transferee:		(Party B)
Legal representative	Name:		Title:
Address:			Telephone:

2. Pursuant to correlative laws and regulations of the People’s Republic of China and relevant regulations of Shenzhen, both parties conclude this Agreement on the principle of consultation, voluntary and compensatory.

3. Party A transfers the use right of the land according to this agreement. This land is owned by the People’s Republic of China. Underground natural resources and storage is out of the transfer scope.

4. Party A shall transfer the use right of the land with the land block number of A614-0377 and the area of 118001.3 sqm (refer to the area within the red line of the topographic map) to Party B on the date of entry into force of the Agreement.

5. The term of land use right of this land shall be 50 years from the effective date of this Agreement.

6. This land is used for industrial land (high-tech project).

7. Nature of this land is not a merchandise.

8. Land use requirements:

1)	The nature of the main building
	Factory, dormitory and other supporting facility
2)	Building cover rate (building density): £45%
3)	Building volume rate (density of floor area): £2.25
4)	The GFA to be reckoned in volume rate shall not exceed 265,000 sqm:
	181,000sqm of factory, 10,000sqm of R&D, 8,000sqm of office, 61,000sqm of dormitory, and 5,000sqm of canteen
	Area for administration service and supporting facility shall be less than 7% of the total land area (i.e. less than 8,260sqm),
5)	The floor number: 5 floors of the factory building, 15floors of the office building
6)	Red line leaving for road and general layout
	It shall be implemented according to Shenzhen regulations and permits HQ-2007-0052 Shenzhen Construction Site Planning Permit.
7)	Green rate:                               /
8)	Construction site leveling and elevation (Huanghai Vertical Datum)
	It shall be controlled according to planning.
9)	Building distance: meet the demand of Shenzhen Urban Planning Standards and Rules and norms.
10)	Others
	It shall be implemented according to Shenzhen regulations and permits HQ-2007-0052 Shenzhen Construction Site Planning Permit.
	Design of all buildings shall be consistent with the existing design standards and norms of China.

9. Party B agrees to be responsible to green, mange and maintain            /          sqm (refer to the green line of the topographic map) of green land and bear all relevant fees. Such green land shall be owned by the government. Party B shall accept inspection and supervision by urban garden and greening departments.

Party B agrees to be responsible of           /           sqm (refer to the brown line of the topographic map) of roads and bear all relevant fees. Such roads shall be owned by the government. Vehicles and passengers are allowed to use these roads for free.

10. This land block shall be transferred for (RMB) Eight Million Four Hundred and Ninety-Six Thousand and Ninety-Four Only (RMB 8,496,094).

The amount for land development shall be (RMB) Seven Million Eighty Thousand and Seventy-Eight Only (RMB 7,080,078).

The amount for municipal supporting facility is (RMB) Forty-One Million Sixty-Four Thousand and Four Hundred and Fifty-Two Only (RMB 41,064,452)

The total amount is (RMB) 56,640,624 only.

11. The method and time of payment shall be determined by the supplementary agreement signed

by both parties.

12. In addition to fees for land use right transfer, land development and municipal supporting facility, Party B shall pay land use fee. Party B shall go through land use fee registration at the time of entry into force of the land transfer agreement.

13. In case Party B fails to pay land use right transfer fee, land development fee and municipal supporting facility fee according to provisions of this agreement and supplementary agreement and land use fee according to relevant regulations during the period of land use, Party A is allowed to not handle property rights registration, building permit and other relevant procedures or take other restrictive measures.

14. In case Party B transfers, leases or mortgages the land use right or applies the land use right in other economic activities according to laws and regulations, regulations of Shenzhen and provisions hereof during the land use term, the legal rights and interests of Party B shall be protected by the law. Party B is not allowed to damage the social public interests in developing and operating the land being transferred. Party B shall not dispose this land block in any way before land use right registration is not handled and property ownership certificate is not obtained.

15. Party A shall take back the land use right of the land block being transferred without compensatory when the transferring term of the land stipulated hereby is expired, and obtain buildings and other attachments on the land without compensatory as well. Party B promises to return the land with buildings and attachments to Party A at the time of the expiration of land use right, and handle the procedure of property ownership certificate cancellation within ten days of the expiration, otherwise, Party A is allowed to cancel the property ownership certificate directly. Party B may ask for renewal within six months before the expiration if it needs to continue using this land block. Party B shall sign a new land use right transfer agreement with Party A, pay land use transfer fee, land development fee and municipal supporting facility fee, and handle the procedure of land use right registration after being approved by Party A and new land use term, transfer fee and other conditions are determined.

16. During the performance of this agreement, if certain issues shall be notified to Party B by Party A, Party B agrees that Party A may deliver such notice to the address of Party B spelled out hereby through registration letter or media announcement.

17. Being part of this Agreement, Land Use Rules has the same legal effect with this Agreement. Party B must comply with Land Use Rules.

18.The execution, effectiveness, interpretation, performance and settlement of dispute of this Agreement shall be governed by laws of the People’s Republic of China.

19.Any dispute arising from the performance of this Agreement shall be settled by the parties through friendly discussion. If not being settled by discussion, the parties may bring a lawsuit before the People’s Court.

20. The effectiveness of this Agreement shall be subject to the Supplementary Agreement signed by both parties.

21. This Agreement is executed in five counterparts, three of them shall be held by Party B and the others shall be held by Party A and delivered to relevant units.

22. Issues not covered hereby may be clarified by agreement signed by both parties through negotiation.

23. This land block shall be self-developed by Party B.

24. This land block can only be used for projects determined at the time of being approved by the government (digital audio and multimedia broadcasting project, RF module and spare parts of mobile phone, and large, medium and small color LCD module project).

25. This land block is not allowed to be transferred, or used for obtaining the property ownership certificate in segmentation, or used for mortgage without approval.

Party A: Shenzhen State Land Resource and Property Management Bureau (seal)
Party B: Zastron Electronic (Shenzhen) Co., Ltd. (seal)
Legal Representative	Legal Representative
Authorized agent:	Authorized agent:
	Signed on Jun, 30, 2007
	Signed in Bao’anXingcheng

Appendix

1. Land Use Rules

This Rules is formulated in order to truly perform the Shenzhen Land Use Right Transfer Agreement (hereafter Land Use Right Transfer Agreement), ensure the implementation of the urban planning of Shenzhen, properly use the land and clarify the responsibilities of the land user.

Definitions

1) Terms pertaining to the Land Use Right Transfer Agreement shall be subject to definitions hereof.

Topographic map:	refers to a map made with certain scale to demonstrate the location, boundary and area of a land.
Land use right:	refers to that Shenzhen State Land Resource and Property Management Bureau provides the state land with specified block, term, purpose and other conditions to the transferee of the land use right according to the laws, and the transferee can occupy, use, gain interests, dispose the land according to laws so as to obtain the right of developing, operating and managing the land according to the Land Use Right Transfer Agreement.
Land use right transfer:	refers to that the transferee transfers the land use right again in accordance with the laws and the Land Use Right Transfer Agreement.
Take back land without compensation:	refers to that the State Land Resource and Property Management Bureau terminates the Land Use Right Transfer Agreement in case the land user fails to perform the Agreement or breaks the Rules in developing and constructing; or the Bureau takes back the land use right without compensation when the term is expired, and the land user returns the land with buildings and attachments on it for free and loses all its rights spelled out in the Land Transfer Agreement.
Land use term:	refers to the total years that the transferee enjoys the land use right on the land being transferred.
Coordinate:	refers to a group of ordered digital used to indicate a point on the ground with measurement method. Except otherwise

	defined, coordinate hereof is the independent coordinate system of Shenzhen indicated by rectangular coordinate.
Point defined by boundary stake:	refers to locations of the points of boundary stakes marked on the topographic map after determined and verified on the land.
Land use fee:	refers to the fee paid by the land user to the government according to regulations for using the land.
Temporary land occupation fee:	refers to the rent paid to state land management department by the land user according to regulations for temporarily using the land approved by state land management department.
Municipal engineering:	refers to the infrastructure of the city, including road, water supply, sewage, rain, electricity, telecommunication, street lamp, illumination, and pipeline, plant, station and field of gas, etc., bridge or pedestrian bridge, and other engineering.
Green rate:	refers to the ratio of green area to the land area within the land being used.
Building cover rate:	refers to the ratio of the total base area of all buildings to the land area within the land being used.
Building volume rate:	refers to the ratio of the general area of all buildings to the land area within the specified land block (auxiliary buildings are included), except buildings which is specified not to be calculated.
General floor area:	refers to the sum of the area of all floors. The construction area of the first floor is calculated according to the peripheral horizontal area above the plinth of the exterior wall, the area of and above the second floor is calculated according to the peripheral horizontal area of the exterior wall, area of other places shall be calculated according to the Standard Measurement Construction Area of Building issued by China.
Main building:	refers to the main building defined by the purpose of the land.
Auxiliary building:	refers to other buildings other than the main

	building.
Office building:	refers to buildings used for handling administration issues by government organizations, enterprises and institutions.
Single apartment:	refers to buildings equipped with small cabinet and toilet for single employees.
House:	refers to buildings with numerous units for residents.
Villa:	refers to independent buildings for residents.
Dormitory:	refers to buildings for students and employees to live.
Multi-functional building:	refers to multi-floor or high-floor civil buildings combining a number of functions.
Factory:	refers to buildings for industrial production.
Commercial property:	refers to buildings used for providing living consumption for residents, and commercial activities including shops, foods, hotels, entertainment, insurance, banks and securities.
Property ownership certificate:	refers to the document, by which, the obligee has the right to manage, operate, use and dispose the property.

2. Point Defined by Boundary Stake

2) Concrete boundary stake buried in advance at each inflexion of the coordinate marked on the topographic map shall be verified by the State Land Resources and Property Management Bureau with the land user according to the map after the Land Use Right Transfer Agreement is executed. The land user shall pay the fee for determining such points. Hereafter, the land user must properly protect these stakes. Any modification without permission is not allowed. The land user must timely send a written notice to the State Land Resource and Property Management Bureau to ask for re-setting the stake and bear the corresponding fees in case any of the stakes is damaged or moved.

3. Auxiliary Engineering

3) The land user agrees to construct auxiliary buildings listed in Table 1 and 2 attached herein
within the red line of the topographic map, and guarantees to complete these buildings within / after the effectiveness of the Agreement or on the same day to complete the main building. The land user agrees to provide the engineering of public interests listed in Table 2 for free, and also agrees that the government shall own such property.

The land user agrees that the municipal engineering listed in Table 3 can be constructed on or pass through the planning location of the land within the topographic map without compensation.

4) The land user agrees to provide land for laying out public interests supporting project by

relevant department according to urban planning or let the pipelines of municipal engineering pass through the land.

4. Design, Construction and Completion

5) The land user must submit the drawings of design scheme and investment plan approved by the planning department of Shenzhen to relevant departments within 6 months from the date of entry into force of the Land Use Right Transfer Agreement. Relevant department shall conduct review and approval according to regulations after complete drawings and plans are received.

6) Detailed planning design, construction design and construction purpose, etc within the topographic map must comply with the design points stipulated by this Rules. Should transportation, pipeline, fire protection, environment protection, green, personnel protection and channel, etc. be involved, these designs and purpose shall be submitted to relevant competent department of the municipal government for review and approval, any expense arising from that shall be borne by the land user.

7) The land user shall start construction according to the construction design drawings being approved within one year from the date of the entry into force of Shenzhen Land Use Right Transfer Agreement. The State Land Resource and Property Management Bureau has the right to take back the land without compensation in case the land is not developed and the construction is not started within two years.

The State Land Resource and Property Management Bureau has the right to fine the land user with 20% of the total transfer fee of the land in case the land user fails to develop and use the land according to the conditions and purposes spelled out in the land transfer agreement. The Bureau has the right to take back the land use right with buildings and attachments on it without compensation in case the land user refuses to take correct measures.

8) The land user shall complete construction within three years (except severely affected by earthquake, flood and war) from the day of entry into force of this Agreement. In case the land user fails to complete the construction within the limit, the State Land Resource and Property Management Bureau shall fine the land user from the day of completing the construction and submitting for acceptance which is stipulated by the transfer agreement. The land user shall pay a fine equal to 5% of the total transfer fee in case the construction is delayed within six months; a fine equal to 10% of the total transfer fee in case the construction is delayed over six months but less than one year; a fine equal to 15% of the total transfer fee in case the construction is delayed over one year but less than two years. The Bureau shall take back the land use right with the buildings and attachments on the land without compensation in case the construction is delayed more than two years.

9) Before asking relevant municipal department for quality acceptance, the land user shall ask relevant departments for planning acceptance for the buildings. Planning Acceptance Certificate shall be issued for qualified acceptance, otherwise, the land user will be ordered to take improvement measures in a given period of time.

5. Building Maintenance Activity

10) When taking construction and maintenance activities within the land, the land user shall bear

the liabilities on surrounding environment and facilities as follows:

(1)	Buildings or wasters (soil, gravel and construction waste) relating to the land user shall not occupy any land or cause any damage to facilities beyond the range of the topographic map.
	It shall be submitted to the public security department for approval in case the land user needs to occupy any municipal road.
	It shall be negotiated with the user of the other land outside of the land within the topographic map in case the land user needs to occupy any other land. If the other land has not been approved for any purpose, the land user shall submit the request to the municipal State Land Resource and Property Management Bureau for approval and pay temporarily occupation fee according to regulations.

(2) The land user must pay attention to green and water and soil protection within and around the land being used, and take all measures to prevent water and soil erosion, otherwise, the land user shall bear all economic loss from that.

(3) It is not allowed to dump or store any material or conduct any construction on public land without permission.

(4) The land user must ensure that sewage, dirt, malodorant and excrement which affects environment within the land are properly treated. It is not allowed to damage the surrounding environment.

(5) The land user shall properly protect and avoid causing damages to the municipal facilities within the land during the use term. Otherwise, it shall bear all expense for repairing.

11) The land user is not allowed to open, eradicate and excavate adjacent lands.

12) The land user shall find out the locations of public open and water channels, cables, wires and other facilities and submit the treatment plan for such facilities to relevant departments before any construction or repairing engineering; the land user is not allowed to conduct any construction before being approved. Expenses for re-channeling, re-laying or re-installing any of these facilities shall be paid by the land user.

13) The land user shall be responsible to or entrust administrative staff to take charge of the use and management of all buildings and green lands within the constructed area in accordance with the regulations and requirements of property and urban management departments.

14) The land user shall make passageway for vehicles at (                                  ) as designed by the general layout.

6. Water Supply and Drainage and Electricity Supply

15) The land user shall execute agreements with corresponding departments for water supply and drainage, electricity supply, gas supply and telecommunication, etc. Any corresponding pipe and line shall be buried after the design drawing being approved by relevant department. The land user shall pay all such expenses.

7. Accepting Inspection and Supervision

16) The municipal State Land Resource and Property Management Bureau has the right to inspect and supervise the land using situation within the boundary of the land during the term of land use.

The land user is not allowed to refuse or obstruct such inspection and supervision.

17) The land user is not allowed to occupy any land (such as pile up material and equipment, etc.) beyond the boundary with any excuse. Otherwise, it will be treated as land occupation against the law.

18) The land user shall conduct construction in accordance with the specified purpose and construction design drawings approved by relevant departments of Shenzhen within the land.

19) The land user is not allowed to demolish, modify and reconstruct buildings within the land without the permission from the municipal State Land Resource and Property Management Bureau. Otherwise, the Bureau has the right to order the land user to restore the original condition or demolish such building. If refused, the Bureau is entitled to carry out forceful implementation. All fees shall be borne by the land user.

Supporting Projects of Auxiliary Construction Works

(Table 1)

		Construction Area	Land Area
S/N	Project	(m2)	(m2)	Remark

Supporting Projects of Auxiliary Public Interests Works

(Table 2)

		Construction Area	Land Area
S/N	Project	(m2)	(m2)	Remark

Supporting Projects of Auxiliary Municipal Works

(Table 3)

		Construction Area	Land Area
S/N	Project	(m2)	(m2)	Remark

Shenzhen

Supplementary Agreement of Land Use Right Transfer

No.1 Supplementary Agreement of Shenzhen Land No. (2007) 4150 Agreement

Shenzhen State Land Resource and Property Management

Bureau

Shenzhen Supplementary Agreement of Land Use Right Transfer
No.1 supplementary Agreement of Shenzhen Land No. (2007) 4150 Agreement

Party A: Shenzhen State Land Resource and Property Management Bureau
Party B: Zastron Electronic (Shenzhen) Co., Ltd.

In accordance with Shenzhen Land No. (2007) 4150 Agreement Shenzhen Land Use Right Transfer Agreement (hereafter Shenzhen Land No. (2007) 4150 Agreement), Party A and Party B reach the following agreement on issues concerning to the Agreement:

1.	Party B shall carry out settlements and compensations for the flower and tree plant on the land with relevant department from the execution of Shenzhen Land No. (2007) 4150 Agreement to Dec. 31, 2007. After that, Party B shall present written application to Party A and provide notarized relevant documents which can proof that compensation and land ownership is clarified as well.
2.	Party B shall pay 10% of the total price of the land of Shenzhen Land No. (2007) 4150 Agreement to Party A as the margin upon the execution of the Agreement.
3.	When Party B presents application to Party A as agreed by Provision 1 and Party A accepts the application, if Party A verifies that relevant settlement is handled and land ownership is clarified, Party A shall send Land Price Payment Notice to Party B. Party B shall pay off the full land price agreed by Shenzhen Land No. (2007) 4150 Agreement to Party A within 30 days from the day of the Land Price Payment Notice being sent by Party A. The margin paid by Party B in advance shall be calculated into the land price of Shenzhen Land No. (2007) 4150 Agreement without interest. Shenzhen Land No. (2007) 4150 Agreement shall take effect from the date of the paying off of the land price by Party B.
	In case Party B fails to pay off the full land price agreed by Shenzhen Land No. (2007) 4150 Agreement within 30 days from the day of the Land Price Payment Notice being sent by Party A, Party A shall return the margin paid by Party B in advance without interest and publicly transfer the land through bid invitation, auction and public bidding. Party B shall not present any disagreement for that.
4.	Party A shall not transfer the land to Party B before Shenzhen Land No. (2007) 4150 Agreement comes into force; Party A shall transfer the land to Party B within 30 days from the date of the entry into force of Shenzhen Land No. (2007) 4150 Agreement; Party B shall have no disagreement with the land being transferred with the existing situation on the transferring day.
5.	In case the settlement and compensation relating to the land of Shenzhen Land No. (2007) 4150 Agreement is not finished due to the reason of or out of liabilities of Party B, Party A shall return the margin paid by Party B in advance without interest and publicly transfer the land through bid invitation, auction and public bidding. Party B shall not present any disagreement for that; any disagreement presented by Party B shall not obstruct Party A to publicly transfer the land through bid invitation, auction and public bidding.
6.	Party B is not allowed to start construction before Shenzhen Land No. (2007) 4150 Agreement comes into force.
7.	This Agreement has the same legal effect with Shenzhen Land No. (2007) 4150 Agreement. Should any confliction exist, this Agreement shall prevail.

8. This Agreement is executed in five counterparts, and takes effect from the date of its execution.

Party A: Shenzhen State Land Resource and	Party B: Zastron Electronic (Shenzhen) Co., Ltd.
Property Management Bureau
(seal)	(seal)
Legal representative:	Legal representative:
Authorized agent:	Authorized agent:

Signed on: Jun. 30, 2007
Signed in: Bao’anXingcheng
 

EX-4.25

1

Exhibit 4.25

Contract Summary of Design Consultancy Agreement

Part I — Key Particulars

Project:	Construction of a flexible print circuit factory facility at Land Lot No. A64-2, Meicun Gongye Jizhongqu, Wuxi Xinqu, the People’s Republic of China
Parties:	(1	)	Zastron Precision -Tech Limited (“the Company”), a company incorporated under the laws of the Caymen Island; and
	(2	)	Parsons Brinckerhoff (Asia) Ltd (“the Consultant”), a company incorporated under the laws of the Hong Kong SAR.
Date of Contract:			30 July 2007
Contract Sum:			HK$4,550,000

Part II — Material Terms

The followings are the material terms of the subject contract in relation to the rights and obligations of the parties:-

1.	The Company and the Consultant entered into the contract under which the Consultant is engaged to carry out the design for this Project and to provide the services contained in this contract (“the Services”). (Recital B)
2.	The Consultant is obliged to perform the Services to the satisfaction of the Company. (Clause 2.2)
3.	The Company may at any time require the Consultant to perform Additional Services in connection with the Project and the Consultant shall perform upon such requests. (Clause 2.4)
4.	The Consultant confirms to the Company that it possesses a high level of expertise and experience in relation to the Services and Additional Services. In addition, it acknowledges that the Company has entered into the contract in reliance of such representation made prior to the date of this contract; and that the Company relies on the Consultant’s expertise and experience in performing the Services and Additional Services. (Clause 3.1)
5.	If in the opinion of the Company the performance or conduct of any person for the time being appointed to carry out the Services has been unsatisfactory, it may require removal of such person from his current position and prompt replacement, after consulting the Company and obtained its written consent. (Clause 4.2)
6.	If in the opinion of the Company the staff or any element of the staff utilised by the Consultant in the performance of the Services are inadequate, it may after consulting the Consultant require the Consultant forthwith to employ and utilise such additional

2

	and/or more or differently qualified, expert or experienced staff as the Company reasonably considers to be necessary (Clause 4.3). If the Consultant fails to do so within a reasonable period of time, the Company may employ on such terms and conditions it thinks fit such number of staff with elements it considers necessary and require utilisation (Clause 4.4).
7.	If the Consultant, commissions all or part of its responsible tasks to a design institution (or similar) recognised by China not in accordance with Clause 6.4, the Company has the right to reduce the relevant design fees payable to the Consultant. (Clause 5.2)
8.	The Consultant’s entitlement to payment for performance of the Services and any other obligations in accordance with Schedule 4 shall be its total and only entitlement to payment. (Clauses 5.3)
9.	The Consultant shall timeously comply with or perform all instructions and directions given by the Company in relation to the Services. It shall coordinate with the Company or its affiliate Zastron Precision-Flex (Wuxi) Company Limited (“the Company (Wuxi)”) and all other appointed consultants for the Project to perform the Services. (Clause 6.1)
10.	Depending on the needs of the Project and the Work, the Consultant may allocate tasks performed by its cooperative design partners inside or outside the Chinese territory to its Chinese affiliate company Parsons Brinckerhoff Constructors (Shanghai) Company Limited, provided that the Consultant is responsible for its designs, and bears the ultimate design responsibility. Schedule 6 lists guidelines for such division of work. Both must comply with the relevant Chinese laws, standards and other requirements in the performance of the Services and/or the Additional Services. The Consultant acknowledges that thoroughly describing the division of work principles is not actually feasible, and that Schedule does not provide an inclusive description. Hence, should disputes arise in relation to the division of work, the Consultant shall enquire the Company and both should follow its directions in performing the duties listed in Schedule 2 and other related duties. (Clause 6.4)
11.	The Consultant shall maintain in full force and effect with a well-established, substantial and reputable insurance office in a form and upon terms and conditions approved by the Company professional indemnity insurance, providing a level of indemnity of not less than HK$7,000,000 for any occurrence or series of occurrences arising out of any one event in respect of the liability of the Consultant to the Company, the Company (Wuxi) or to any other person, or in respect of any negligent act or omission of the Consultant or otherwise. (Clause 7.1)
12.	The Consultant shall ensure that the insurance is maintained in full force and effect for the period of 12 years from that date of this contract. It shall also, whether or not it be on the same insurance policy, maintain in the same period sufficient insurance for the Company and the Company (Wuxi) to cover potential claims raised by third parties against the Consultant in performing the Project. If for any reason it fails to maintain the insurance, it shall immediately inform the Company in writing. The Company has the option to require the Consultant to enter into alternative arrangements, or to take out and maintain in force such insurance and deduct the requisite amount from any monies

3

	due or become due to the Consultant, or to recover the same as a debt due from the Consultant. (Clause 7.2)
13.	Except when necessary under this contract, no Confidential Information shall be disclosed by the Consultant without prior written consent of the Company (Clause 8.1) and the Company shall be entitled to an injunction for any breach of confidentiality (Clause 8.4).
14.	Restrictions in the confidentiality clause shall continue to apply after termination of this Contract. (Clause 8.5)
15.	The Company may at any time require the Consultant to permanently cease (Clause 9.1) or to suspend (Clause 9.2) the performance of all or any part of the Services and/or the Additional Services by giving 30 days in advance notice in writing with relevant specifications. Such a notice, if ceasing all performance, shall operate to terminate this Contract (Clause 9.1).
16.	The Company may at any time require the resumption of the performance of any or all Services and/or the Additional Services or the suspended performance by giving notice in writing with relevant specifications. The Consultant is entitled to be paid by the Company such sum as the Company considers to be equal to the additional cost reasonably and necessarily incurred by the Consultant for the purpose of resuming performance of the Services and/or the Additional Services. (Clause 9.3)
17.	If the Company does not within a period of 30 working days require the resumption of the performance of suspended Services and/or Additional Services, then upon expiry of such period the Company will be deemed to have required the Consultant to cease the performance of such Services and/or the Additional Services. (Clause 9.4).
18.	If the Company fails to pay any sum due to the Consultant within a period of 7 working days after it has become due (Clause 9.5), or if the Consultant fails to comply with any term of this Agreement (Clause 9.6), then the Consultant/ Company shall be entitled by registered post to give 14 working days’ notice in writing specifying the breach and requiring rectification within such period of notice and if upon the expiry of such notice, such default still persists, the Consultant/ Company may within 7 days thereafter be entitled to give notice in writing by registered post to forthwith terminate this Contract.
19.	If the decision of cessation or suspension was not made because of, any breach by the Consultant of any of its obligations under this Contract or because the Company had reasonable grounds to suspect the Consultant might be or become unable to perform the Services and/or the Additional Services or if the Consultant terminates this Contract pursuant to 9.5, then the Consultant shall be entitled to payment pursuant to 5.1 of such sum as the Company considers to be fair and reasonable having regard to the nature and extent of the Services and/or the Additional Services performed between the time at which the last payment was made to the Consultant pursuant to 5.1 and the time of the cessation or suspension. (Clause 10.1)
20.	If the Company requires cessation or suspension of performance of any or all Services and/or the Additional Services, or if this contract is terminated pursuant to 9.5 or 9.6,

4

	then the Consultant shall immediately take such action as may be necessary or desirable to bring to an end in an orderly manner the Services and/or the Additional Services, but in the case of suspension, in such a manner that the performance of the Services and/or the Additional Services may be resumed as soon as possible with the minimum possible additional cost if resumed later. Unless the decision was made because of, any breach by the Consultant or, the Company had reasonable grounds to suspect the Consultant may be or become unable to perform, then the Consultant shall be entitled to be paid by the Company such sum as the Company considers to be the additional cost reasonably and necessarily incurred by the Consultant for the purpose of taking the above actions. (Clause 10.4)
21.	If the Company requires cessation or suspension of performance of any or all Services and/or the Additional Services, or if this contract is terminated pursuant to 9.5 or 9.6, the Consultant shall deliver and make available to the Company all documents, information, property and materials of the Company and all documents, information, property and materials which are in the ownership, possession, custody or control of the Consultant or any sub-contractor of the Consultant (or representatives) and shall give all such assistance and advice as the Company may request to effect a smooth handover to the Company or any other person authorised by it. The Consultant expressly waives any lien or other right it might have to retain possession or ownership of such pending payment of any amounts due to it. (Clause 10.5)
22.	The Company, its subsidiaries or affiliates is entitled to use all or any design documents for the purposes of this project or any of its other projects. (Clause 10.7)
23.	The Consultant shall indemnify and keep indemnified the Company and/or the Company (Wuxi) from and against any loss, cost, liability, damage, claim or proceeding of whatsoever nature which the Company and/or the Company (Wuxi) incurs or suffers as a direct consequence of or in connection with or arising out of any act, negligent act, or omission on the part of the Consultant, its sub-contractors, delegates, servants or agents resulting in: (a) any breach by the Consultant, its servants, agents, delegates or sub-contractors; (b) any breach of any warranty given by the Consultant under this Contract; (c) any person employed by the Company pursuant to 4.4. (Clause 12)
24.	In case of any dispute or difference shall arise between the Company and the Consultant in connection with or arising out of the contract or the performance of the Services, the parties shall endeavour to resolve the dispute or difference by amicable negotiations failing which such dispute or difference shall be referred to and determined by arbitration at the Hong Kong International Arbitration Centre. Arbitration must take place in Hong Kong. (Clause 20)
25.	The subject contract shall be governed by and construed in accordance with the laws of the Hong Kong SAR. (Clause 21)

5

Part III — Omitted Terms

The following is a description of the terms of the subject contract that have been omitted from this summary:-

1.	The definition provision provides a list of definitions for certain terms in the subject contract. (Clause 1)
2.	The scope of power provision gives the Company the option to specify the scope of power of the Consultant. (Clause 11)
3.	The subcontracting provision prohibits the Consultant from transferring its rights and obligations and from subcontracting its responsible tasks without the consent of the Company or except as provided in Schedule 6. (Clause 13)
4.	The language provision acknowledges that the subject contract is executed in Chinese. (Clause 14)
5.	The vitiation provision provides for the severance of any vitiating clause from the body of the contract. (Clause 15)
6.	The waiver provision provides that any omission, default or delay in the exercise of the right, power or remedial action by the Company shall not constitute a waiver of such right, power or remedial action. (Clause 16)
7.	The revision provision provides for the revision or supplementation of the subject contract by written agreement by the Company and the Consultant or by the exercise of the Company’s rights as specified in the subject contract. (Clause 17)
8.	The notice provision specifies the method by which communications arising from or related to the subject contract are to be exchanged. (Clause 18)
9.	The entire agreement provision maintains that the subject contract sets out in full the entire agreement between the Company and the Consultant. (Clause 19)

*****************************

The forgoing is a fair and accurate English translation of the summarized Design Consultancy Agreement.

                                                                                                    
[Insert typed name of officer]
[Insert position of officer]

EX-4.26

1

Exhibit 4.26

Contract Summary of Project Management Agreement

Part I — Key Particulars

Project:	Construction of a flexible print circuit factory facility at Land Lot No. A64-2, Meicun Gongye Jizhongqu, Wuxi Xinqu, the People’s Republic of China
Parties:	(1	)	Zastron Precision-Flex (Wuxi) Company Limited (“the Company”), a company incorporated under the laws of the PRC; and
	(2	)	Parsons Brinckerhoff Constructors (Shanghai) Company Limited (“the Consultant”), a company incorporated under the laws of the PRC.
Date of Contract:			30 July 2007
Contract Sum:			RMB8,300,000

Part II — Material Terms

The followings are the material terms of the subject contract in relation to the rights and obligations of the parties:-

1.	The Company and the Consultant entered into the contract under which the Consultant is engaged to carry out all project management services (“the Services”) for the Company for the Project and all construction contracts with various contractors to complete the Project. (Recital B)
2.	The Consultant is obliged to perform the Services to the satisfaction of the Company. (Clause 2.2)
3.	The Company may at any time require the Consultant to perform Additional Services in connection with the Project and the Consultant shall perform upon such requests. (Clause 2.4)
4.	The Consultant confirms to the Company that it possesses a high level of expertise and experience in relation to the Services and Additional Services. In addition, it acknowledges that the Company has entered into the contract in reliance of such representation made prior to the date of this contract; and that the Company relies on the Consultant’s expertise and experience in performing the Services and Additional Services. (Clause 3.1)
5.	If in the opinion of the Company the performance or conduct of any person for the time being appointed to carry out the Services has been unsatisfactory, it may require removal of such person from his current position and prompt replacement, after consulting the Company and obtained its written consent. (Clause 4.2)
6.	If in the opinion of the Company the staff or any element of the staff utilised by the Consultant in the performance of the Services are inadequate, it may after consulting the Consultant require the Consultant forthwith to employ and utilise such additional

2

	and/or more or differently qualified, expert or experienced staff as the Company reasonably considers to be necessary (Clause 4.3). If the Consultant fails to do so within a reasonable period of time, the Company may employ on such terms and conditions it thinks fit such number of staff with elements it considers necessary and require utilisation (Clause 4.4).
7.	The Consultant’s entitlement to payment for performance of the Services and any other obligations in accordance with Schedule 3 shall be its total and only entitlement to payment. (Clause 5.2)
8.	The Consultant shall timeously comply with or perform all instructions and directions given by the Company in relation to the Services. It shall coordinate with the Company or its affiliate Zastron Precision-Tech Limited and all other appointed consultants for the Project to perform the Services. (Clause 6.1)
9.	The Consultant shall maintain in full force and effect with a well-established, substantial and reputable insurance office in a form and upon terms and conditions approved by the Company professional indemnity insurance, providing a level of indemnity of not less than RMB13,000,000 for any occurrence or series of occurrences arising out of any one event in respect of the liability of the Consultant to the Company or to any other person, or in respect of any negligent act or omission of the Consultant or otherwise. (Clause 7.1)
10.	The Consultant shall ensure that the insurance is maintained in full force and effect for the period of 12 years from the date of this contract. It shall also, whether or not it be on the same insurance policy, maintain in the same period sufficient insurance to cover potential claims raised by third parties against the Consultant in performing the Project. If for any reason it fails to maintain the insurance, it shall immediately inform the Company in writing. The Company has the option to require the Consultant to enter into alternative arrangements, or to take out and maintain in force such insurance and deduct the requisite amount from any monies due or become due to the Consultant, or to recover the same as a debt due from the Consultant. (Clause 7.2)
11.	Except when necessary under this contract, no Confidential Information shall be disclosed by the Consultant without prior written consent of the Company (Clause 8.1) and the Company shall be entitled to an injunction for any breach of confidentiality (Clause 8.4).
12.	Restrictions in the confidentiality clause shall continue to apply after termination of this contract. (Clause 8.5)
13.	The Company may at any time require the Consultant to permanently cease (Clause 9.1) or to suspend (Clause 9.2) the performance of all or any part of the Services and/or the Additional Services by giving 30 days in advance notice in writing with relevant specifications. Such a notice, if ceasing all performance, shall operate to terminate this contract (Clause 9.1).
14.	The Company may at any time require the resumption of the performance of any or all Services and/or the Additional Services or the suspended performance by giving notice

3

	in writing with relevant specifications. The Consultant is entitled to be paid by the Company such sum as the Company considers to be equal to the additional cost reasonably and necessarily incurred by the Consultant for the purpose of resuming performance of the Services and/or the Additional Services. (Clause 9.3)
15.	If the Company does not within a period of 30 working days require the resumption of the performance of suspended Services and/or Additional Services, then upon expiry of such period the Company will be deemed to have required the Consultant to cease the performance of such Services and/or the Additional Services. (Clause 9.4).
16.	If the Company fails to pay any sum due to the Consultant within a period of 7 working days after it has become due (Clause 9.5), or if the Consultant fails to comply with any term of this Agreement (Clause 9.6), then the Consultant/ Company shall be entitled by registered post to give 14 working days’ notice in writing specifying the breach and requiring rectification within such period of notice and if upon the expiry of such notice, such default still persists, the Consultant/ Company may within 7 days thereafter be entitled to give notice in writing by registered post to forthwith terminate this contract.
17.	If the decision of cessation or suspension was not made because of, any breach by the Consultant of any of its obligations under this contract or because the Company had reasonable grounds to suspect the Consultant might be or become unable to perform the Services and/or the Additional Services or if the Consultant terminates this contract pursuant to 9.5, then the Consultant shall be entitled to payment pursuant to 5.1 of such sum as the Company considers to be fair and reasonable having regard to the nature and extent of the Services and/or the Additional Services performed between the time at which the last payment was made to the Consultant pursuant to 5.1 and the time of the cessation or suspension. (Clause 10.1)
18.	If the Company requires cessation or suspension of performance of any or all Services and/or the Additional Services, or if this contract is terminated pursuant to 9.5 or 9.6, then the Consultant shall immediately take such action as may be necessary or desirable to bring to an end in an orderly manner the Services and/or the Additional Services, but in the case of suspension, in such a manner that the performance of the Services and/or the Additional Services may be resumed as soon as possible with the minimum possible additional cost if resumed later. Unless the decision was made because of, any breach by the Consultant or, the Company had reasonable grounds to suspect the Consultant may be or become unable to perform, then the Consultant shall be entitled to be paid by the Company such sum as the Company considers to be the additional cost reasonably and necessarily incurred by the Consultant for the purpose of taking the above actions. (Clause 10.4)
19.	If the Company requires cessation or suspension of performance of any or all Services and/or the Additional Services, or if this contract is terminated pursuant to 9.5 or 9.6, the Consultant shall deliver and make available to the Company all documents, information, property and materials of the Company and all documents, information, property and materials which are in the ownership, possession, custody or control of the Consultant or any sub-contractor of the Consultant (or representatives) and shall give all such assistance and advice as the Company may request to effect a smooth handover to the Company or any other person authorised by it. The Consultant expressly waives

4

	any lien or other right it might have to retain possession or ownership of such pending payment of any amounts due to it. (Clause 10.5)
20.	The Company, its subsidiaries or affiliates is entitled to use all or any design documents for the purposes of this project or any of its other projects. (Clause 10.7)
21.	The Consultant shall indemnify and keep indemnified the Company from and against any loss, cost, liability, damage, claim or proceeding of whatsoever nature which the Company incurs or suffers as a direct consequence of or in connection with or arising out of any act, negligent act, or omission on the part of the Consultant, its sub-contractors, delegates, servants or agents resulting in: (a) any breach by the Consultant, its servants, agents, delegates or sub-contractors; (b) any breach of any warranty given by the Consultant under this contract; (c) any person employed by the Company pursuant to 4.4. (Clause 12)
22.	In case of any dispute or difference shall arise between the Company and the Consultant in connection with or arising out of the contract or the performance of the Services, the parties shall endeavour to resolve the dispute or difference by amicable negotiations failing which such dispute or difference shall be referred to and determined by arbitration at the China International Economic and Trade Arbitration Commission, Shanghai Commission. (Clause 20.1)
23.	Parsons Brinckerhoff (Asia) Limited shall provide to the Company guarantee in respect of the Consultant’s due performance of its obligations under this contract. (Clause 20.2)
24.	The subject contract shall be governed by and construed in accordance with the laws of the People’s Republic of China (excluding the law of Hong Kong, Macau and Taiwan). (Clause 21)

Part III — Omitted Terms

The following is a description of the terms of the subject contract that have been omitted from this summary:-

1.	The definition provision provides a list of definitions for certain terms in the subject contract. (Clause 1)
2.	The scope of power provision gives the Company the option to specify the scope of power of the Consultant. (Clause 11)
3.	The subcontracting provision prohibits the Consultant from transferring its rights and obligations and from subcontracting its responsible tasks without the consent of the Company or except as provided in Schedule 6. (Clause 13)
4.	The language provision acknowledges that the subject contract is executed in Chinese. (Clause 14)
5.	The vitiation provision provides for the severance of any vitiating clause from the body of the contract. (Clause 15)

5

6.	The waiver provision provides that any omission, default or delay in the exercise of the right, power or remedial action by the Company shall not constitute a waiver of such right, power or remedial action. (Clause 16)
7.	The revision provision provides for the revision or supplementation of the subject contract by written agreement by the Company and the Consultant or by the exercise of the Company’s rights as specified in the subject contract. (Clause 17)
8.	The notice provision specifies the method by which communications arising from or related to the subject contract are to be exchanged. (Clause 18)
9.	The entire agreement provision maintains that the subject contract sets out in full the entire agreement between the Company and the Consultant. (Clause 19)

*****************************

The forgoing is a fair and accurate English translation of the summarized Project Management Agreement.

                                                                                
[Insert typed name of officer]
[Insert position of officer]

EX-4.27

Exhibit 4.27

Supplementary Agreement of Loan

Borrower (Party A): Zastron Electronic (Shenzhen) Co., Ltd
Address: Gusu Industrial Estate, Xixiang, Bao’an, Shenzhen
Post code: 518126

Lender (Party B): Zastron Precision-Tech Limited
Address: Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111,
Cayman Islands

Whereas:

(1)	In accordance with a loan agreement (“that Agreement”) signed by Party A with Party B on Mar. 30, 2004, Party A borrowed from Party B with US Dollars Eighteen Million Six Hundred and Sixty Thousand only (USD 18,660,000). The term of loan agreed by that Agreement is one year, from Mar. 31, 2004 to Mar. 30, 2005.
(2)	In April 2005, Party A and Party B reached unanimity through consultation and negotiation and agreed to enter into this Agreement to extend the term of the said Agreement, from Mar. 31, 2005 to Mar. 30, 2006.
(3)	Having reached unanimity through consultation and negotiation, Party A and Party B agree to enter into this Agreement to extend another one year of the term of the said Agreement and to be abided by both parties.

     Article 1 Term of Loan

     Party A and Party B now agree to extend another one year of the term of the

1

loan agreed by Article 3 of that Agreement, i.e. from Mar. 31, 2006 to Mar. 30, 2007.

Article 2 Effectiveness of that Agreement

Except the above amendment, all other provisions of that Agreement shall remain in force.

Article 3 Effectiveness of this Agreement

This Agreement shall take effect from the date of being signed and sealed by the legal representative (person in charge) or authorized agent of Party A and person in charge or authorized agent of Party B.

Article 4

     This Agreement is executed in triplicates. It shall be terminated automatically after the principal is repaid by Party A.

     Article 5

     This Agreement is complying with the Rules for Administration of Foreign Exchange of the PRC

     Party A (seal): Zastron Electronic (Shenzhen) Co., Ltd

Legal representative or authorized agent (signature):     Original signed of Ms.
	Lei Lai Fon, Patinda
	(with Company chop)
	Sept 5, 2007
Party B (seal): Zastron Precision-Tech Limited
Representative (chairman) or authorized agent (signature):  Original signed of
	Mr. Wang Lu Ping
	(with Company chop)
	Sept 5, 2007

2

EX-4.28

Exhibit 4.28

Supplementary Agreement of Loan

Borrower (Party A): Zastron Electronic (Shenzhen) Co., Ltd
Address: Gusu Industrial Estate, Xixiang, Bao’an, Shenzhen
Post code: 518126

Lender (Party B): Zastron Precision-Tech Limited
Address: Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111,
Cayman Islands

Whereas:

(1)	In accordance with a loan agreement (“that Agreement”) signed by Party A with Party B on Mar. 30, 2004, Party A borrowed from Party B with US Dollars Eighteen Million Six Hundred and Sixty Thousand only (USD 18,660,000). The term of loan agreed by that Agreement is one year, from Mar. 31, 2004 to Mar. 30, 2005.
(2)	In April 2005, Party A and Party B reached unanimity through consultation and negotiation and agreed to enter into this Agreement to extend the term of the said Agreement, from Mar. 31, 2005 to Mar. 30, 2006.
(3)	In September 2007, Party A and Party B reached unanimity through consultation and negotiation and agreed to enter into this Agreement to extend the term of the said Agreement, from Mar. 31, 2006 to Mar. 30, 2007.
(4)	Having reached unanimity through consultation and negotiation, Party A and Party B agree to enter into this Agreement to extend another one year of the term of the said

1

Agreement and to be abided by both parties.

Article 1 Term of Loan

Party A and Party B now agree to extend another one year of the term of the loan agreed by Article 3 of that Agreement, i.e. from Mar. 31, 2007 to Mar. 30, 2008.

Article 2 Effectiveness of that Agreement

Except the above amendment, all other provisions of that Agreement shall remain in force.

Article 3 Effectiveness of this Agreement

This Agreement shall take effect from the date of being signed and sealed by the legal representative (person in charge) or authorized agent of Party A and person in charge or authorized agent of Party B.

Article 4

     This Agreement is executed in triplicates. It shall be terminated automatically after the principal is repaid by Party A.

     Article 5

     This Agreement is complying with the Rules for Administration of Foreign Exchange of the PRC

Party A (seal): Zastron Electronic (Shenzhen) Co., Ltd
Legal representative or authorized agent (signature): Original signed of Ms.
	Lei Lai Fon, Patinda
	(with Company chop)
	Sept 5, 2007
Party B (seal): Zastron Precision-Tech Limited

2

Representative (chairman) or authorized agent (signature):	Original signed of
	Mr. Wang Lu Ping
	(with Company chop)
	Sept 5, 2007

3

EX-4.29

Exhibit 4.29

Supplementary Agreement of Loan

Borrower (Party A): Zastron Electronic (Shenzhen) Co., Ltd
Address: Gusu Industrial Estate, Xixiang, Bao’an, Shenzhen
Post code: 518126

Lender (Party B): Zastron Precision-Tech Limited
Address: Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111,
Cayman Islands

Whereas:

(1)	In accordance with a loan agreement (“that Agreement”) signed by Party A with Party B on Jul. 13, 2004, Party A borrowed from Party B with US Dollars Five Million Eight Hundred and Forty Thousand only (USD 5,840,000). The term of loan agreed by that Agreement is one year, from Jul. 14, 2004 to Jul. 13, 2005.
(2)	In June 2005, Party A and Party B reached unanimity through consultation and negotiation and agreed to enter into this Agreement to extend the term of the said Agreement, from Jul. 14, 2005 to Jul. 13, 2006.
(3)	Having reached unanimity through consultation and negotiation, Party A and Party B agree to enter into this Agreement to extend another one year of the term of the said Agreement and to be abided by both parties.

     Article 1 Term of Loan

     Party A and Party B now agree to extend another one year of the term of the

1

loan agreed by Article 3 of that Agreement, i.e. from Jul. 14, 2006 to Jul. 13, 2007.

Article 2 Effectiveness of that Agreement

Except the above amendment, all other provisions of that Agreement shall remain in force.

Article 3 Effectiveness of this Agreement

     This Agreement shall take effect from the date of being signed and sealed by the legal representative (person in charge) or authorized agent of Party A and person in charge or authorized agent of Party B.

Article 4

     This Agreement is executed in triplicates. It shall be terminated automatically after the principal is repaid by Party A.

     Article 5

     This Agreement is complying with the Rules for Administration of Foreign Exchange of the PRC

Party A (seal): Zastron Electronic (Shenzhen) Co., Ltd
Legal representative or authorized agent (signature): Original signed of Ms.
	Lei Lai Fon, Patinda
	(with Company chop)
	Sept 5, 2007
Party B (seal): Zastron Precision-Tech Limited
Representative (chairman) or authorized agent (signature): Original signed of
	Mr. Wang Lu Ping
	(with Company chop)
	Sept 5, 2007

2

EX-4.30

Exhibit 4.30

Supplementary Agreement of Loan

Borrower (Party A): Zastron Electronic (Shenzhen) Co., Ltd
Address: Gusu Industrial Estate, Xixiang, Bao’an, Shenzhen
Post code: 518126

Lender (Party B): Zastron Precision-Tech Limited
Address: Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111,
Cayman Islands

Whereas:

(1)	In accordance with a loan agreement (“that Agreement”) signed by Party A with Party B on Jul. 13, 2004, Party A borrowed from Party B with US Dollars Five Million Eight Hundred and Forty Thousand only (USD 5,840,000). The term of the loan agreed by that Agreement is one year, from Jul. 14, 2004 to Jul. 13, 2005.
(2)	In June 2005, Party A and Party reached unanimity through consultation and negotiation and agreed to enter into this Agreement to extend one year of the term of the said agreement, from Jul. 14, 2005 to Jul. 13, 2006.
(3)	In September 2007, Party A and Party reached unanimity through consultation and negotiation and entered into this Agreement to extend one year of the term of the said agreement, from Jul. 14, 2006 to Jul. 13, 2007.
(4)	Now Party A and Party B reaches unanimity through consultation and negotiation and enters into this Agreement to extend another one year of

1

the term of the said agreement and to be abided by both parties.

Article 1 Term of Loan

Party A and Party B now agree to extend another one year of the term of the loan agreed by Article 3 of that Agreement, i.e. from Jul. 14, 2007 to Jul. 13, 2008.

Article 2 Effectiveness of that Agreement

Except the above amendment, all other provisions of that Agreement shall remain in force.

Article 3 Effectiveness of this Agreement

This Agreement shall take effect from the date of being signed and sealed by the legal representative (person in charge) or authorized agent of Party A and person in charge or authorized agent of Party B.

Article 4

This Agreement is executed in triplicates. It shall be terminated automatically after the principal is repaid by Party A.

Article 5

This Agreement is complying with the Rules for Administration of Foreign Exchange of the PRC.

Party A (seal): Zastron Electronic (Shenzhen) Co., Ltd
Legal representative or authorized agent (signature): Original signed of Ms.
	Lei Lai Fon, Patinda
	(with Company chop)
	Sept 5, 2007

2

Party B (seal): Zastron Precision-Tech Limited
Representative (chairman) or authorized agent (signature): Original signed of
	Mr. Wang Lu Ping
	(with Company chop)
	Sept 5, 2007

3

EX-4.31

Exhibit 4.31

DATED 24^th September 2007

J.I.C. TECHNOLOGY COMPANY LIMITED

and

NAM TAI ELECTRONICS, INC.

AGREEMENT

relating to the sale and purchase of
91% interest in
Jetup Electronic (Shenzhen) Co., Ltd.

I N D E X

Clause	Page
1. Interpretation		1
2. Sale and Purchase		4
3. Conditions		5
4. Completion		6
5. Warranties		6
6. Conduct of Business Pending Completion		8
7. Costs		9
8. Further Assurance		9
9. Miscellaneous		9
10. Notices		10
11. Time of the Essence		10
12. Governing Law		10
13. Process Agents		10
Schedules
Schedule 1 Details of the Company		12
Schedule 2 Tenancies		13
Schedule 3 Warranties		14
Schedule 4 Restricted Actions Pending Completion		24
Execution Clause		26

THIS AGREEMENT is dated 24^th September 2007 and is made

BETWEEN :-

(1)	J.I.C. TECHNOLOGY COMPANY LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Vendor”); and
(2)	NAM TAI ELECTRONICS, INC. a company incorporated in the British Virgin Islands whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Purchaser”).

NOW IT IS HEREBY AGREED as follows:-

1.	INTERPRETATION
1.01	In this Agreement unless the context otherwise requires:-

(a) the following expressions shall have the following meanings:

Expression	Meaning
“Accounts”	the audited financial statements of the Company in respect of each of the three financial years ended on 31 December 2006 and of the six months ended on 30 June 2007
“Accounts Date”	30 June 2007
“Business Day”	means a day other than a Saturday or Sunday, on which banks are open in Hong Kong to the general public for business
“Company”	Jetup Electronic (Shenzhen) Co., Ltd. a company incorporated in the PRC and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Schedule 1
“Companies Ordinance”	the Companies Ordinance (Chapter 32, as amended from time to time, of the Laws of Hong Kong)
“Completion”	completion of the sale and purchase of the Sale Interest in accordance with the terms and conditions of this Agreement

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Expression	Meaning
“Completion Date”	the date on which Completion occurs
“Conditions”	the conditions set out in Clause 3.01
“Consideration Shares”	the 193,004,619 shares of HK$0.01 each of NTEEP beneficially owned and registered in the by the Purchaser to be transferred to the Vendor subject to and upon the terms and conditions of this Agreement
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China
“Intellectual Property”	(a)    patents, trade marks, service marks, registered designs, applications for any of those rights, trade and business names (including internet domain names and e-mail address names), unregistered trade marks and service marks, copyrights, database rights, know-how, rights in designs and inventions;
	(b)      rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); and
	(c)      rights of the same or similar effect or nature as or to those in paragraphs (a) and (b), in each case in any part of the world
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“NTEEP”	Nam Tai Electronic and Electrical Products Limited, a company incorporated in the Cayman Islands and the shares of which are listed on the Main Board of the Stock Exchange
“PRC”	the People’s Republic of China and, for the purposes of this Agreement, excluding Hong Kong, Macau and Taiwan
“Sale Interest”	91% interest in the Company legally and beneficially owned by the Vendor
“Stamp Duty Ordinance”	the Stamp Duty Ordinance (Chapter 117, as

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Expression	Meaning
	amended from time to time, of the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Taxation”	(i) any liability to any form of taxation whenever created or imposed and whether of the PRC or of any other part of the world and without prejudice to the generality of the foregoing includes profits tax, provisional profits tax, interest tax, salaries tax, property tax, estate duty, death duty, capital duty, stamp duty, payroll tax, withholding tax, rates, customs and excise duties and generally any tax, duty, impost, levy or rate or any amount payable to the revenue, customs or fiscal authorities whether of the PRC or of any other part of the world;
	(ii) such an amount or amounts as is referred to in sub-clause (i) above; and
	(iii) all costs, interest, penalties, charges, fines and expenses incidental or relating to the liability to taxation or the loss, reduction, modification, cancellation or deprivation of relief or of a right to repayment of the taxation
“Tenancies”	the tenancies and sub-tenancies where the Company is the lessor or the lessee, particulars of which are set out in Schedule 2
“Warranties”	the representations, warranties and undertakings set out in Schedule 3
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“US$”	the United States dollars, the lawful currency of the United States of America

(b)	words and expressions defined in the Companies Ordinance shall bear the same respective meanings herein;
(c)	reference to any statute or statutory provision shall include any statute or statutory provision which amends or replaces, or has amended or replaced, it shall include any subordinate legislation made under the relevant statute;

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(d)	a body corporate shall be deemed to be associated with another body corporate if it is a holding company or a subsidiary of that other body corporate or a subsidiary of a holding company of that body corporate;
(e)	references to Clauses and sub-clauses and Schedules are to Clauses and sub-clauses of and Schedules to this Agreement;
(f)	references to writing shall include typewriting, printing, lithography, photography, telecopier, telex and electronic messages and any mode of reproducing words in a legible and non-transitory form;
(g)	words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporate.

1.02	Headings are for convenience only and shall not affect the construction of this Agreement.
1.03	In construing this Agreement:-

(a)	the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
(b)	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

1.04	The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Schedules.
2.	SALE AND PURCHASE
2.01	On the terms set out in this Agreement, the Vendor as beneficial owner shall sell the Sale Interest to the Purchaser free from all liens, charges, encumbrances, equities and adverse interests and with all rights attached or accruing thereto at the date hereof (including the right to receive all dividends and other distributions declared, made or paid on or after the date hereof) and the Purchaser relying on the representations, warranties, undertakings and indemnities of the Vendor contained or referred to herein shall purchase the Sale Interest at Completion.
2.02	The consideration for the sale of the Sale Interest is the sum of HK$347,408,313.53 which shall be satisfied by the transfer of the Consideration Shares by the Purchaser to the Vendor free from all liens,

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	charges, security interests, encumbrances, equities and adverse claims and with all rights attached or accruing thereto at Completion.
3.	CONDITIONS
3.01	Completion is conditional upon the following conditions being satisfied on or before 31 December 2007 (the “Longstop Date”):

(a)	the obtaining in terms acceptable to the Purchaser, of all consents, approvals, clearances and authorisations of any relevant governmental authorities or other relevant third parties in the PRC as may be necessary for the execution and implementation of this Agreement;
(b)	the Company receiving all relevant consents and approvals from third parties as may be necessary in connection with the proposed change in shareholding of the Company so as to ensure that the Company maintains all its existing contractual and other rights following the transfer of the Sale Interest (including, without limitation, the consent of the existing bankers of the Company to continue to provide the existing banking facilities to the Company following the transfer of the Sale Interest); and
(c)	the passing at an extraordinary general meeting of the Vendor of ordinary resolution(s) approving this Agreement and the transactions contemplated by this Agreement by the shareholders of the Vendor (excluding such shareholders who shall be required to abstain from voting under the Listing Rules).

3.02	The Vendor will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Purchaser when each of the said Conditions have been satisfied.
3.03(a)	If at any time the Vendor becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it will immediately inform the Purchaser.

(b) If at any time the Purchaser becomes aware of a fact or circumstance that might prevent a condition being satisfied, it will immediately inform the Vendor.

3.04 If any of the Conditions have not been satisfied on or before the Longstop Date then this Agreement will immediately terminate and all rights and obligations of the parties shall cease immediately upon termination.

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4	COMPLETION
4.01	Completion of the sale and purchase of the Sale Interest shall take place on the fifth Business Day following satisfaction or waiver of the Conditions, or such other date as the Vendor and the Purchaser may agree in writing at Unit C, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao when all (but not part only) of the following business shall be transacted:-

(a)	the Vendor shall give a copy of such documents and take such actions as have been required (including but not limited to the obtaining of all approvals of the relevant governmental authorities in the PRC) to give a good title to the Sale Interest and to enable the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) to be registered as the holder thereof ;
(b)	the Vendor shall deliver to or to the order of the Purchaser evidence satisfactory to the Purchaser that a good title to the Sale Interest has been passed to the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) and the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) has been registered as the holder thereof;
(c)	the Purchaser shall transfer the Consideration Shares to the Vendor or the nominees of the Vendor as it may direct and cause to be delivered to the Vendor share certificate(s) in respect thereof.

4.02	No party shall be obliged to complete this Agreement or perform any obligations under Clause 4.01 unless the other party demonstrates that it is able to comply fully with the requirements of Clause 4.01 simultaneously.
5	WARRANTIES
5.01	The Vendor hereby:-

(a)

represents, warrants and undertakes to the Purchaser that each of the Warranties set out in Schedule 3 is true and accurate in all respects and is not misleading and accept that the Purchaser is entering into this Agreement in reliance upon each of the Warranties notwithstanding any investigations which the Purchaser or any of its directors, officers, employees, agents or advisors may have made and notwithstanding any information regarding the Company which may otherwise have come into the possession of any of the foregoing;

(b)

undertakes to indemnify the Purchaser against all claims, liabilities, losses, costs and expenses the Purchaser may suffer or incur or which may be made against the Purchaser either before or after the commencement of and arising out of, or in respect of, any action in connection with :-

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(i)	the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;
(ii)	any legal proceedings in which the Purchaser claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for the Purchaser; or
(iii)	the enforcement of any such settlement or judgment.

5.02	Without prejudice to any other rights and remedies available at any time to the Purchaser (including but not limited to any right to damages for any loss suffered by the Purchaser) the Purchaser may (if the effect of any breach of any Warranty is that the Company, or any of its assets, is worth less than its value would have been if there had been no such breach or that the Company is or will be under a liability or an increased or substituted liability which would not have subsisted if there had been no such breach) by notice to the Vendor require it to make good to the Company the diminution in the value of the asset or all loss occasioned by such liability or increased or substituted liability by a payment in cash to the relevant company or to pay to the Purchaser an amount equal to the diminution thereby caused in the value of the Sale Interest. If any such payment gives rise to a liability to Taxation on the part of the relevant company or the Purchaser as the recipient thereof, such payment shall be increased by such an amount as shall ensure that, after payment of such Taxation, the recipient shall have received an amount equal to the payment otherwise required hereby to be paid.
5.03	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Agreement.
5.04	Any rights to which the Purchaser may be or become entitled by reason of any of the Warranties being untrue or misleading or breached and all remedies which may be available to the Purchaser in consequence of any of the Warranties being untrue or misleading or breached shall enure for the benefit of any associated company of the Purchaser which is the beneficial owner for the time being of any of the Sale Interest purchased by the Purchaser hereunder and accordingly any loss which is sustained by such beneficial owner for the time being of the Sale Interest in consequence of any of the Warranties being untrue or misleading or breached shall be deemed to be that of the Purchaser and the Purchaser may bring proceedings and exercise any other remedy on the footing that it has been the beneficial owner of the Sale Interest at all times from Completion.
5.05	The Vendor shall not be liable in respect of any breach of the Warranties after the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder (as defined under the Listing Rules) of the

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	Vendor, except in respect of those matters which have been the subject of a claim made hereunder or in respect of those circumstances which may give rise to a claim made hereunder and of which notice has been given to the Vendor on or prior to the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder of the Vendor.
5.06	The total liability of the Vendor under this Agreement shall not exceed HK$347,408,313.53.
5.07	The Vendor shall have no liability under this Agreement unless the aggregate amount of all valid claims which could otherwise be made under this Agreement shall exceed HK$500,000.
5.08	The Vendor shall not be liable for breach of any Warranty to the extent that such liability arises by reason of any act or omission effected by the Purchaser or the Company after Completion (other than action taken by the Purchaser or on its behalf in establishing that any of the Warranties being untrue or misleading or breached) or by reason of any retrospective change in the law coming into force after the date hereof or to the extent such liability arises or is increased by an increase in rates of taxation after the date hereof with retrospective effect.
5.09	The Vendor hereby undertakes that it will from time to time and at any time prior to the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder of the Vendor, forthwith disclose in writing to the Purchaser any event, fact or circumstance which may become known to them after the date hereof and which is materially inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of any of the Sale Interest or which may entitle the Purchaser to make any claim under this Agreement.
5.10	The Vendor shall not, and shall procure that the Company shall not, do or allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given.
5.11	It is hereby agreed between the parties hereto that no party will have the right to rescind this Agreement.
5.12	The Vendor shall not (in the event of any claim being made against the Vendor in connection with the sale of the Sale Interest to the Purchaser) make any claim against the Company or against any director or employee of the Company on whom the Vendor may have relied before agreeing to any term of this Agreement.
6.	CONDUCT OF BUSINESS PENDING COMPLETION

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6.01 The Vendor will procure that the Company shall not (save with the consent of the Purchaser), prior to Completion (or the termination of this Agreement (whichever is earlier)):

(a)	do anything outside its ordinary course of business;
(b)	do anything which is not in accordance with its past practices; or
(c)	without prejudice of generality of Clauses 6.01(a) and 6.01(b), undertake any of the activities listed in Schedule 4.

7.	COSTS
7.01	Each party shall pay its own costs, stamp duty and capital duty in relation to the negotiations leading up to the sale and purchase of the Sale Interest and the preparation, execution and carrying into effect of this Agreement and the transactions contemplated or referred to herein.
8.	FURTHER ASSURANCE
8.01	Each of the parties hereto undertakes to the other party that it will do all such acts and things and execute all such deeds and documents as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Agreement and the transactions hereby contemplated.
9.	MISCELLANEOUS
9.01	Without prejudice to the provisions of this Agreement stipulating that certain acts, obligations and/or events are to be performed or shall take place on a particular date or dates, any provision of this Agreement which is capable of being performed after but which has not been performed at or before Completion and all warranties and indemnities and other undertakings contained in or entered into pursuant to this Agreement shall remain in full force and effect notwithstanding Completion.
9.02	This Agreement shall be binding on and enure for the benefit of the successors of each of the parties but shall not be assignable.
9.03	Any remedy conferred on any party hereto for breach of this Agreement (including the breach of any Warranty) shall be in addition and without prejudice to all other rights and remedies available to it and the exercise of or failure to exercise any remedy shall not constitute a waiver by such party of any of its rights or remedies.
9.04	This Agreement constitutes the whole agreement between the parties relating to the transactions hereby contemplated (no party having relied on any representation or warranty made by any other party which is not a term

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	of this Agreement) and no future variation shall be effective unless made in writing and signed by each of the parties hereto.
9.05	This Agreement shall supersede all and any previous agreements or arrangements between the parties hereto or any of them relating to the Company or to any other matter referred to in this Agreement and all or any such previous agreements or arrangements (if any) shall cease and determine with effect from the date hereof.
9.06	If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the remaining provisions hereof shall in no way be affected or impaired thereby.
10.	NOTICES
10.01	Any notice required or permitted to be given by or under this Agreement may be given by delivering the same to the party in question by delivering it to such party in person or in the case of a body corporate by delivering it to its registered office for the time being or by sending it in a prepaid envelope by registered mail to the party concerned at its address shown in this Agreement or to such other address in Hong Kong as the party concerned may have notified to the others in accordance with this Clause and any such notice shall be deemed to be served when the same would first be received at the address of the party to whom it is addressed in the normal course of such method of delivery.
11.	TIME OF THE ESSENCE
11.01	Time shall be of the essence of this Agreement.
12.	GOVERNING LAW
12.01	This Agreement shall be governed by and construed in accordance with the laws of Hong Kong and each party hereby submits to the non-exclusive jurisdiction of the courts of Hong Kong as regards any claim or matter arising under this Agreement.
13.	PROCESS AGENTS
13.01	The Vendor hereby appoints Ms. Eve Leung c/o Suites 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Agreement and direct such service to Unit C, 17th Floor, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao and service on Ms. Eve Leung (or such substitute) shall be deemed to be service on the Vendor.

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13.02 The Purchaser hereby appoints Mr. Kee Wong of Suites 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Agreement and service on Mr. Kee Wong (or such substitute) shall be deemed to be service on the Purchaser.

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SCHEDULE 1

Details of the Company

Name	:	Jetup Electronic (Shenzhen) Co., Ltd.
Date of incorporation	:	15 April 1993
Place of incorporation	:	Shenzhen, PRC
Registered Office	:
Total Investment	:	HK$225,400,000
Registered Capital	:	HK$181,200,000
Paid Up Capital	:	HK$181,200,000
Name of investor on the	:	the Vendor
certificate of approval
Directors	:	Chui Kam Wai (Chairman)
		Yuen Lap Kei
		Yeoh Teck Hooi
		Koo Ming Kown
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

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SCHEDULE 2

Tenancies

A lease under a Factory and Dormitory Lease Contract dated 17 October 2003 made between the Company (as lessee) and (as lessor), supplemented by three supplemental contracts made between the said parties on 21 July 2004, 13 October 2004 and 1 May 2007, certain particulars of which are set out below:

Property :	certain factory premises, staff dormitory, canteen, escalators, restaurants located at
Term:	commencing on 1 March 2004 and ending on 29 February 2012
Total rent :	RMB769,070 per month

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SCHEDULE 3

The Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of the Company that all the information contained in Schedules 1 and 2 is correct and:-

1.	The Sale Interest
(A)	The Vendor is the beneficial owner of the Sale Interest with full authority to sell and transfer the full legal and beneficial ownership of the Sale Interest registered in its name to the Purchaser.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Sale Interest or any part of the unissued share capital of the Company and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Sale Interest are fully paid up and rank pari passu in all respects with the existing issued shares of the Company.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in the Company.
(E)	The Sale Interest represents 91% of the registered capital of the Company.
2.	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of the Company produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of the Company have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of the Company.
3.	Compliance with legal requirements

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(A)	The Company is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with the Company concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the appropriate legislation to be filed with the appropriate regulatory bodies in the PRC or elsewhere where the Company operates (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions, and (e) directors and other officers.
(C)	There has been no material breach by the Company or any of its officers (in his capacity as such) of any legislation or regulations affecting it or its business.
4.	Accounts, bank accounts and borrowings
(A)	The Accounts show a true and fair view of the results of the Company for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of the Company as at such date, in each case on the basis stated therein.
(B)	The Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of the Company were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by the Company;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;
(iv)	give a true and fair view of the state of affairs and financial position of the Company at the Accounts Date and of the results of the Company for the financial period covered by the Accounts and the management financial information therein fairly represent the state of affairs and financial position of the Company for the period covered by the Accounts;

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(v) (including the management financial information therein) are not affected by any unusual or non-recurring items which are not disclosed in the Accounts.

(C)	The Company has no outstanding liability for Taxation of any kind which has not been provided for in the Accounts.
(D)	The Company has no outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital which has not been adequately disclosed or provided for in the Accounts.
(E)	The Company owns free from encumbrance all its undertaking and assets shown or comprised in the Accounts and all such assets are in its possession or under its control.
(F)	The Company does not hold any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which the Company is a party:-

(i)	there has been no contravention of or non-compliance with any provision or term of any of the arrangements;
(ii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iii)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(iv)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(v)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party, except the existing guarantees provided by the Vendor.

(H) The total amount borrowed by the Company :-

(i)	from its bankers does not exceed its financial facilities; and
(ii)	from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

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(I)	Having regard to the existing facilities available to the Company, the Company has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Accounts, the Company has not declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of the Company and the Company has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of the Company in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	the Company has not declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of the Company has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of the Company has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by the Company;
(vii)	no asset of the Company has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by the Company, and no contract involving expenditure by it of a capital nature has been entered into by the Company, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interest;
(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) by the Company in

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	circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;
(ix)	no event has occurred which gives rise to any liability for Taxation to the Company on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to the Company.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to the Company :-

(i)	any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);
(ii)	any agreements or arrangements to which the Company is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses (save and except for the existing incentive bonus share already disclosed to Purchaser);
(iii)	save and except for the compliance with the applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which the Company is under any actual or contingent liability in respect of :-

(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

(v) any contract to which the Company is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision

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	disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interest;
(vi)	any agreement entered into by the Company otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between the Company and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to the operation of the Company which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Sale Interest or of compliance with any other provision of this Agreement; and
(viii)	any contract which materially restricts the freedom of the Company to carry on the business now carried on by it in any part of the world.

(B)	Neither the Company nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which the Company is a party or any approval or franchise granted by any governmental or regulatory bodies to the Company and which is material to the operation of the Company.
(C)	No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of the Company.
(D)	The Company is not under any obligation, nor is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	The Company is not a party to nor has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	The Company is not a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.
(G)	The Company has no outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.
(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, the Company

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	has not given any guarantee or warranty, or made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.
7.	Insurance
(A)	The Company has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against the Company by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	Neither the Company nor the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle any Company to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against the Company is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of the Company in respect of any act or default for which the Company might be vicariously liable.
9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of the Company.
(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of the Company.
(C)	The Company has not stopped payment or is insolvent or unable to pay its debts.

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(D)	No material unsatisfied judgment is outstanding against the Company.
(E)	No event analogous to any of the foregoing has occurred in or outside PRC in respect of the Company.
10.	Delinquent acts
	The Company has not committed nor is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. The Company has not received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of the Company.
11.	Tax returns
(A)	The Company has, in respect of all years of assessment since incorporation or establishment falling before the date of this Agreement, made or caused to be made all proper returns, and has supplied or caused to be supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere if applicable ) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from the Company or regarding the availability to the Company of any relief from Taxation or duty.
(B)	The Company has sufficient records relating to past events during the six years prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	The Company has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Accounts.
12.	Stamp and other duties
	The Company has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by the Company under any such Ordinance, legislation or regulations.
13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against the Company exceeding the amount of HK$500,000.
(B)	Full provision has been made in the Accounts for all and any compensation or severance payment for which the Company is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.

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(C)	Save and except for compliance with the relevant statutory requirements, the Company is not paying, nor is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.
(D)	The Company has no outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.
(E)	No employee of the Company who is crucial to the operation of Jetup has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	The Company has not given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	The Company has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.
16.	Interests in companies, partnerships or joint ventures
(A)	The Company has no interest in the share capital of any company or in any partnership or joint venture.
(B)	The Company has not acted or carried on business in partnership with other person(s) or is a member of any corporate or unincorporated body, undertaking or associate.
17.	Tenancies
(A)	The Tenancies are all good, valid and subsisting and have in no way become void or voidable.

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(B)	All covenants, obligations, conditions and restrictions imposed upon the Company under the Tenancies have been duly and promptly observed and performed.
(C)	The agreements for the Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time.
(D)	No Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Agreement.
18.	Intellectual property rights
(A)	To the best of the Company’s knowledge and belief, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Agreement by the Company do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property or another person.
(B)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to the Company in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

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SCHEDULE 4

Restricted Actions Pending Completion

The Vendor shall ensure that the Company shall not do nor agree (conditionally or unconditionally) to do any of the following (save with the consent of the Purchaser):

1.	dispose of, or grant any option or right of pre-emption in respect of, or acquire, any fixed asset of the Company with a net book value in excess of HK$200,000;
2.	enter into any transaction, agreement, contract or commitment or acquire or dispose of any interest in any asset (except in the ordinary course of business as carried on at the date of this Agreement) or assume or incur, or agree to assume or incur, a liability, obligation or expense (actual or contingent) except in the ordinary course of business;
3.	enter into any joint venture, partnership or profit sharing agreements;
4.	create, extend, grant or issue any mortgage, charge, debenture, pledge, lien, encumbrance or other security or third party right (other than liens arising in the ordinary course of business) over any of the assets or the undertaking of the Company;
5.	create, extend or grant any guarantee, indemnity, performance bond or other security or contingent obligation in the nature of a financial obligation including letters of comfort or support, save in each case in respect of letters of credit and similar instruments, utility guarantees and otherwise in the ordinary course of business;
6.	create, allot or issue any shares, loan capital, securities convertible into shares or any option or right to subscribe in respect of any shares, loan capital or securities convertible into shares;
7.	declare, pay or make any dividend or distribution;
8.	incur any liability in the nature of a borrowing (other than by bank overdraft or other short term facility (including for the issuance of letters of credit and similar instruments) in the ordinary course of business within limits established by the relevant bank at the date of this Agreement);
9.	make or agree to make or approve any capital commitment or approve any capital expenditure in excess of HK$200,000;
10.	allow any of its insurances to lapse or do anything to make any policy of insurance void or voidable or would or would be likely to, increase any premium payable in respect of such policy or prejudice the ability to effect equivalent insurance in the future;

- 24 -

11.	alter the provisions of its Memorandum or Articles of Association or other constitutional documents or adopt or pass regulations or resolutions inconsistent with them;
12.	reduce the share capital of the Company;
13.	engage or dismiss other than for just cause any employee who is crucial to the operation of the Company or make any material variation to the terms and conditions of employment of any employee (other than indexation increases in salary in the ordinary course of business) or provide or agree to provide any gratuitous payment or benefit to any employee or any of their dependants;
14.	enter into, amend, terminate or dispose of any tenancy or lease agreement in respect of any property or acquire or dispose of any interest in any property;
15.	appoint any directors or secretaries;
16.	start any civil, criminal, arbitration or other proceedings;
17.	other than in the ordinary course of its business, not to settle, compromise, release, discharge or compound any civil, criminal, arbitration or other proceedings or any liability, claim, action, demand or dispute or waive any right in respect of the foregoing;
18.	pass any resolution in general meeting (other than any resolution constituting ordinary business conducted at an annual general meeting);
19.	make or issue any return or correspondence in connection with Taxation unless for the purpose of complying with the relevant regulatory requirements;
20.	change the accounting reference date of the Company; or
21.	make any change to the accounting procedures or principles by reference to which its accounts are drawn up.

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IN WITNESS whereof this Agreement has been entered into the day and year first above written.

SIGNED by	)
for and on behalf of	)	/s/ Chui Kam Wai
J.I.C. TECHNOLOGY COMPANY LIMITED	)
in the presence of:- /s/ [signature illegible]	)
	)
SIGNED by	)
NAM TAI ELECTRONICS, INC.	)	/s/ Koo Ming Kown
for and on behalf of	)
in the presence of:- /s/ [signature illegible]	)	/s/ John Q. Farina
	)

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EX-4.32

Exhibit 4.32

DATED 24^th September 2007

NAM TAI ELECTRONICS, INC.

and

NAM TAI ELECTRONIC AND ELECTRICAL PRODUCTS LIMITED

AGREEMENT

relating to the sale and purchase of
(1) 91% interest in Jetup Electronic (Shenzhen) Co., Ltd.
; and
(2) the entire issued share capital of Zastron Precision-Tech Limited

I N D E X

Clause		Page
1.	Interpretation		1
2.	Sale and Purchase		6
3.	Conditions		6
4.	Completion		7
5.	Warranties		8
6.	Undertakings in respect of the Convertible Bond		11
7.	Conduct of Business Pending Completion		11
8.	Costs		11
9.	Further Assurance		12
10.	Miscellaneous		12
11.	Notices		13
12.	Time of the Essence		13
13.	Governing Law		13
14.	Process Agents		13

Schedules
Schedule 1	Details of Jetup	14
Schedule 2	Details of Zastron	15
Schedule 3	Details of the Zastron Subsidiaries	16
Schedule 4	Jetup Tenancies	19
Schedule 5	Zastron Properties	20
Schedule 6	Zastron Intellectual Property Rights	21
Schedule 7	Jetup Warranties	22
Schedule 8	Zastron Warranties	33
Schedule 9	Convertible Bond	47
Schedule 10	Restricted Actions Pending Completion	66
Execution Clause		68

THIS AGREEMENT is dated 24^th September 2007 and is made

BETWEEN :-

(1)	NAM TAI ELECTRONICS, INC., a company incorporated in the British Virgin Islands whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Vendor”); and
(2)	NAM TAI ELECTRONIC AND ELECTRICAL PRODUCTS LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Purchaser”).

NOW IT IS HEREBY AGREED as follows:-

1.	INTERPRETATION
1.01	In this Agreement unless the context otherwise requires:-

(a) the following expressions shall have the following meanings:

Expression	Meaning
“Accounts Date”	30 June 2007
“Business Day”	means a day other than a Saturday or Sunday, on which banks are open in Hong Kong to the general public for business
“Companies Ordinance”	the Companies Ordinance (Chapter 32, as amended from time to time, of the Laws of Hong Kong)
“Completion”	completion of the sale and purchase of the Sale Interests in accordance with the terms and conditions of this Agreement
“Completion Date”	the date on which Completion occurs
“Conditions”	the conditions set out in Clause 3.01
“Conversion Shares”	NTEEP Shares to be issued upon conversion of the Convertible Bond
“Convertible Bond”	the convertible bond to be issued by the Purchaser in the form set out in Schedule 9 at Completion in an aggregate principal amount of US$311,430,294.87 (HK$2,429,156,300) with a conversion price of US$0.23 per NTEEP Share

- 1 -

“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China
“Intellectual Property”	(a)      patents, trade marks, service marks, registered designs, applications for any of those rights, trade and business names (including internet domain names and e-mail address names), unregistered trade marks and service marks, copyrights, database rights, know-how, rights in designs and inventions;
	(b)      rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); and
	(c)      rights of the same or similar effect or nature as or to those in paragraphs (a) and (b),
	in each case in any part of the world
“Jetup”	Jetup Electronic (Shenzhen) Co., Ltd. , a company incorporated in the PRC wholly owned by J.I.C. as at the date hereof, certain basic information of which is set out in Schedule 1
“Jetup Accounts”	the audited financial statements of Jetup, in respect of each of the three financial years ended 31 December 2006 and of the six months ended 30 June 2007
“Jetup Acquisition Agreement”	an agreement of even date made between the Vendor (as purchaser) and J.I.C. (as vendor) relating to the sale and purchase of the Jetup Sale Interest
“Jetup Sale Interest”	91% interest of Jetup legally and beneficially owned by J.I.C. as at the date hereof

- 2 -

“Jetup Tenancies”	the tenancies and sub-tenancies where Jetup is the lessor or the lessee, particulars of which are set out in Schedule 4
“Jetup Warranties”	the representations, warranties and undertakings in respect of Jetup set out in Schedule 7
“J.I.C.”	J.I.C. Technology Company Limited, a company incorporated in the Cayman Islands and whose shares are listed on the Main Board of the Stock Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“MOP”	Macau Patacas, the lawful currency of Macau
“NTEEP”	Nam Tai Electronic and Electrical Products Limited, a company incorporated in the Cayman Islands and shares of which are listed on the Main Board of the Stock Exchange
“NTEEP Shares”	ordinary shares of the Purchaser of HK$0.01 each
“PRC”	the People’s Republic of China and, for the purposes of this Agreement, excluding Hong Kong, Macau and Taiwan
“Sale Interests”	the Jetup Sale Interest and the Zastron Sale Interest
“Stamp Duty Ordinance”	the Stamp Duty Ordinance (Chapter 117, as amended from time to time, of the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Taxation”	(i) any liability to any form of taxation whenever created or imposed and whether of the PRC, the Cayman Islands or of any other part of the world and without prejudice to the generality of the foregoing includes profits tax, provisional profits tax, interest tax, salaries tax, property tax, estate duty, death duty, capital duty, stamp duty, payroll tax, withholding tax, rates, customs and excise duties and generally any tax, duty, impost, levy or rate or any amount payable to the revenue, customs or fiscal authorities whether of the PRC, the Cayman Islands or of any other part of the world;

- 3 -

	(ii) such an amount or amounts as is referred to in sub-clause (i) above; and
	(iii) all costs, interest, penalties, charges, fines and expenses incidental or relating to the liability to taxation or the loss, reduction, modification, cancellation or deprivation of relief or of a right to repayment of the taxation
“US$”	the United States dollars, the lawful currency of the United States of America
“Warranties”	the Jetup Warranties and the Zastron Warranties
“Zastron”	Zastron Precision-Tech Limited, a company incorporated in the Cayman Islands and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Schedule 2
“Zastron Accounts”	the consolidated audited financial statements of the Zastron Group, in respect of each of the three financial years ended 31 December 2006 and the six months ended 30 June 2007 and, where appropriate, any shorter period from the date of their incorporation or establishment and ended on the Accounts Date
“Zastron Group”	Zastron and the Zastron Subsidiaries
“Zastron Intellectual Property Rights”	all Intellectual Property used or required to be used, by the Zastron Group in, or in connection with, the business of the Zastron Group;
“Zastron Properties”	the properties owned by members of the Zastron Group, particulars of which are set out in Part 1 of Schedule 5
“Zastron Sale Interest”	the entire issued share capital of Zastron legally and beneficially owned by the Vendor
“Zastron Subsidiaries”	all the subsidiaries of Zastron set out in Schedule 3
“Zastron Tenancies”	the tenancies and sub-tenancies where members of the Zastron Group are lessors or lessees, particulars of which are set out in Part 2 of Schedule 5

- 4 -

“Zastron Warranties” the representations, warranties and undertakings in respect of the Zastron Group set out in Schedule 8

(b)	words and expressions defined in the Companies Ordinance shall bear the same respective meanings herein;
(c)	reference to any statute or statutory provision shall include any statute or statutory provision which amends or replaces, or has amended or replaced, it shall include any subordinate legislation made under the relevant statute;
(d)	a body corporate shall be deemed to be associated with another body corporate if it is a holding company or a subsidiary of that other body corporate or a subsidiary of a holding company of that body corporate;
(e)	references to Clauses and sub-clauses and Schedules are to Clauses and sub-clauses of and Schedules to this Agreement;
(f)	references to writing shall include typewriting, printing, lithography, photography, telecopier, telex and electronic messages and any mode of reproducing words in a legible and non-transitory form;
(g)	words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporate; and

1.02	Headings are for convenience only and shall not affect the construction of this Agreement.
1.03	In construing this Agreement:-

(a)	the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
(b)	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

1.04 The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Schedules.

- 5 -

1.05	Amounts denominated in US$ have been converted, for the purpose of illustration only, into HK$ and vice versa at the rate of HK$7.8 = US$1.0
2.	SALE AND PURCHASE
2.01	On the terms set out in this Agreement, the Vendor shall as beneficial owner sell the Sale Interests to the Purchaser free from all liens, charges, encumbrances, equities and adverse interests and with all rights attached or accruing thereto at the date hereof (including the right to receive all dividends and other distributions declared, made or paid on or after the date hereof) and the Purchaser relying on the representations, warranties, undertakings and indemnities of the Vendor contained or referred to herein shall purchase the Sale Interests at Completion.
2.02	The consideration for the sale of the Sale Interests is the sum of HK$2,729,156,300 (US$349,891,833.33), which shall be satisfied by (i) a cash payment of HK$300,000,000 (US$38,461,538.46) to be made by the Purchaser to the Vendor prior to 30 June 2008; and (ii) the issue of the Convertible Bond by the Purchaser in favour of the Vendor.
3.	CONDITIONS
3.01	Completion is conditional upon the following conditions being satisfied on or before 31 December 2007 (the “Longstop Date”):

(a)	the obtaining in terms acceptable to the Purchaser, of all consents, approvals, clearances and authorisations of any relevant governmental authorities or other relevant third parties in the PRC and the Cayman Islands as may be necessary for the execution and implementation of this Agreement;
(b)	Jetup and all members of the Zastron Group receiving all relevant consents and approvals from third parties as may be necessary in connection with the proposed change in shareholding of Jetup and the Zastron Group so as to ensure that Jetup and all members of the Zastron Group maintain all their respective existing contractual and other rights following the transfer of the Sale Interests (including, without limitation, the consent of the existing bankers of Jetup and all members of the Zastron Group to continue to provide the existing banking facilities to Jetup and all members of the Zastron Group following the transfer of the Sale Interests);
(c)	the passing at an extraordinary general meeting of the Purchaser of ordinary resolution(s) approving this Agreement and the transactions contemplated by this Agreement by the shareholders of the Vendor (excluding such shareholders who shall be required to abstain from voting under the Listing Rules);
(d)	the passing at an extraordinary general meeting of JI.C. of ordinary

- 6 -

	resolution(s) approving the Jetup Acquisition Agreement and the transactions contemplated by the Jetup Acquisition Agreement by the shareholders of J.I.C. (excluding such shareholders who shall be required to abstain from voting under the Listing Rules);
(e)	if required, the Cayman Islands Monetary Authority approving the issue of the Convertible Bond;
(f)	the Listing Committee of the Stock Exchange granting approval of the listing of, and permission to deal in the Conversion Shares; and
(g)	the increase of the authorised share capital of the Purchaser to HK$30,000,000 divided into 3,000,000,000 shares of HK$0.01 each having been effective.

3.02	The Vendor will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Purchaser when each of the said Conditions have been satisfied.
3.03	The Purchaser will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Vendor when each of the said Conditions have been satisfied.
3.04	(a) If at any time the Vendor becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it will immediately inform the Purchaser.

(b) If at any time the Purchaser becomes aware of a fact or circumstance that might prevent a condition being satisfied, it will immediately inform the Vendor.

3.05	If any of the Conditions have not been satisfied on or before the Longstop Date then this Agreement will immediately terminate and all rights and obligations of the parties shall cease immediately upon termination.
4.	COMPLETION
4.01	Completion of the sale and purchase of the Sale Interests shall take place on the fifth Business Day following satisfaction or waiver of the Conditions, or such other date as the Vendor and the Purchaser may agree in writing at Unit C, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao when all (but not part only) of the following business shall be transacted:-

(a) the Vendor shall give a copy of such documents and take such actions as have been required (including but not limited to the obtaining of all approvals of the relevant governmental authorities in the PRC) to give a

- 7 -

	good title to the Sale Interests and to enable the Purchaser to be registered as the holder thereof;
(b)	the Vendor shall deliver to or to the order of the Purchaser evidence satisfactory to the Purchaser that a good title to the Sale Interests have been passed to the Purchaser and the Purchaser has been registered as the holder thereof;
(c)	the Vendor shall deliver or (if the Purchaser shall so agree) make available to or to the order of the Purchaser such of the following as the Purchaser may require:-

(i)

all statutory and minute books (which shall be written up to but not including the Completion Date), certificate of incorporation, certificate of incorporation on change of name (if any), certificate of business registration and common seal of Jetup and all members of the Zastron Group; and

(ii)

all books and accounts and other records of Jetup and all members of the Zastron Group, title deeds, leases, tenancy agreements and other documents relating to any properties owned, leased and/or occupied by Jetup and all members of the Zastron Group (except where such documents are held by a third party pursuant to any mortgage or other security arrangements) and all other documents and records of Jetup and all members of the Zastron Group;

(d) the Purchaser shall deliver to or to the order of the Vendor the duly executed Convertible Bond.

4.02	No party shall be obliged to complete this Agreement or perform any obligations under Clause 4.01 unless the other party demonstrates that it is able to comply fully with the requirements of Clause 4.01 simultaneously.
5.	WARRANTIES
5.01	The Vendor hereby:-

(a) represents, warrants and undertakes to the Purchaser that each of the Warranties set out in Schedules 8 and 9 is true and accurate in all respects and is not misleading and accept that the Purchaser is entering into this Agreement in reliance upon each of the Warranties notwithstanding any investigations which the Purchaser or any of its directors, officers, employees, agents or advisors may have made and notwithstanding any information regarding Jetup or the Zastron Group which may otherwise have come into the possession of any of the foregoing;

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(b) undertakes to indemnify the Purchaser against all claims, liabilities, losses, costs and expenses the Purchaser may suffer or incur or which may be made against the Purchaser either before or after the commencement of and arising out of, or in respect of, any action in connection with :-

(i)	the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;
(ii)	any legal proceedings in which the Purchaser claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for the Purchaser; or
(iii)	the enforcement of any such settlement or judgment.

5.02	Without prejudice to any other rights and remedies available at any time to the Purchaser (including but not limited to any right to damages for any loss suffered by the Purchaser) the Purchaser may (if the effect of any breach of any Warranty is that Jetup, any member of the Zastron Group, or any asset of any such company, is worth less than its value would have been if there had been no such breach or that Jetup or any member of the Zastron Group is or will be under a liability or an increased or substituted liability which would not have subsisted if there had been no such breach) by notice to the Vendor require it to make good to the Jetup or the relevant member of the Zastron Group the diminution in the value of the asset or all loss occasioned by such liability or increased or substituted liability by a payment in cash to the relevant company or to pay to the Purchaser an amount equal to the diminution thereby caused in the value of the Sale Interests. If any such payment gives rise to a liability to Taxation on the part of the relevant company or the Purchaser as the recipient thereof, such payment shall be increased by such an amount as shall ensure that, after payment of such Taxation, the recipient shall have received an amount equal to the payment otherwise required hereby to be paid.
5.03	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Agreement.
5.04	Any rights to which the Purchaser may be or become entitled by reason of any of the Warranties being untrue or misleading or breached and all remedies which may be available to the Purchaser in consequence of any of the Warranties being untrue or misleading or breached shall enure for the benefit of any associated company of the Purchaser which is the beneficial owner for the time being of any of the Sale Interests purchased by the Purchaser hereunder and accordingly any loss which is sustained by such beneficial owner for the time being of the Sale Interests in

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	consequence of any of the Warranties being untrue or misleading or breached shall be deemed to be that of the Purchaser and the Purchaser may bring proceedings and exercise any other remedy on the footing that it has been the beneficial owner of the Sale Interests at all times from Completion.
5.05	The Vendor shall not be liable in respect of any breach of the Warranties after the earlier of (i) 31 August 2008; and (ii) the Vendor ceasing to be the controlling shareholder (as defined under the Listing Rules) of the Purchaser except in respect of those matters which have been the subject of a claim made hereunder or in respect of those circumstances which may give rise to a claim made hereunder and of which notice has been given to the Vendor on or prior to the earlier of (i) 31 August 2008; and (ii) the Vendor ceasing to be the controlling shareholder of the Purchaser.
5.06	The total liability of the Vendor under this Agreement shall not exceed HK$2,729,156,300 (US$348,891,833.33).
5.07	The Vendor shall have no liability under this Agreement unless the aggregate amount of all valid claims which could otherwise be made under this Agreement shall exceed HK$500,000 (US$64,102.56).
5.08	The Vendor shall not be liable for breach of any Warranty to the extent that such liability arises by reason of any act or omission effected by the Purchaser or Jetup or any member of the Zastron Group after Completion (other than action taken by the Purchaser or on its behalf in establishing that any of the Warranties being untrue or misleading or breached) or by reason of any retrospective change in the law coming into force after the date hereof or to the extent such liability arises or is increased by an increase in rates of taxation after the date hereof with retrospective effect.
5.09	The Vendor hereby undertakes that it will from time to time and at any time prior to the earlier of (i) 31 August 2008; and (ii) the Vendor ceasing to be the controlling shareholder of the Purchaser, forthwith disclose in writing to the Purchaser any event, fact or circumstance which may become known to them after the date hereof and which is materially inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of any of the Sale Interests or which may entitle the Purchaser to make any claim under this Agreement.
5.10	The Vendor shall not, and shall procure that none of Jetup and the Zastron Group shall, do or allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given.

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5.11	It is hereby agreed between the parties hereto that no party will have the right to rescind this Agreement.
5.12	The Vendor shall not (in the event of any claim being made against the Vendor in connection with the sale of the Sale Interests to the Purchaser) make any claim against Jetup or any member of the Zastron Group or against any director or employee of Jetup or any member of the Zastron Group on whom the Vendor may have relied before agreeing to any term of this Agreement.
6.	UNDERTAKINGS IN RESPECT OF THE CONVERTIBLE BOND
6.01	Subject to the Completion and the issue of the Convertible Bond to the Vendor:-

(a)

the Vendor hereby undertakes to the Purchaser that it will not convert any of the convertible bonds into NTEEP Shares under the Convertible Bond unless the public float of the NTEEP Shares will not fall below the level required by the Listing Rules as a result of such conversion; and

(b)

in the event that an offer is made to the shareholders of the Purchaser to acquire the whole or any part of the issued share capital of the Purchaser at any time prior to the maturity date of the Convertible Bond, the Purchaser shall use reasonable endeavours to procure that such an offer is extended to the Vendor in respect of the Conversion Shares issued in the name of the Vendor during the period of the offer.

7.	CONDUCT OF BUSINESS PENDING COMPLETION
7.01	The Vendor will procure that none of Jetup and the Zastron Group shall (save with the consent of the Purchaser), prior to Completion (or the termination of this Agreement (whichever is earlier)):

(a)	do anything outside its ordinary course of business;
(b)	do anything which is not in accordance with its past practices; or
(c)	without prejudice of generality of Clauses 7.01(a) and 7.01(b), undertake any of the activities listed in Schedule 10.

8.	COSTS
8.01	Each party shall pay its own costs, stamp duty and capital duty in relation to the negotiations leading up to the sale and purchase of the Sale Interests and the preparation, execution and carrying into effect of this Agreement and the transactions contemplated or referred to herein.

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9.	FURTHER ASSURANCE
9.01	Each of the parties hereto undertakes to the other party that it will do all such acts and things and execute all such deeds and documents as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Agreement and the transactions hereby contemplated.
10.	MISCELLANEOUS
10.01	Without prejudice to the provisions of this Agreement stipulating that certain acts, obligations and/or events are to be performed or shall take place on a particular date or dates, any provision of this Agreement which is capable of being performed after but which has not been performed at or before Completion and all warranties and indemnities and other undertakings contained in or entered into pursuant to this Agreement shall remain in full force and effect notwithstanding Completion.
10.02	This Agreement shall be binding on and enure for the benefit of the successors of each of the parties but shall not be assignable.
10.03	Any remedy conferred on any party hereto for breach of this Agreement (including the breach of any Warranty) shall be in addition and without prejudice to all other rights and remedies available to it and the exercise of or failure to exercise any remedy shall not constitute a waiver by such party of any of its rights or remedies.
10.04	This Agreement constitutes the whole agreement between the parties relating to the transactions hereby contemplated (no party having relied on any representation or warranty made by any other party which is not a term of this Agreement) and no future variation shall be effective unless made in writing and signed by each of the parties hereto.
10.05	This Agreement shall supersede all and any previous agreements or arrangements between the parties hereto or any of them relating to Jetup or any member of the Zastron Group or to any other matter referred to in this Agreement and all or any such previous agreements or arrangements (if any) shall cease and determine with effect from the date hereof.
10.06	If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the remaining provisions hereof shall in no way be affected or impaired thereby.

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11.	NOTICES
11.01	Any notice required or permitted to be given by or under this Agreement may be given by delivering the same to the party in question by delivering it to such party in person or in the case of a body corporate by delivering it to its registered office for the time being or by sending it in a prepaid envelope by registered mail to the party concerned at its address shown in this Agreement or to such other address in Hong Kong as the party concerned may have notified to the others in accordance with this Clause and any such notice shall be deemed to be served when the same would first be received at the address of the party to whom it is addressed in the normal course of such method of delivery.
12.	TIME OF THE ESSENCE
12.01	Time shall be of the essence of this Agreement.
13.	GOVERNING LAW
13.01	This Agreement shall be governed by and construed in accordance with the laws of Hong Kong and each party hereby submits to the non-exclusive jurisdiction of the courts of Hong Kong as regards any claim or matter arising under this Agreement.
14.	PROCESS AGENTS
14.01	The Vendor hereby appoints Ms. Eve Leung c/o Suites 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Agreement and to direct such service to Unit C, 17th Floor, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao and service on Ms. Eve Leung (or such substitute) shall be deemed to be service on the Vendor.
14.02	The Purchaser hereby appoints Mr. Kee Wong of Suites 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Agreement and service on Mr. Kee Wong (or such substitute) shall be deemed to be service on the Purchaser.

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SCHEDULE 1

Details of Jetup

Name	:	Jetup Electronic (Shenzhen) Co., Ltd.
Date of incorporation	:	15 April 1993
Place of incorporation	:	Shenzhen, PRC
Registered Office	:
Total Investment	:	HK$225,400,000
Registered Capital	:	HK$181,200,000
Paid Up Capital	:	HK$181,200,000
Name of investor on the certificate of approval	:	J.I.C. Technology Company Limited
Directors	:	Chui Kam Wai (Chairman)
		Yuen Lap Kei
		Yeoh Teck Hooi
		Koo Ming Kown
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

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SCHEDULE 2

Details of Zastron

Name	:	Zastron Precision-Tech Limited
Date of incorporation	:	9 June 2003
Place of incorporation	:	Cayman Islands
Registered Office	:	Cricket Square, Hutchins Drive, P.O. Box 2681 GT, Grand Cayman, KY1-1111, Cayman Islands
Authorised share capital	:	HK$100,000 divided into 10,000,000 shares of HK$0.01 each
Issued share capital	:	HK$0.1 divided into 10 shares of HK$0.01 each (registered in the name of the Vendor)
Directors	:	Koo Ming Kown
		John Quinto Farina
		Lei Lai Fong
		Wang Lu Ping
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

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SCHEDULE 3

Details of the Zastron Subsidiaries

(1) Zastron Electronic (Shenzhen) Co., Ltd.

Name	:	Zastron Electronic (Shenzhen) Co., Ltd.
Date of incorporation	:	26 March 1992
Place of incorporation	:	Shenzhen, PRC
Registered Office	:
Total Investment	:	US$99,000,000
Registered Capital	:	US$46,500,000
Paid Up Capital	:	HK$46,500,000
Name of investor on the certificate of approval	:	Zastron Precision-Tech Limited
Directors	:	Koo Ming Kown
		Lei Lai Fong
		Wang Lu Ping
		Wang Shi Ping
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

(2) Zastron Precision-Flex (Wuxi) Co., Ltd.

Name	:	Zastron Precision-Flex (Wuxi) Co., Ltd.
Date of incorporation	:	23 November 2006
Place of incorporation	:	Wuxi, PRC
Registered Office	:

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Total Investment	:	US$65,000,000
Registered Capital	:	US$21,675,000
Paid Up Capital	:	US$4,335,000
Name of investor on the certificate of approval	:	Zastron Precision-Tech Limited
Directors	:	Koo Ming Kown
		Lei Lai Fong
		Wang Lu Ping
		Junji Mochizuki
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

(3) Zastron Precision-Tech (Wuxi) Co., Ltd.

Name	:	Zastron Precision-Tech (Wuxi) Co., Ltd.
Date of incorporation	:	23 November 2006
Place of incorporation	:	Wuxi, PRC
Registered Office	:
Total Investment	:	US$63,000,000
Registered Capital	:	US$21,000,000
Paid Up Capital	:	US$4,200,000
Name of investor on the certificate of approval	:	Zastron Precision-Tech Limited
Directors	:	Koo Ming Kown
		Lei Lai Fong
		Wang Lu Ping
		Junji Mochizuki

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Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

(4) Zastron (Macao Commercial Offshore) Company Limited

Name in English	:	Zastron (Macao Commercial Offshore) Company Limited
Name in Chinese	:
Name in Portuguese	:	Zastron (Comercial Offshore De Macau) Limitada
Date of incorporation	:	23 November 2006
Place of incorporation	:	Macau
Registered Office	:
Share Capital	:	MOP 100,000 (owned by Zastron Precision-Tech Limited)
Directors	:	Koo Ming Kown
		Lei Lai Fong
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

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SCHEDULE 4

Jetup Tenancies

A lease under a Factory and Dormitory Lease Contract dated 17 October 2003 made between the Jetup (as lessee) and ) (as lessor), supplemented by three supplemental contracts made between the said parties on 21 July 2004, 13 October 2004 and 1 May 2007, certain particulars of which are set out below:

Property	:	certain factory premises, staff dormitory, canteen, escalators, restaurants located at
Term	:	commencing on 1 March 2004 and ending on 29 February 2012
Total rent	:	RMB769,070 per month

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SCHEDULE 5

Zastron Properties

Part 1 — Properties owned by the Zastron Group

1.	B14-A 6-009-011-016)
2.	: 6-007-040-013)
3.	The premises acquired from

Part 2 — The Zastron Tenancies

1. A lease under a Lease dated 25 July 2005 made between The HongKong Land Property Company, Limited (as landlord) and Zastron Precision-Tech Limited (as tenant), certain particulars of which are set out below:

Property	:	Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong
Term	:	commencing on 1 September 2005 and ending on 31 August 2008
Rent	:	HK$ 226,330 per month

2. A lease under a Lease and Use of Ancillary Facilities Agreement dated 24 March 2006 made between Namtai Electronic (Shenzhen) Co., Ltd. (as lessor) and Zastron Electronic (Shenzhen) Co., Ltd. (as lessee), certain particulars of which are set out below:

Property	:	certain factory premises and office premises located at
Term	:	commencing on 1 April 2007 and ending on 31 March 2012
Rent	:	HK$ 830,000 per month

3. A lease under a Lease Contract made in July 2007 between F. Rodrigues (Sucessores) Limitada (as lessor) and Zastron (Comercial Offshore De Macau) Limitada (as lessee), certain particulars of which are set out below:

Property	:
Term	:	commencing on 10 July 2007 and ending on 9 July 2009
Rent	:	HK$9,100 per month

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SCHEDULE 6

Zastron Intellectual Property Rights

				Goods and Services for
	Place of	Registration		which the Trademark
Trademark	Registration	No.	Class	registered is	Expiry Date
	Japan	5004413	9	Note 1	17 November 2016
	Hong Kong	300417014	9	Note 2	8 May 2015
	Hong Kong	300417024	28, 42	Note 3	7 September 2015

	Place of application
Trademark	for Registration	Application No.	Class	Application Date
	PRC	4943046	42	14 October 2005
	PRC	4943048	9	14 October 2005
	PRC	4646814	9	9 May 2005
	PRC	4908906	42	22 September 2005
	PRC	4908882	28	22 September 2005

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SCHEDULE 7

Jetup Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of Jetup that all the information contained in Schedules 1 and 4 is correct and:-

1.	The Jetup Sale Interest
(A)	Upon the Completion, the Purchaser will have the full legal and beneficial ownership of the Jetup Sale Interest registered in its name.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Jetup Sale Interest or any part of the unissued share capital of Jetup and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Jetup Sale Interest is fully paid up and rank pari passu in all respects with the existing issued shares of Jetup.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in Jetup.
(E)	The Jetup Sale Interest represents 91% of the registered capital of Jetup.
2.	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of Jetup produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of Jetup have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of Jetup.
3.	Compliance with legal requirements

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(A)	Jetup is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with Jetup concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the appropriate legislation to be filed with the appropriate regulatory bodies in the PRC or elsewhere where Jetup operates (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions and (e) directors and other officers.
(C)	There has been no material breach by Jetup or any of its officers (in his capacity as such) of any legislation or regulations affecting it or its business.
4.	Accounts, bank accounts and borrowings
(A)	The Jetup Accounts show a true and fair view of the results of Jetup for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of Jetup as at such date, in each case on the basis stated therein.
(B)	The Jetup Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of Jetup were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by Jetup;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;
(iv)	give a true and fair view of the state of affairs and financial position of Jetup at the Accounts Date and of the results of Jetup for the financial period covered by the Jetup Accounts and the management financial information therein fairly represent the state of affairs and financial position of Jetup for the period covered by the Jetup Accounts; and
(v)	(including the management financial information therein) are not affected

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by any unusual or non-recurring items which are not disclosed in the Jetup Accounts.

(C)	Jetup has no outstanding liability for Taxation of any kind which has not been provided for in the Jetup Accounts.
(D)	Jetup has no outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital which has not been adequately disclosed or provided for in the Jetup Accounts.
(E)	Jetup owns free from encumbrance all its undertaking and assets shown or comprised in the Jetup Accounts and all such assets are in its possession or under its control.
(F)	Jetup does not hold any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which Jetup is a party:-

(i)	there has been no contravention of or non-compliance with any provision or term of any of such arrangements;
(ii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iii)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(iv)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(v)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party, except the existing guarantee provided by J.I.C..

(H) The total amount borrowed by Jetup :-

(i)	from its bankers does not exceed its financial facilities; and
(ii)	from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

(I) Having regard to the existing facilities available to Jetup, Jetup has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other

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	contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Jetup Accounts, Jetup has not declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of Jetup and Jetup has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of Jetup in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	Jetup has not declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of Jetup has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of Jetup has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by Jetup;
(vii)	no asset of Jetup has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by Jetup, and no contract involving expenditure by it of a capital nature has been entered into by Jetup, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Jetup Sale Interest;
(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) by Jetup in circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;

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(ix)	no event has occurred which gives rise to any liability for Taxation to Jetup on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Jetup Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Jetup Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to Jetup.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to Jetup :-

(i)	any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);
(ii)	any agreements or arrangements to which Jetup is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses (save and except for the existing incentive bonus scheme already disclosed to the Purchaser);
(iii)	save and except for the compliance with applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which Jetup is under any actual or contingent liability in respect of :-

(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

(v) any contract to which Jetup is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Jetup Sale Interest;

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(vi)	any agreement entered into by Jetup otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between Jetup and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to the operation of Jetup which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Jetup Sale Interest or of compliance with any other provision of this Agreement; and
(viii)	any contract which materially restricts the freedom of Jetup to carry on the business now carried on by it in any part of the world.

(B)	Neither Jetup nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which Jetup is a party or any approval or franchise granted by any governmental or regulatory bodies to Jetup and which is material to the operation of Jetup.
(C)	No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of Jetup.
(D)	Jetup is not under any obligation, nor is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	Jetup is not a party to nor has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	Jetup is not a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.
(G)	Jetup has no outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.
(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, Jetup has not given any guarantee or warranty, or made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.

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7.	Insurance
(A)	Jetup has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against Jetup by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	Neither Jetup nor the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle any Jetup to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against Jetup is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of Jetup in respect of any act or default for which Jetup might be vicariously liable.
9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of Jetup.
(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of Jetup.
(C)	Jetup has not stopped payment or is insolvent or unable to pay its debts.
(D)	No material unsatisfied judgment is outstanding against Jetup.
(E)	No event analogous to any of the foregoing has occurred in or outside PRC in respect of Jetup.

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10.	Delinquent acts
	Jetup has not committed nor is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. Jetup has not received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of Jetup.
11.	Tax returns
(A)	Jetup has, in respect of all years of assessment since incorporation or establishment falling before the date of this Agreement, made or caused to be made all proper returns, and has supplied or caused to be supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere if applicable) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from Jetup or regarding the availability to Jetup of any relief from Taxation or duty.
(B)	Jetup has sufficient records relating to past events during the six years prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	Jetup has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Jetup Accounts.
12.	Stamp and other duties
	Jetup has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by Jetup under any such Ordinance, legislation or regulations.
13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against Jetup exceeding the amount of HK$500,000.
(B)	Full provision has been made in the Jetup Accounts for all and any compensation or severance payment for which Jetup is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.
(C)	Save and except for the compliance with the relevant statutory requirements, Jetup is not paying, nor is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.

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(D)	Jetup has no outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.
(E)	No employee of Jetup who is crucial to the operation of Jetup has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	Jetup has not given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	Jetup has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.
16.	Interests in companies, partnerships or joint ventures
(A)	Jetup has no interest in the share capital of any company or in any partnership or joint venture.
(B)	Jetup has not acted or carried on business in partnership with other person(s) nor is a member of any corporate or unincorporated body, undertaking or associate.
17.	Tenancies
(A)	The Jetup Tenancies are all good, valid and subsisting and have in no way become void or voidable.
(B)	All covenants, obligations, conditions and restrictions imposed upon Jetup under the Jetup Tenancies have been duly and promptly observed and performed.
(C)	The agreements for the Jetup Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time.
(D)	No Jetup Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Agreement.

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18.	Intellectual property rights
(A)	To the best of Jetup’s knowledge and belief, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Agreement by Jetup do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property of another person.
(B)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to Jetup in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

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SCHEDULE 8

Zastron Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of the Zastron Group that all the information contained in Schedules 2, 3, 5 and 6 is correct and:-

1.	The Zastron Sale Interest
(A)	The Vendor is the beneficial owner of the Zastron Sale Interest with full authority to sell and transfer the full legal and beneficial ownership of the Zastron Sale Interest registered in its name to the Purchaser.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Zastron Sale Interest or any part of the unissued share capital of Zastron and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Zastron Sale Interest is fully paid up and rank pari passu in all respects with the existing issued shares of Zastron.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in Zastron.
(E)	The Zastron Sale Interest represents the entire issued share capital of Zastron.
2	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of each member of the Zastron Group produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of each member of the Zastron Group have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of the relevant company.

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3.	Compliance with legal requirements
(A)	Each member of the Zastron Group is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with each member of the Zastron Group concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the Companies Ordinance or other appropriate legislation to be filed with the Registrar of Companies or other appropriate regulatory bodies in Hong Kong or elsewhere where the relevant member of the Zastron Group was established or operates (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions and, (e) directors and other officers.
(C)	There has been no material breach by any member of the Zastron Group or any of its officers (in his capacity as such) of any legislation or regulations affecting it or its business.
4.	Accounts, bank accounts and borrowings
(A)	The Zastron Accounts show a true and fair view of the combined results of the Zastron Group for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of the Zastron Group as at such date, in each case on the basis stated therein.
(B)	The Zastron Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of the relevant company were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by the relevant member of the Zastron Group;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;

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(iv)

give a true and fair view of the state of affairs and financial position of the relevant member of the Zastron Group at the Accounts Date and of the results of the Zastron Group for the financial period covered by the Zastron Accounts and the management financial information therein fairly represent the state of affairs and financial position of the relevant member of the Zastron Group for the period covered by the Zastron Accounts;

(v)

(including the management financial information therein) are not affected by any unusual or non-recurring items which are not disclosed in the Zastron Accounts.

(C)	None of the members of the Zastron Group has any outstanding liability for Taxation of any kind which has not been provided for in the Zastron Accounts.
(D)	None of the members of the Zastron Group has any outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital which has not been adequately disclosed or provided for in the Zastron Accounts.
(E)	Each member of the Zastron Group owns free from encumbrance all its undertaking and assets shown or comprised in the Zastron Accounts and all such assets are in its possession or under its control.
(F)	No member of the Zastron Group holds any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which a member of the Zastron Group is a party:-

(i)	full details and true and correct copies of all documents relating thereto have been supplied to the Purchaser;
(ii)	there has been no contravention of or non-compliance with any provision of any such document;
(iii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iv)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(v)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(vi)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party.

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(H) The total amount borrowed by each member of the Zastron Group :-

(i)	from its bankers does not exceed its financial facilities; and
(ii)	from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

(I)	Having regard to the existing facilities available to the Zastron Group, each member of the Zastron Group has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Zastron Accounts, no member of the Zastron Group has declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of any member of the Zastron Group and each member of the Zastron Group has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of any member of the Zastron Group in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	no member of the Zastron Group has declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of each member of the Zastron Group has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of each member of the Zastron Group has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by any member of the Zastron Group;

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(vii)	no asset of any member of the Zastron Group has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by any member of the Zastron Group, and no contract involving expenditure by it of a capital nature has been entered into by any member of the Zastron Group, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interests;
(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) by any member of the Zastron Group in circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;
(ix)	no event has occurred which gives rise to any liability for Taxation to any member of the Zastron Group on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Zastron Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Zastron Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to any member of the Zastron Group is bad or doubtful.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to any member of the Zastron Group :-

(i)

any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);

(ii)

any agreements or arrangements to which any member of the Zastron Group is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses save pursuant to the joint venture or co-operative agreements relating to the establishment and operations of the Zastron Subsidiaries (save and except for the existing incentive bonus scheme already disclosed to the Purchaser);

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(iii)	save and except for the compliance with applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which any member of the Zastron Group is under any actual or contingent liability in respect of :-

(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

(v)	any contract to which any member of the Zastron Group is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interests;
(vi)	any agreement entered into by any member of the Zastron Group otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between any member of the Zastron Group and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to the operation of the relevant member of the Zastron Group which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Sale Interests or of compliance with any other provision of this Agreement; and
(viii)	any contract which materially restricts the freedom of any member of the Zastron Group to carry on the business now carried on by it in any part of the world.

(B)

None of the members of the Zastron Group nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which any member of the Zastron Group is a party or any approval or franchise granted by any governmental or regulatory bodies to any member of the Zastron Group and which is material to the operation of the relevant member of the Zastron Group.

(C)

No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of any member of the Zastron Group.

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(D)	No member of the Zastron Group is under any obligation, or is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	Save and except for the internal loan of the Zastron Group and a guarantee given by the Vendor to a Zastron Subsidiary in the PRC as disclosed to the Purchaser, no member of the Zastron Group is a party to or has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	No member of the Zastron Group is a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.
(G)	No member of the Zastron Group has any outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.
(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, no member of the Zastron Group has given any guarantee or warranty, or made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.
7.	Insurance
(A)	Each member of the Zastron Group has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against any member of the Zastron Group by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	None of the members of the Zastron Group and the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle

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	any member of the Zastron Group to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against any member of the Zastron Group is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of any member of the Zastron Group in respect of any act or default for which any member of the Zastron Group might be vicariously liable.
9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of any member of the Zastron Group.
(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of any member of the Zastron Group.
(C)	No member of the Zastron Group has stopped payment or is insolvent or unable to pay its debts within the meaning of section 178 of the Companies Ordinance.
(D)	No material unsatisfied judgment is outstanding against any member of the Zastron Group.
(E)	No event analogous to any of the foregoing has occurred in or outside the Cayman Islands, the PRC or Macau in respect of any member of the Zastron Group.
10.	Delinquent acts
	No member of the Zastron Group has committed or is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. No member of the Zastron Group has received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of any member of the Zastron Group.
11.	Tax returns
(A)	Each member of the Zastron Group has, in respect of all years of assessment since incorporation or establishment falling before the date of this Agreement, made or caused to be made all proper returns, and has supplied or caused to be

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	supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from any member of the Zastron Group or regarding the availability to any member of the Zastron Group of any relief from Taxation or duty.
(B)	Each member of the Zastron Group has sufficient records relating to past events during the six years or any shorter period from the date of incorporation or establishment of the relevant Zastron Subsidiary prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	Each member of the Zastron Group has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Zastron Accounts.
12.	Stamp and other duties
	Each member of the Zastron Group has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by any member of the Zastron Group under any such Ordinance, legislation or regulations.
13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against any member of the Zastron Group exceeding the amount of HK$500,000.
(B)	Full provision has been made in the Zastron Accounts for all and any compensation or severance payment for which any member of the Zastron Group is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.
(C)	Save and except for the compliance with relevant statutory requirement, no member of the Zastron Group is paying or is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.
(D)	No member of the Zastron Group has outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.

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(E)	No employee of any member of the Zastron Group who is crucial to the operation of Zastron Group has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	No member of the Zastron Group has given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	Each member of the Zastron Group has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.
16.	Interests in companies, partnerships or joint ventures
(A)	Save for the Zastron Subsidiaries, Zastron has no interest in the share capital of any company or in any partnership or joint venture.
(B)	Each of the Zastron Subsidiaries is validly and beneficially held by the Zastron Group as to such percentage of equity interest referred to in the audited combined results of the Zastron Group for the period ended on the Accounts Date.
(C)	No member of the Zastron Group acts or carries on business in partnership with other person(s) or is a member (otherwise than through the holding of share capital) of any corporate or unincorporated body, undertaking or associate or had or is liable on any share or security which is not fully paid up or which carries any liability.
17.	Properties
	The Zastron Properties represent all of the real property anywhere owned, used or occupied by the Zastron Group or in respect of which the Zastron Group has any estate, interest, right or liability, and in respect of each of the Zastron Properties owned by the Zastron Group:-

(i) Zastron or the relevant Zastron Subsidiary is at the date hereof the registered and beneficial owner of and has a good and marketable title to the Zastron Property(ies) free from all adverse claims, encumbrances, liens and third party rights whatsoever;

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(ii)	no contracts have been entered into by any member of the Zastron Group to sell, assign, subdivide, let, licence, charge, mortgage, partition, share, grant any option over or otherwise dispose of an interest in or part with the possession or occupation of any of the Properties or any part thereof or otherwise encumber the Zastron Properties nor is there any agreement by any member of the Zastron Group to do any of the aforesaid;
(iii)	Zastron or the relevant Zastron Subsidiary is in physical possession and actual occupation of the whole of the Zastron Property(ies) on an exclusive basis and no right of occupation or enjoyment has been acquired or is in the course of being acquired by any third party or has been granted or agreed to be granted to any third party;
(iv)	all of the title deeds and documents necessary to prove title to the Zastron Properties are in the possession or under the control of the Zastron Group and the documents of title consist of original documents or, where appropriate, properly certified copies thereof and original executed tenancy agreements in respect of the tenancies, all of which have been stamped with the full amount of the stamp duty (if applicable) payable thereon;
(v)	no right, easement, licence or informal arrangement, public or private, is enjoyed or in the course of being acquired by or against any of the Zastron Properties or any part thereof;
(vi)	the rates and all other outgoings in respect of the Zastron Properties have been duly paid to the date hereof;
(vii)	all necessary certificates of compliance, occupation permits and other consents and authorities for the present use of the Zastron Properties have been issued and are in force and there are no circumstances known or which would on reasonable enquiry be known to the Vendor, any member of the Zastron Group or any director of any of the foregoing which may result in the forfeiture, avoidance, withdrawal, restriction or non-renewal of or amendment to the same;
(viii)	there are no outstanding notices, complaints or requirements issued by any governmental body, authority or department in respect of any of the Zastron Properties;
(ix)	there is no circumstance which (with or without the taking of any other action) would entitle any third party to exercise a right or power of entry to or to take possession of or which would in any other way affect or restrict the continued possession, enjoyment or present use by Zastron or the relevant Zastron Subsidiary of the Zastron Properties or any part thereof;

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(x)	the Vendor is unaware of any planning or other proposals or restrictions made or intended to be made by any governmental body, authority or department concerning the compulsory acquisition or resumption of any of the Zastron Properties or any part thereof or which would adversely affect any of the Zastron Properties or any part thereof or the value of such Zastron Properties;
(xi)	none of the Zastron Properties is subject to any restrictions on its being assigned, mortgaged, charged, let or otherwise disposed of;
(xii)	if applicable, Zastron or the relevant Zastron Subsidiary has a good and valid policy of insurance in respect of the Zastron Property(ies) with coverage in its reinstatement value and the premiums in respect of such policy are fully paid up to date;
(xiii)	to the best of the knowledge and belief of the Vendor, no action, claim, demand or liability (contingent or otherwise) in respect of any of the Zastron Properties or any part thereof is outstanding;
(xiv)	there have been no unauthorised structures erected upon or unauthorised alterations made to any of the Zastron Properties or any part thereof;
(xv)	there are no outstanding or anticipated complaints, proposals, schemes, resolutions, notices, orders, requirements or recommendations of any district or other authority affecting any of the Zastron Properties or any part thereof or the use thereof or the owner or occupier thereof, none of the Zastron Properties comprises a listed building, no part of any of the Zastron Properties is included in a conservation area and there are no pending applications in respect of any of the Zastron Properties;
(xvi)	there are no outstanding or anticipated monetary claims or liabilities contingent or otherwise in respect of any of the Zastron Properties or any part thereof including compensation for disturbance or improvements in respect of any past or present tenancy;
(xvii)	so far as the Vendor is aware, none of the Zastron Properties which are situated in the PRC has been contaminated with any hazardous substance which may constitute an impediment to the use or intended use of any of such Zastron Properties, and no pollution of the environment in violation of any applicable pollution or environmental protection laws or regulations of the PRC has occurred or is occurring in connection with such Properties;
(xviii)	so far as the Vendor is aware, none of the Zastron Group has received any complaint in relation to any material harm or pollution to the environment from any governmental or local authority;

and in relation to the Zastron Tenancies :-

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(a)	the Zastron Tenancies are all good, valid and subsisting and have in no way become void or voidable;
(b)	all covenants, obligations, conditions and restrictions imposed upon any member of the Zastron Group under the Zastron Tenancies have been duly and promptly observed and performed;
(c)	the agreements for the Zastron Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time;
(d)	no Zastron Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Agreement.

18.	Intellectual property rights
(A)	Full details of all of the Zastron Intellectual Property Rights (including, without limitation, applications for registration) are set out in Schedule 6. All of such details are true and accurate in all respects.
(B)	Each of the Zastron Intellectual Property Rights is:

(i)	valid, subsisting and enforceable and nothing has been done or omitted to be done by which it may cease to be valid and enforceable;
(ii)	solely legally and beneficially owned by, or vested in or validly granted to, the Zastron Group and are not restricted in any way;
(iii)	used exclusively by the Zastron Group; and
(iv)	not, and will not be, the subject of a claim, opposition, or challenge from a person including, without limitation, an employee of the Zastron Group as to title or pursuant to sections 58 and 59 of the Patents Ordinance 1997 or section 14(2) of the Copyright Ordinance 1997 or otherwise, if applicable.

(C)	In respect of all of the registered Zastron Intellectual Property Rights and all applications for registration, all renewal fees and steps required for their maintenance or protection have been paid and taken.
(D)	Nothing has been done or omitted to be done by which a person is or will be able to seek the cancellation, revocation, rectification or other modification of a registration of any of the Zastron Intellectual Property Rights or to acquire a compulsory licence thereunder.

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(E)	In respect of all applications for the registration of any of the Zastron Intellectual Property Rights there are no circumstances known to the Vendor which would render such applications unacceptable to the Patents Registry, Trade Marks Registry or Designs Registry in Hong Kong or such other office or authority in any relevant jurisdiction in their current form.
(F)	No person has asserted any moral rights in respect of any of the Zastron Intellectual Property Rights used by the Zastron Group in relation to its business at any time prior to the date of this Agreement.
(G)	There is and has been no breach nor is there any fact or matter which would or may give rise to a breach of the terms of all licences or rights which have been granted by the Zastron Group relating to the Zastron Intellectual Property Rights.
(H)	None of the Vendor or any member of the Zastron Group is aware of nor has it at any time acquiesced in, nor authorised the use by any third party of any of the Zastron Intellectual Property Rights other than in accordance with the terms of the licences or other arrangements disclosed pursuant to warranty (G) above and there is, and has been, no infringement or threatened infringement of any of the Zastron Intellectual Property Rights.
(I)	There is and has been no proceedings or disputes in any jurisdiction concerning any of the Zastron Intellectual Property Rights and no proceedings concerning any of the Zastron Intellectual Property Rights is pending or threatened.
(J)	To the best of the knowledge and belief of the Zastron Group, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Agreement by the Zastron Group do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property or another person.
(K)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to the Zastron Group in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
(L)	No member of the Zastron Group has disclosed or agreed to disclose any of the Zastron Intellectual Property Rights in the nature of know-how or confidential information to any person other than its employees for the purpose of carrying on its business.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

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SCHEDULE 9

Convertible Bond

NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED
(incorporated in Cayman Islands with limited liability)

2.5 per cent. Convertible Bonds due [ ] 2012

The Bonds in respect of which this Certificate is issued are in registered form and form part of the series as specified in the above title (the “Bonds”) of Nam Tai Electronic & Electrical Products Limited (the “Company”).

For value received, the Company promises to pay to the person who appears at the relevant time on the register of bondholders as the holder of Bonds in respect of which Certificate is issued (the “Bondholder”), such amount as shall become due in respect of this Certificate and otherwise to comply with the terms and conditions attached hereto (the “Conditions”).

The Company hereby certifies that the name of Nam Tai Electronics, Inc. is, at the date hereof, entered in the register of Bondholders held at the office of the Company in Hong Kong as the holder of Bonds in the principal amount of US$311,430,294.87.

This Certificate is evidence of entitlement only. Title to the Bonds passes only on due registration in the register of Bondholders and only the duly registered holder is entitled to payments on Bonds and any interest accrued thereon in respect of which this Certificate is issued.

GIVEN under the Seal of Nam Tai Electronic & Electrical Products Limited.

Dated:

By:

Director

Notes:-

The Bonds cannot be transferred to bearer on delivery and are only transferable to the extent permitted by Condition 2 and 3 of the terms and conditions thereof. This certificate must be delivered to the secretary of Nam Tai Electronic & Electrical Products Limited for cancellation and reissue of an appropriate certificate in the event of any such transfer.

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For endorsement in the event of partial conversion

Date Amount Converted Amount Outstanding

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TERMS AND CONDITIONS OF THE BONDS

1.	Period and Status
1.1	Subject as provided herein, the Company shall repay such principal moneys outstanding under the Bonds to the Bondholders together with all interest accrued thereon up to and including the date of repayment on the fifth anniversary of the date of issue of the Bonds.
1.2	The obligations of the Company arising under the Bonds constitute general, unsecured obligations of the Company and will rank equally among themselves and pari passu with all other present and future unsecured and unsubordinated obligations of the Company except for obligations accorded preference by mandatory provisions of applicable law. No application will be made for a listing of the Bonds.
2.	Transfers of Bonds
2.1	The Bondholder may only assign or transfer the Bonds to any wholly-owned subsidiary of the Bondholder or to any transferee subject to the requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) from time to time and with the consent of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). Any assignment or transfer of Bonds shall be in respect of a minimum of US$500,000 (or an integral multiple thereof) of the outstanding principal amount of the Bond, but not otherwise.
2.2	In relation to any assignment or transfer of the Bonds permitted under these Conditions, the Certificate (as defined below) must be delivered for registration to the office of the Company in Hong Kong accompanied by: (i) a duly executed form of transfer in a form agreed between the Company and the Bondholder; (ii) in the case of the execution of the transfer form on behalf of a corporation by its officers, the authority of that person or those persons to do so; (iii) such other evidence (including legal opinions) as the Company may reasonably require if the transfer form is executed by some other person on behalf of the Bondholder; (iv) the necessary applications to the Stock Exchange for the assignment or transfer of the Bonds (if applicable); and (v) such other evidence (including legal opinions) as the Company may reasonably require that the conditions and requirements of this Condition 2.2 are satisfied. The Company shall, within 7 days of receipt of such documents from the Bondholder, cancel the existing Certificate and issue a new certificate under the seal of the Company, in favour of the transferee or assignee as applicable.
2.3	Any legal and other costs and expenses which may be incurred by the Company in connection with any transfer or assignment of the Bonds or any request therefor shall be borne by the Bondholder(s).

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3.	Form, Denomination and Title
3.1	The Bonds are issued in registered form in the denomination of US$500,000 each or integral multiples thereof without coupons attached. A bond certificate (each a “Certificate”) will be issued to each Bondholder in respect of its registered holding of Bonds.
3.2	Title to the Bonds passes by registration in the register of Bondholders. In these Conditions, references to “Bondholder” and, in relation to a Bond, “holder” are to the person in whose name a Bond is registered.
4.	Interest
4.1	The Bonds bear interest from the date of issue (the “Issue Date”) at the rate of 2.5 per cent. per annum on the principal amount outstanding from time to time. Interest is payable by the Company semi-annually in arrears on dates falling six calendar months and one year after the date of issue of the Bond and on the anniversaries of such dates for each year thereafter.
4.2	In the event that Bondholders have converted part or the whole of the principal amount of a Bond into shares of the Company (the “Shares”), the Bondholder shall be entitled to accrued interest in respect of such part or whole of the principal amount for the period from the last preceding interest payment date (or the Issue Date, as the case may be) up to the Conversion Date (as defined below) concerned.
4.3	Interest shall accrue on a daily basis and shall be calculated on the basis of the actual number of days elapsed and a 365-day year.
5.	Conversion
5.1	Conversion Right
	Subject to the public float of the Shares not being less than the applicable percentage as required by the Listing Rules, Bondholders have the right to convert the whole or part of the principal amount of the Bond into Shares at any time during the period on and after the date of issue of the Bond up to and including the fifth anniversary date of the issue of the Bond in a minimum principal amount of US$500,000 plus accrued interest up to the Conversion Date (as defined below) concerned or such lower amount as the Company may accept from time to time. This right may be exercised by the Bondholder delivering to the office of the Company in Hong Kong, on a day on which the Stock Exchange is open for trading (a “trading day”), a conversion notice (a “Conversion Notice”) in writing stating the intention of the Bondholder to convert and the address to which the share certificates in respect of the Shares are to be delivered or, in the case of Shares to be held in scripless form, details of the applicable account in the Central Clearing and Settlement System together with this Certificate. The conversion date in respect of a Bond (the “Conversion Date”) shall be deemed to

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	be the day immediately following such trading day. The Company shall be responsible for payment of all taxes and stamp duty, issue and registration duties (if any) and stock exchange levies and charges (if any) arising on any such conversion.
5.2	Conversion Price
	The conversion price at which Shares will be issued upon conversion of Bonds is, initially, US$0.23 per Share as adjusted pursuant to Condition 6 (the “Conversion Price”).
5.3	Conversion Shares
	The number of Shares to be issued on conversion of a Bond shall be determined by dividing the principal amount of the Bond plus accrued interest up to the Conversion Date concerned by the Conversion Price in effect on the Conversion Date. The Company shall register the person or persons designated for the purpose in the Conversion Notice as holder(s) of the relevant number of Shares in its share register and shall cause its share registrar to deliver such certificate or certificates to the person or at the place specified in the Conversion Notice within 5 trading days, after the Conversion Date. Fractions of Shares will not be issued on conversion but (except in cases where any such cash payment would amount to less than US$1.0) an equivalent cash payment in Hong Kong dollars will be made to the Bondholder in respect of such fraction.
6.	Adjustments
(a)	Subject as hereinafter provided, the Conversion Price shall from time to time be adjusted in accordance with the following relevant provisions and so that if the event giving rise to any such adjustment shall be such as would be capable of falling within more than one of sub-paragraphs (i) to (vii) inclusive of this Condition 6(a) it shall fall within the first of the applicable paragraphs to the exclusion of the remaining paragraphs:-

(i)

If and whenever the Shares by reason of any consolidation or sub-division become of a different nominal amount, the Conversion Price in force immediately prior thereto shall be adjusted by multiplying it by the revised nominal amount and dividing the result by the former nominal amount. Each such adjustment shall be effective from the close of business in Hong Kong on the day immediately preceding the date on which the consolidation or sub-division becomes effective.

(ii)

If and whenever the Company shall issue (other than in lieu of a cash dividend) any Shares credited as fully paid by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve fund), the Conversion Price in force immediately prior to such issue shall be adjusted by multiplying it by the aggregate nominal amount of the issued Shares immediately before such issue and dividing

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the result by the sum of such aggregate nominal amount and the aggregate nominal amount of the Shares issued in such capitalisation. Each such adjustment shall be effective (if appropriate retroactively) from the commencement of the day next following the record date for such issue.

(iii)

If and whenever the Company shall make any Capital Distribution (as defined in Condition 6(b)) to holders (in their capacity as such) of Shares (whether on a reduction of capital or otherwise) or shall grant to such holders rights to acquire for cash assets of the Company or any of its subsidiaries, the Conversion Price in force immediately prior to such distribution or grant shall be adjusted by multiplying it by the following fraction:-

A – B

A

where:-

A =	the market price (as defined in Condition 6(b)) on the date on which the Capital Distribution or, as the case may be, the grant is publicly announced or (failing any such announcement) next preceding the date of the Capital Distribution or, as the case may be, of the grant; and
B =	the fair market value on the day of such announcement or (as the case may require) the next preceding day, as determined in good faith by an approved merchant bank, of the portion of the Capital Distribution or of such rights which is attributable to one Share,

Provided that:-

(aa)	if in the opinion of an approved merchant bank, the use of the fair market value as aforesaid produces a result which is significantly inequitable, such merchant bank may instead determine (and in such event the above formula shall be construed as if B meant) the amount of the said market price which should properly be attributed to the value of the Capital Distribution or rights; and
(bb)	the provisions of this sub-paragraph (iii) shall not apply in relation to the issue of Shares paid out of profits or reserves and issued in lieu of a cash dividend.

Each such adjustment shall be effective (if appropriate retroactively) from the commencement of the day next following the record date for the Capital Distribution or grant.

(iv) If and whenever the Company shall offer to holders of Shares new Shares for subscription by way of rights, or shall grant to holders of Shares any

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options or warrants to subscribe for new Shares, at a price which is less than 95 per cent. of the market price at the date of the announcement of the terms of the offer or grant, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before the date of the announcement of such offer or grant by a fraction of which the numerator is the number of Shares in issue immediately before the date of such announcement plus the number of Shares which the aggregate of the amount (if any) payable for the rights, options or warrants and of the amount payable for the total number of new Shares comprised therein would purchase at such market price and the denominator is the number of Shares in issue immediately before the date of such announcement plus the aggregate number of Shares offered for subscription or comprised in the options or warrants (such adjustment to become effective (if appropriate retroactively) from the commencement of the day next following the record date for the offer or grant) Provided however that no such adjustment shall be made if the Company shall make a like offer or grant (as the case may be) at the same time to the Bondholder (subject to such exclusions or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in any territory in or outside Hong Kong) as if it had exercised the Conversion Rights under the Bond in full on the day immediately preceding the record date for such offer or grant.

(v)

(aa) If and whenever the Company shall issue wholly for cash any securities which by their terms are convertible into or exchangeable for or carry rights of subscription for new Shares, and the total Effective Consideration per Share (as defined below) initially receivable for such securities is less than 95 per cent. of the market price at the date of the announcement of the terms of issue of such securities, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the issue by a fraction of which the numerator is the number of Shares in issue immediately before the date of the issue plus the number of Shares which the total Effective Consideration receivable for the securities issued would purchase at such market price and the denominator is the number of Shares in issue immediately before the date of the issue plus the number of Shares to be issued upon conversion or exchange of, or the exercise of the subscription rights conferred by, such securities at the initial conversion or exchange rate or subscription price. Such adjustment shall become effective (if appropriate retrospectively) from the close of business in Hong Kong on the trading day next preceding whichever is the earlier of the date on which the issue is announced and the date on which the issuer determines the conversion or exchange rate or subscription price.

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(bb) If and whenever the rights of conversion or exchange or subscription attached to any such securities as are mentioned in section (aa) of this sub-paragraph (v) are modified so that the total Effective Consideration per Share initially receivable for such securities shall be less than 95 per cent. of the market price at the date of announcement of the proposal to modify such rights of conversion or exchange or subscription, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such modification by a fraction of which the numerator is the number of Shares in issue immediately before the date of such modification plus the number of Shares which the total Effective Consideration receivable for the securities issued at the modified conversion or exchange price would purchase at such market price and of which the denominator is the number of Shares in issue immediately before such date of modification plus the number of Shares to be issued upon conversion or exchange of or the exercise of the subscription rights conferred by such securities at the modified or exchange rate or subscription price. Such adjustment shall become effective as at the date upon which such modification shall take effect. A right of conversion or exchange or subscription shall not be treated as modified for the foregoing purposes where it is adjusted to take account of rights or capitalisation issues and other events normally giving rise to adjustment of conversion or exchange terms.

For the purposes of this sub-paragraph (v), the “total Effective Consideration” receivable for the securities issued shall be deemed to be the consideration receivable by the Company for any such securities plus the additional minimum consideration (if any) to be received by the Company upon (and assuming) the conversion or exchange thereof or the exercise of such subscription rights, and the total Effective Consideration per Share initially receivable for such securities shall be such aggregate consideration divided by the number of Shares to be issued upon (and assuming) such conversion or exchange at the initial conversion or exchange rate or the exercise of such subscription rights at the initial subscription price, in each case without any deduction for any commissions, discounts or expenses paid, allowed or incurred in connection with the issue.

(vi) If and whenever the Company shall issue wholly for cash any Shares at a price per Share which is less than 95 per cent. of the market price at the date of the announcement of the terms of such issue, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before the date of such announcement by a fraction of which the numerator is the number of Shares in issue immediately before the date of such announcement plus the number of Shares which the aggregate amount payable for the issue would purchase at such market price and the denominator is the number of Shares in issue immediately

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before the date of such announcement plus the number of Shares so issued. Such adjustment shall become effective on the date of the issue.

(vii)

If and whenever the Company shall issue Shares for the acquisition of asset at a total Effective Consideration per Share (as defined in this sub-paragraph (vii) below) which is less than 95 per cent. of the market price (as defined in Condition 6(b)) at the date of the announcement of the terms of such issue, the Conversion Price shall be adjusted in such manner as may be determined by an approved merchant bank. Such adjustment shall become effective on the date of issue. For the purpose of this sub-paragraph (vii) “total Effective Consideration” shall be the aggregate consideration credited as being paid for such Shares by the Company on acquisition of the relevant asset without any deduction of any commissions, discounts or expenses paid, allowed or incurred in connection with the issue thereof, and the “total Effective Consideration per Share” shall be the total Effective Consideration divided by the number of Shares issued as aforesaid.

(b)	For the purposes of this Condition 6:-
	“announcement” shall include the release of an announcement to the press or the delivery or transmission by telephone, telex or otherwise of an announcement to the Stock Exchange and “date of announcement” shall mean the date on which the announcement is first so released, delivered or transmitted.
	“approved merchant bank” means a merchant bank of repute in Hong Kong selected by the Company and agreed by the Bondholder for the purpose of providing a specific opinion or calculation or determination hereunder and in the absence of such agreement shall be Yu Ming Investment Management Limited;
	“Capital Distribution” shall (without prejudice to the generality of that phrase) include distributions in cash or specie. Any dividend charged or provided for in the accounts for any financial period shall (whenever paid and however described) be deemed to be a Capital Distribution provided that any such dividend shall not automatically be so deemed if it is paid out of the aggregate of the net profits (less losses) attributable to the holders of Shares for all financial periods after 31 December 2006 as shown in the audited consolidated profit and loss account of the Company and its subsidiaries for each financial period ended 31 December;
	“issue” shall include allot;
	“market price” means the average of the closing prices of one Share on the Stock Exchange for each of the last five Stock Exchange trading days on which dealings in the Shares on the Stock Exchange took place ending on the last such dealing day preceding the day on or as of which the market price is to be ascertained;

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	“Shares” includes, for the purposes of Shares comprised in any issue, distribution or grant pursuant to sub-paragraphs (iii), (iv), (v), (vi) or (vii) of Condition 6(a), any such ordinary shares of the Company as, when fully paid, will be Shares;
	“reserves” includes unappropriated profits;
	“rights” includes rights in whatsoever form issued.
(c)	The provisions of sub-paragraphs (ii), (iii), (iv), (v), (vi) and (vii) of Condition 6(a) shall not apply to:-

(i)	an issue of fully paid Shares upon the exercise of any conversion rights attached to securities convertible into Shares or upon exercise of any rights (including any conversion of the Bond) to acquire Shares provided that an adjustment has been made under this Condition 6 in respect of the issue of such securities or granting of such rights (as the case may be);
(ii)	an issue of Shares to officers or employees of the Company or any of its subsidiaries pursuant to options granted under the Pre-IPO Share Option Scheme adopted by the Company on 22 March 2004, options granted or to be granted under the Share Option Scheme adopted by the Company on 8 April 2004 or any subsequent employee share option scheme(s);
(iii)	an issue by the Company of Shares or by the Company or any subsidiary of the Company of securities wholly or partly convertible into or rights to acquire Shares, in any such case in consideration or part consideration for the acquisition of any other securities, assets or business provided that an adjustment has been made (if appropriate) under this Condition 6 in respect of the issue of such securities or granting of such rights (as the case may be);
(iv)	an issue of fully paid Shares by way of capitalisation of all or part of any subscription right reserve, or any similar reserve which has been or may be established pursuant to the terms of any securities wholly or partly convertible into or rights to acquire Shares; or
(v)	an issue of Shares pursuant to a scrip dividend scheme where an amount not less than the nominal amount of the Shares so issued is capitalised and the market value of such Shares is not more than 110 per cent. of the amount of dividend which holders of the Shares could elect to or would otherwise receive in cash, for which purpose the “market value” of a Share shall mean the average of the closing prices for such Stock Exchange trading days on which dealings in the Shares took place (being not less than five such days) as are selected by the directors of the Company in connection with determining the basis of allotment in respect of the relevant scrip dividend and which fall within the period of one month ending on the last day on which holders of Shares may elect to receive or (as the case may be) not to receive the relevant dividend in cash.

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(d)	Any adjustment to the Conversion Price shall be made to the nearest one cent so that any amount under half a cent shall be rounded down and any amount of half a cent or more shall be rounded up and in no event shall any adjustment (otherwise than upon the consolidation of Shares into Shares of a larger nominal amount) involve an increase in the Conversion Price. In addition to any determination which may be made by the directors of the Company every adjustment to the Conversion Price shall be certified (at the option of the Company) by an approved merchant bank.
(e)	Notwithstanding anything contained herein, no adjustment shall be made to the Conversion Price in any case in which the amount by which the same would be reduced in accordance with the foregoing provisions of this Condition would be less than one cent and any adjustment that would otherwise be required then to be made shall not be carried forward.
(f)	If the Company or any subsidiary of the Company shall in any way modify the rights attached to any share or loan capital so as wholly or partly to convert or make convertible such share or loan capital into, or attach thereto any rights to acquire, Shares, the Company shall appoint an approved merchant bank to consider whether any adjustment to the Conversion Price is appropriate (and if an approved merchant bank shall certify that any such adjustment is appropriate the Conversion Price shall be adjusted accordingly and the provisions of Conditions 6(d), 6(e) and 6(h) shall apply).
(g)	Notwithstanding the provisions of Condition 6(a), in any circumstances where the Directors of the Company shall consider that any adjustment to the Conversion Price provided for under the said provisions should not be made or should be calculated on a different basis or that an adjustment to the Conversion Price should be made notwithstanding that no such adjustment is required under the said provisions or that an adjustment should take effect on a different date or with a different time from that provided for under the provisions, the Company may appoint an approved merchant bank to consider whether for any reason whatever the adjustment to be made (or the absence of adjustment) would or might not fairly and appropriately reflect the relative interests of the persons affected thereby and, if an approved merchant bank shall consider this to be the case, the adjustment shall be modified or nullified or an adjustment made instead of no adjustment in such manner including without limitation, making an adjustment calculated on a different basis) and/or the adjustment shall take effect from such other date and/or time as shall be certified by an approved merchant bank to be in its opinion appropriate.
(h)	Whenever the Conversion Price is adjusted as herein provided the Company shall give notice to the Bondholders that the Conversion Price has been adjusted (setting forth the event giving rise to the adjustment, the adjustment, the Conversion Price in effect prior to such adjustment, the adjusted Conversion Price and the effective date thereof) and shall at all times thereafter so long as the

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	Bond remains outstanding make available for inspection at its office in Hong Kong a signed copy of the said certificate of an approved merchant bank and a certificate signed by a director of the Company setting forth brief particulars of the event giving rise to the adjustment, the Conversion Price in effect prior to such adjustment, the adjusted Conversion Price and the effective date thereof and shall, on request, send a copy thereof to the Bondholder.
(i)	If application of any of the provisions of this Condition 6 would but for this paragraph (i) result in the Conversion Price being reduced so that on conversion Shares shall fail to be issued at a discount to their nominal value, then the Conversion Price shall be adjusted to an amount equal to the nominal value of one Share.
7.	Distribution in Specie
	If the Company declares a distribution in specie other than an issue of Shares in lieu of a cash dividend falling under Condition 6(c)(v) (a “Specie Distribution”) to shareholders at any time during the period in which the Bondholder can exercise its Conversion Rights, the Bondholder will, unless an adjustment to the Conversion Price has been made under Condition 6 in respect of the Specie Distribution in full, be entitled to an amount (the “Specie Distribution Right”) which shall be determined as follows:-

(a)

the Company and the Bondholder will forthwith on the date of announcement of the Specie Distribution instruct an approved merchant bank to value the Specie Distribution which would have been payable to the Bondholder on the Shares falling to be issued if the Bondholder had exercised its Conversion Rights immediately prior to the record date for the Specie Distribution in respect of the whole of the principal amount of the Bond then outstanding (the “Notional Specie Distribution”); and

(b)

upon the determination of an approved merchant bank’s valuation of the Notional Specie Distribution (which valuation shall be final and binding on both the Company and the Bondholder) the Company will pay a cash amount equal to the value of the Notional Specie Distribution to the Bondholder.

8.	Payments
8.1	Payment of the interest and principal in respect of the Bond shall be made on the due date into such bank account in Hong Kong as the Bondholder may notify the Company in writing from time to time, details of which appear on the register of

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	bondholders at the close of business on two trading days before the due date for payment. All payments by the Company shall be made in Hong Kong dollars.
8.2	If the due date for payment of any amount in respect of the Bond is not a trading day, the Bondholder will be entitled to payment on the next following trading day in the same manner together with interest accrued in respect of any such delay.
8.3	All payments by the Company shall be made to Bondholders without set-off, counterclaim, withholding or condition of any kind.
9.	Redemption
	Unless previously redeemed or converted in accordance with these Conditions, the Bond will be redeemed by the Company at its principal amount together with accrued interest thereon on the fifth anniversary of the date of issue of the Bond.
10.	Undertakings
	So long as the Bond is outstanding and to the extent permitted by applicable law, unless with the prior written approval of the Bondholders:-

(a)	the Company shall keep available for issue, free from pre-emptive rights, out of its authorised but unissued capital sufficient Shares to satisfy in full the Conversion Rights at the Conversion Price from time to time and all other rights for the time being outstanding of subscription for and conversion into Shares;
(b)	the Company shall not in any way modify the rights attached to the Shares as a class or attach any special restrictions thereto;
(c)	the Company shall not issue or pay up any securities by way of capitalisation of profits or reserves other than (i) by the issue of fully paid Shares to holders of its Shares; or (ii) as mentioned in Condition 6(c)(iii); or (iii) by the issue of Shares in lieu of a cash dividend in the manner referred to in Condition 6(c)(iv) ;
(d)	the Company shall not create or permit to be in issue any Equity Share Capital (as defined below) other than Shares, provided that nothing in this Condition 10(d) shall prevent (i) any consolidation or sub-division of the Shares; or (ii) the issue of Equity Share Capital which does not participate in dividend before a certain date or in respect of a certain financial period but is pari passu in all other respects with the Shares; or (iii) the issue of Equity Share Capital to officers or employees of the Company or any of its subsidiaries pursuant to an employee or executive share scheme;
(e)	the Company shall procure that (i) no securities issued by the Company shall be converted into Shares or exchanged for Shares except in

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	accordance with the terms of issue thereof, (ii) no securities issued by the Company without rights to convert into Shares or to be exchanged for Shares shall subsequently be granted such rights and (iii) at no time shall there be in issue Shares of differing nominal values;
(f)	the Company shall not make any issue, grant or distribution or take any other action if the effect thereof would be that on the exercise of the Conversion Rights it would but for Condition 6(i) be required to issue Shares at a discount to their nominal value;
(g)	if an offer is made to the holders of Shares (or such holders other than the offeror and/or any company controlled by the offeror and/or persons acting in concert with the offeror) to acquire all or a proportion of the Shares, the Company shall forthwith give notice of such offer to the Bondholder(s) and use all its best endeavours to procure that a similar offer is extended in respect of the Bond(s) or in respect of any Shares issued on conversion of the Bond(s) during the period of the offer;
(h)	the Company shall not make any distribution in specie to holders of Shares unless the Bondholder is entitled to the Specie Distribution Right in accordance with Condition 7;
(i)	the Company shall not, subject as hereinafter provided, make any reduction or redemption of share capital, share premium account or capital redemption reserve involving the repayment of money to shareholders (other than to shareholders having the right on a winding-up to a return of capital in priority to the holders of Shares) or reduce any uncalled liability in respect thereof unless, in any such case, the same gives rise (or would, but for the provisions of Conditions 6(e) or 6(g) give rise) to an adjustment of the Conversion Price in accordance with Condition 6;
(j)	the Company shall use its best endeavours (a) to maintain a listing for all the issued Shares on the Stock Exchange or on such other equivalent internationally recognised stock exchange (a “recognised stock exchange”) as the Company may from time to time determine (b) to obtain and maintain a listing on the Stock Exchange (or a recognised stock exchange) for all the Shares issued on the exercise of the Conversion Rights attaching to the Bond and (c) to obtain a listing for all the Shares issued on the exercise of the Conversion Rights attaching to the Bond on any other stock exchange on which any of the Shares are for the time being listed and will forthwith give notice to the holder of the Bond in accordance with Condition 17 of the listing or delisting of the Shares by any such stock exchange;
(k)	as soon as possible and in any event not later than 3 days after the announcement of the terms of any issue referred to in Condition 6 give notice to the Bondholder advising it of the date on which the relevant

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	adjustment of the Conversion Price is likely to become effective and of the effect of exercising their Conversion Rights pending such date;
(l)	the Company shall comply with and procure the compliance of all conditions imposed by the Stock Exchange or by any other competent authority (in Hong Kong or elsewhere) for approval of the issue of the Bond or for the listing of and permission to deal in the Shares issued or to be issued on the exercise of the Conversion Rights and to ensure the continued compliance thereof;
(m)	the Company shall not make any disposal of its assets which would constitute a major transaction for the purpose of Chapter 14 of the Rules Governing the Listing of Securities on the Stock Exchange (and any amendment thereto);
(n)	the Company shall not issue Shares for the acquisition of any asset at a total Effective Consideration per Share which is less than 95 per cent. of the market price at the date of the announcement of the terms of such issue, and for the purpose of this Condition 10(n) “total Effective Consideration” shall be the aggregate consideration credited as being paid for such Shares by the Company on acquisition of the relevant asset without any deduction of any commissions, discounts or expenses paid, allowed or incurred in connection with the issue thereof, and the “total Effective Consideration per Share” shall be the total Effective Consideration divided by the number of Shares issued as aforesaid;
(o)	The Company shall ensure that all Shares issued upon conversion of the Bond will be duly and validly issued fully paid and registered;
(p)	The Company shall, within a reasonable time upon a request by the Bondholder, provide to the Bondholder such published financial and other published information relating to the Company, its businesses and operations as the Bondholder may reasonably specify or require from to time to time; and
(q)	The Company shall not enter into any deed, agreement, assignment, instrument or documents whatsoever which may result in any breach of the terms of the Bond.

For the purpose of this Condition 10,

(i)	“Conversion Rights” means the rights attached to the Bond to convert the same or a part thereof into Conversion Shares; and
(ii)	“Equity Share Capital” means the issued share capital of the Company excluding any part thereof which does not either as respects dividends or as respects capital carry any right to participate beyond a specified amount or beyond an amount calculated by reference to a specified rate in a distribution.

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11.	Events of Default
	If any of the following events occurs, the Bondholder may give notice to the Company that the Bond is, and it shall on the giving of such notice immediately become, due and payable at its principal amount together with any accrued interest calculated up to and including the date of repayment :-

(a)	the Company fails to pay the principal when due or the Company fails to pay interest on the Bond when due unless non-payment of such interest is due solely to administrative or technical error and payment is made within 5 trading days of the due date thereof; or
(b)	the Company defaults in performance or observance or compliance with any of its other obligations set out herein which default is incapable of remedy or, if capable of remedy, is not in the reasonable opinion of the Bondholder remedied within 10 trading days after notice of such default shall have been given to the Company by such Bondholder; or
(c)	(i) any bank borrowings of the Company or its subsidiaries are not paid when due, or as the case may be, within any applicable grace period; or

(ii) the Company or its subsidiaries fails to pay when due or expressed to be due any amounts payable or expressed to be payable by it under any present or future guarantee for any moneys borrowed from or raised through a financial institution; or

(d)	an encumbrancer takes possession or a receiver, manager or other similar officer is appointed of the whole or any part of the undertaking, property, assets or revenues of the Company or its subsidiaries; or
(e)	the Company or its subsidiaries becomes insolvent or is unable to pay its debts as they mature or applies for or consents to or suffers the appointment of any administrator, liquidator or receiver of the Company or its subsidiaries or the whole or any part of the undertaking, property, assets or revenues of the Company or its subsidiaries or takes any proceeding under any law for a readjustment or deferment of its obligations or any part of them or makes or enters into a general assignment or compromise with or for the benefit of its creditors; or
(f)	an order is made or an effective resolution passed for winding-up of the Company or any of its subsidiaries except in the case of winding-up of subsidiaries in the course of internal reorganisation; or

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(g)	a moratorium is agreed or declared in respect of any indebtedness of the Company or any of its subsidiaries or any governmental authority or agency condemns, seizes, compulsorily purchases or expropriates all or a substantial part of the assets of the Company or any of its subsidiaries; or
(h)	the Shares (as a class) cease to be listed on the Stock Exchange or a recognised stock exchange for a continuous period of 15 trading days due to the default of the Company.

The Company will forthwith on becoming aware of any such event as is mentioned in this Condition give notice in writing thereof to the Bondholder. At any time after the Bond has become payable the Bondholder may without further notice institute such proceedings as it may think fit to enforce payment of the monies due.

12.	Taxation
	All payments of principal, premium and interest by the Company will be made without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature unless such deduction or withholding is required by law. In such event, the Company will pay such additional amounts as will result in receipt by the Bondholders of the net amounts after such deduction or withholding equal to the amounts which would otherwise have been receivable by them had no such deduction or withholding been required.
13.	Voting
	A Bondholder will not be entitled to attend or vote at any meetings of the Company by reason only of it being a Bondholder and will not be entitled to receive notice of the same.
14.	Experts
	In giving any certificate or making any adjustment hereunder, the approved merchant bank shall be deemed to be acting as experts and not as arbitrators and, in the absence of manifest error, their decision shall be conclusive and binding on the Company and the Bondholder and all persons claiming through or under them respectively.
15.	Register
	The Company shall maintain a register in Hong Kong of the particulars of the Bond(s) and the Bondholder(s).
16.	Replacement Bonds
	If the Certificate is lost or mutilated the Bondholder shall forthwith notify the

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	Company and a replacement Certificate shall be issued if the Bondholder provides the Company with: (i) the mutilated Certificate; (ii) a declaration by the Bondholder or its officer that the Certificate has been lost or mutilated (as the case may be) or other evidence that the Certificate has been lost or mutilated; and (iii) an appropriate indemnity in such form and content as the Company may reasonably require. Any Certificate replaced in accordance with this Condition shall forthwith be cancelled.
17.	Notices
	Each notice, demand or other communication to be given or made under these Conditions shall be in writing and delivered or sent to the relevant party at its respective address or facsimile number set out below (or such other address or facsimile number as the addressee has by five days’ prior written notice specified to the other party):
	To the Company:

Address:	Suites 1506-1508, 15/F, One Exchange Square, 8 Connaught Place, Hong Kong
Facsimile:	(852) 2263 1223
Attention:	The Company Secretary
To the Bondholder:
Address:	Unit C, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao
cc:	Suites 1506-1508, 15/F, One Exchange Square, 8 Connaught Place, Hong Kong
Facsimile:	(853) 2835 6262
Attention:	The Corporate Secretary

(or in the case of any permitted assigns, such address and facsimile numbers as the addressee has by five days’ prior written notice specified to the Company)

Any notice, demand or other communication so addressed to the relevant party shall be deemed to have been delivered: (a) if given or made by letter, when actually delivered to the relevant address; and (b) if given or made by facsimile, when despatched with confirmation of successful transmission.

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18.	Governing Law and Jurisdiction
	The Bonds and the Conditions are governed by and shall be construed in accordance with Hong Kong law and the Company agrees to submit to the non-exclusive jurisdiction of the courts of Hong Kong.

Date:

NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

By :

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SCHEDULE 10

Restricted Actions Pending Completion

The Vendor shall ensure that none of Jetup and the Zastron Group shall do nor agree (conditionally or unconditionally) to do any of the following (save with the consent of the Purchaser):

1.	dispose of, or grant any option or right of pre-emption in respect of, or acquire, any fixed asset of Jetup or any member of the Zastron Group with a net book value in excess of HK$200,000;
2.	enter into any transaction, agreement, contract or commitment or acquire or dispose of any interest in any asset (except in the ordinary course of business as carried on at the date of this Agreement) or assume or incur, or agree to assume or incur, a liability, obligation or expense (actual or contingent) except in the ordinary course of business;
3.	enter into any joint venture, partnership or profit sharing agreements;
4.	create, extend, grant or issue any mortgage, charge, debenture, pledge, lien, encumbrance or other security or third party right (other than liens arising in the ordinary course of business) over any of the assets or the undertaking of Jetup or any member of the Zastron Group;
5.	create, extend or grant any guarantee, indemnity, performance bond or other security or contingent obligation in the nature of a financial obligation including letters of comfort or support, save in each case in respect of letters of credit and similar instruments, utility guarantees and otherwise in the ordinary course of business;
6.	create, allot or issue any shares, loan capital, securities convertible into shares or any option or right to subscribe in respect of any shares, loan capital or securities convertible into shares;
7.	declare, pay or make any dividend or distribution (other than a distribution out of the retained earnings of the Zastron Group not exceeding HK$300,000,000);
8.	incur any liability in the nature of a borrowing (other than by bank overdraft or other short term facility (including for the issuance of letters of credit and similar instruments) in the ordinary course of business within limits established by the relevant bank at the date of this Agreement);
9.	make or agree to make or approve any capital commitment or approve any capital expenditure in excess of HK$200,000;
10.	allow any of its insurances to lapse or do anything to make any policy of insurance void or voidable or would or would be likely to, increase any premium payable in

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	respect of such policy or prejudice the ability to effect equivalent insurance in the future;
11.	alter the provisions of its Memorandum or Articles of Association or other constitutional documents or adopt or pass regulations or resolutions inconsistent with them;
12.	reduce the share capital of Jetup or any member of the Zastron Group;
13.	engage or dismiss other than for just cause any employee who is crucial to the operation of Jetup or any member of the Zastron Group or make any material variation to the terms and conditions of employment of any employee (other than indexation increases in salary in the ordinary course of business) or provide or agree to provide any gratuitous payment or benefit to any employee or any of their dependants;
14.	enter into, amend, terminate or dispose of any tenancy or lease agreement in respect of any property or acquire or dispose of any interest in any property;
15.	appoint any directors or secretaries;
16.	start any civil, criminal, arbitration or other proceedings;
17.	other than in the ordinary course of its business, not to settle, compromise, release, discharge or compound any civil, criminal, arbitration or other proceedings or any liability, claim, action, demand or dispute or waive any right in respect of the foregoing;
18.	pass any resolution in general meeting (other than any resolution constituting ordinary business conducted at an annual general meeting);
19.	make or issue any return or correspondence in connection with Taxation unless for the purpose of complying with the relevant regulatory requirements;
20.	change the accounting reference date of Jetup or any member of the Zastron Group; or
21.	make any change to the accounting procedures or principles by reference to which its accounts are drawn up.

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IN WITNESS whereof this Agreement has been entered into the day and year first above written.

SIGNED by	)
	)	/s/ Koo Ming Kown
for and on behalf of	)
NAM TAI ELECTRONICS, INC.	)	/s/ John Q. Farina
in the presence of:- /s/ [signature illegible])
SIGNED by	)
	)	/s/ Wong Kuen Ling
for and on behalf of	)
NAM TAI ELECTRONIC AND	)
ELECTRICAL PRODUCTS LIMITED	)
in the presence of:-/s/ [signature illegible]	)

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EX-4.33

- 1 -

Exhibit 4.33

THIS SUPPLEMENTAL AGREEMENT is made the 5th day of October 2007

BETWEEN

(1)	J.I.C. TECHNOLOGY COMPANY LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Vendor”); and
(2)	NAM TAI ELECTRONICS, INC., a company incorporated in the British Virgin Islands whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Purchaser”).

WHEREAS:-

(A)	The Vendor and the Purchaser entered into an agreement (the “Jetup Acquisition Agreement”) on 24 September 2007 whereby the Vendor agreed to sell and the Purchaser agreed to purchase 91% interest in Jetup Electronic (Shenzhen) Co., Ltd. legally and beneficially owned by the Vendor subject to and upon the terms and conditions of the Jetup Acquisition Agreement.
(B)	The parties now wish to enter into this Agreement to add one additional condition precedent to the acquisition of the Sale Interest pursuant to the Jetup Acquisition Agreement.

NOW IT IS AGREED as follows:-

1.	INTERPRETATION
1.01	This Supplemental Agreement shall supplement and be read in conjunction with the Jetup Acquisition Agreement; however where any provision in this Supplemental Agreement is inconsistent with any provision in the Jetup Acquisition Agreement, this Supplemental Agreement shall prevail.
1.02	In this Supplemental Agreement, unless the context otherwise requires:-

(a)	definitions shall have the same meaning as provided for in the Jetup Acquisition Agreement; and
(b)	any reference to a Clause or to Appendix or to a Recital is a reference respectively to a clause, appendix or recital of this Supplemental Agreement.
(c)	the “Namtek Acquisition Agreement” shall mean an agreement of even date entered into between the Vendor and NTEEP whereby NTEEP agreed to sell and the Vendor agreed to purchase the entire interest in (i) Kabushiki Kaisha Namtek Japan; and (ii) Shenzhen Namtek Co., Ltd., subject to and upon the terms and conditons of the Namtek Acquisition Agreement.

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2.	ADDITIONAL CONDITION
	In addition to the Conditions under Clause 3.01 of the Jetup Acquisition Agreement, the Completion shall be conditional upon completion of the Namtek Acquisition Agreement becoming unconditional in all respects (save in respect of any condition relating to completion of the Jetup Acquisition Agreement as supplemented and amended by this Supplemental Agreement).

IN WITNESS whereof this Agreement has been entered into the day and year first above written.

SIGNED by	)
	)	/s/ [signature illegible]
for and on behalf of	)
J.I.C. TECHNOLOGY COMPANY	)
LIMITED	)
in the presence of: /s/ [signature illegible]

SIGNED by	)
	)	/s/ Koo Ming Kown
for and on behalf of	)
NAM TAI ELECTRONICS, INC.	)
in the presence of: /s/ [signature illegible]	)

EX-4.34

Exhibit 4.34

DATED OCTOBER 5, 2007

NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

and

J.I.C. TECHNOLOGY COMPANY LIMITED

AGREEMENT

relating to the sale and purchase of the entire interest in
(1) Kabushiki Kaisha Namtek Japan; and

(2) Shenzhen Namtek Co., Ltd.

INDEX

Clause		Page
1.	Interpretation		1
2.	Sale and Purchase		5
3.	Conditions		5
4.	Completion		6
5.	Warranties		7
6.	Conduct of Business Pending Completion		9
7.	Costs		10
8.	Further Assurance		10
9.	Miscellaneous		10
10.	Notices		11
11.	Time of the Essence		11
12.	Governing Law		11
13.	Process Agents		11

Schedules
Schedule 1	Details of the Target Companies
	Part 1 - Namtek (Japan)	12
	Part 2 - Namtek (Shenzhen)	13
Schedule 2	Tenancies
	Part 1 - Namtek (Japan)	14
	Part 2 - Namtek (Shenzhen)	14
Schedule 3	Warranties	15
Schedule 4	Restricted Actions Pending Completion	25
Execution Clause		27

THIS AGREEMENT is dated October 5, 2007 and is made

BETWEEN :-

(1)	NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Vendor”); and
(2)	J.I.C. TECHNOLOGY COMPANY LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Purchaser”).

NOW IT IS HEREBY AGREED as follows:-

1.	INTERPRETATION
1.01	In this Agreement unless the context otherwise requires:-

(a) the following expressions shall have the following meanings:

Expression	Meaning
“Accounts”	the audited financial statements of each of the Target Companies in respect of each of the three financial years ended on 31 December 2006 and of the six months ended on 30 June 2007
“Accounts Date”	30 June 2007
“Business Day”	means a day other than a Saturday or Sunday, on which banks are open in Hong Kong to the general public for business
“Companies Ordinance”	the Companies Ordinance (Chapter 32, as amended from time to time, of the Laws of Hong Kong)
“Completion”	completion of the sale and purchase of the Sale Interests in accordance with the terms and conditions of this Agreement
“Completion Date”	the date on which Completion occurs
“Conditions”	the conditions set out in Clause 3.01
“Consideration”	HK$80,500,000

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“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China
“Intellectual Property”	(a)	patents, trade marks, service marks, registered designs, applications for any of those rights, trade and business names (including internet domain names and e-mail address names), unregistered trade marks and service marks, copyrights, database rights, know-how, rights in designs and inventions;
	(b)	rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); and
	(c)	rights of the same or similar effect or nature as or to those in paragraphs (a) and (b),
		in each case in any part of the world
“Jetup Agreement”	an agreement dated 24 September 2007 made between the Purchaser (as vendor) and Nam Tai Electronics., Inc. (as purchaser) relating to the sale and purchase of 91% interest in Jetup Electronic (Shenzhen) Co., Ltd. as supplemented and amended by a supplemental agreement of 5th October 2007 made between the same parties
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“Namtek (Japan)”	Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Company Limited), a company incorporated in Japan and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Part 1 of Schedule 1
“Namtek (Japan) Sale Interest”	the entire interest in Namtek (Japan) legally and beneficially owned by the Vendor
“Namtek (Japan) Tenancies”	the tenancies and sub-tenancies where Namtek (Japan) is the lessor or the lessee, particulars of

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	which are set out in Part 1 of Schedule 2
“Namtek (Shenzhen)”	Shenzhen Namtek Co., Ltd., a company incorporated in the PRC and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Part 2 of Schedule 1
“Namtek (Shenzhen) Sale Interest”	the entire interest in Namtek (Shenzhen) legally and beneficially owned by the Vendor
“Namtek (Shenzhen) Tenancies”	the tenancies and sub-tenancies where Namtek (Shenzhen) is the lessor or the lessee, particulars of which are set out in Part 2 of Schedule 2
“PRC”	the People’s Republic of China and, for the purposes of this Agreement, excluding Hong Kong, Macau and Taiwan
“Sale Interests”	the Namtek (Japan) Sale Interest and Namtek (Shenzhen) Sale Interest
“Stamp Duty Ordinance”	the Stamp Duty Ordinance (Chapter 117, as amended from time to time, of the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target Companies”	Namtek (Japan) and Namtek (Shenzhen)
“Taxation”	(i) any liability to any form of taxation whenever created or imposed and whether of Japan, the PRC or of any other part of the world and without prejudice to the generality of the foregoing includes profits tax, provisional profits tax, interest tax, salaries tax, property tax, estate duty, death duty, capital duty, stamp duty, payroll tax, withholding tax, rates, customs and excise duties and generally any tax, duty, impost, levy or rate or any amount payable to the revenue, customs or fiscal authorities whether of Japan, the PRC or of any other part of the world;
	(ii) such an amount or amounts as is referred to in sub-clause (i) above; and

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	(iii) all costs, interest, penalties, charges, fines and expenses incidental or relating to the liability to taxation or the loss, reduction, modification, cancellation or deprivation of relief or of a right to repayment of the taxation
“Warranties”	the representations, warranties and undertakings set out in Schedule 3
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“JPY”	Japanese yen, the lawful currency of Japan
“RMB”	Renminbi, the lawful currency of the PRC
“US$”	the United States dollars, the lawful currency of the United States of America

(b)	words and expressions defined in the Companies Ordinance shall bear the same respective meanings herein;
(c)	reference to any statute or statutory provision shall include any statute or statutory provision which amends or replaces, or has amended or replaced, it shall include any subordinate legislation made under the relevant statute;
(d)	a body corporate shall be deemed to be associated with another body corporate if it is a holding company or a subsidiary of that other body corporate or a subsidiary of a holding company of that body corporate;
(e)	references to Clauses and sub-clauses and Schedules are to Clauses and sub-clauses of and Schedules to this Agreement;
(f)	references to writing shall include typewriting, printing, lithography, photography, telecopier, telex and electronic messages and any mode of reproducing words in a legible and non-transitory form;
(g)	words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporate.

1.02 Headings are for convenience only and shall not affect the construction of this Agreement.

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1.03 In construing this Agreement:-

(a)	the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
(b)	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

1.04	The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Schedules.
2.	SALE AND PURCHASE
2.01	On the terms set out in this Agreement, the Vendor as beneficial owner shall sell the Sale Interests to the Purchaser free from all liens, charges, encumbrances, equities and adverse interests and with all rights attached or accruing thereto at the date hereof (including the right to receive all dividends and other distributions declared, made or paid on or after the date hereof) and the Purchaser relying on the representations, warranties, undertakings and indemnities of the Vendor contained or referred to herein shall purchase the Sale Interests at Completion.
2.02	The consideration for the sale of the Namtek (Japan) Sale Interest and the Namtek (Shenzhen) Sale Interest is the sum of HK$80,500,000 payable by the Purchaser to the Vendor in cash.
3.	CONDITIONS
3.01	Completion is conditional upon the following conditions being satisfied on or before 31 December 2007 (the “Longstop Date”):

(a)

the obtaining in terms acceptable to the Purchaser, of all consents, approvals, clearances and authorisations of any relevant governmental authorities or other relevant third parties in Japan, the PRC or any other part of the world as may be necessary for the execution and implementation of this Agreement;

(b)

the Target Companies receiving all relevant consents and approvals from third parties as may be necessary in connection with the proposed change in shareholding of the Target Companies so as to ensure that the Target Companies maintains all its existing contractual and other rights following the transfer of the Sale Interests (including, without limitation, the consent of the existing bankers of the Target Companies to continue to provide the existing banking facilities to the Target Companies following the transfer of the Sale Interests);

- 5 -

(c)	the passing at an extraordinary general meeting of the Vendor of ordinary resolution(s) approving this Agreement and the transactions contemplated by this Agreement by the shareholders of the Vendor (excluding such shareholders who shall be required to abstain from voting under the Listing Rules);
(d)	the passing at an extraordinary general meeting of the Purchaser of ordinary resolution(s) approving this Agreement and the transactions contemplated by this Agreement by the shareholders of the Purchaser (excluding such shareholders who shall be required to abstain from voting under the Listing Rules); and
(e)	completion of the Jetup Agreement becoming unconditional in all respects (save in respect of any condition relating to completion of this Agreement).

3.02	The Vendor will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Purchaser when each of the said Conditions have been satisfied.
3.03(a)	If at any time the Vendor becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it will immediately inform the Purchaser.

(b) If at any time the Purchaser becomes aware of a fact or circumstance that might prevent a condition being satisfied, it will immediately inform the Vendor.

3.04 If any of the Conditions have not been satisfied on or before the Longstop Date then this Agreement will immediately terminate and all rights and obligations of the parties shall cease immediately upon termination.

4	COMPLETION
4.01	Completion of the sale and purchase of the Sale Interests shall take place on the fifth Business Day following satisfaction or waiver of the Conditions, or such other date as the Vendor and the Purchaser may agree in writing at Unit A, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao when all (but not part only) of the following business shall be transacted:-

(a) the Vendor shall give a copy of such documents and take such actions as have been required (including but not limited to the obtaining of all approvals of the relevant governmental authorities in Japan and the PRC) to give a good title to the Sale Interests and to enable the Purchaser to be registered as the holder thereof;

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(b)	the Vendor shall deliver to or to the order of the Purchaser evidence satisfactory to the Purchaser that a good title to the Sale Interests has been passed to the Purchaser and the Purchaser has been registered as the holder thereof; and
(c)	the Purchaser shall pay the Consideration to the Vendor.

4.02	No party shall be obliged to complete this Agreement or perform any obligations under Clause 4.01 unless the other party demonstrates that it is able to comply fully with the requirements of Clause 4.01 simultaneously.
5	WARRANTIES
5.01	The Vendor hereby:-

(a)

represents, warrants and undertakes to the Purchaser that each of the Warranties set out in Schedule 3 is true and accurate in all respects and is not misleading and accept that the Purchaser is entering into this Agreement in reliance upon each of the Warranties notwithstanding any investigations which the Purchaser or any of its directors, officers, employees, agents or advisors may have made and notwithstanding any information regarding the Target Companies which may otherwise have come into the possession of any of the foregoing;

(b)

undertakes to indemnify the Purchaser against all claims, liabilities, losses, costs and expenses the Purchaser may suffer or incur or which may be made against the Purchaser either before or after the commencement of and arising out of, or in respect of, any action in connection with :-

(i)	the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;
(ii)	any legal proceedings in which the Purchaser claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for the Purchaser; or
(iii)	the enforcement of any such settlement or judgment.

5.02 Without prejudice to any other rights and remedies available at any time to the Purchaser (including but not limited to any right to damages for any loss suffered by the Purchaser), the Purchaser may (if the effect of any breach of any Warranty is that any of the Target Companies, or any of its assets, is worth less than its value would have been if there had been no such breach or that any of the Target Companies is or will be under a liability or an increased or substituted liability which would not have

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subsisted if there had been no such breach) by notice to the Vendor require it to make good to the relevant company the diminution in the value of the asset or all loss occasioned by such liability or increased or substituted liability by a payment in cash to the relevant company or to pay to the Purchaser an amount equal to the diminution thereby caused in the value of the Sale Interests. If any such payment gives rise to a liability to Taxation on the part of the relevant company or the Purchaser as the recipient thereof, such payment shall be increased by such an amount as shall ensure that, after payment of such Taxation, the recipient shall have received an amount equal to the payment otherwise required hereby to be paid.

5.03	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Agreement.
5.04	Any rights to which the Purchaser may be or become entitled by reason of any of the Warranties being untrue or misleading or breached and all remedies which may be available to the Purchaser in consequence of any of the Warranties being untrue or misleading or breached shall enure for the benefit of any associated company of the Purchaser which is the beneficial owner for the time being of any of the Sale Interests purchased by the Purchaser hereunder and accordingly any loss which is sustained by such beneficial owner for the time being of the Sale Interests in consequence of any of the Warranties being untrue or misleading or breached shall be deemed to be that of the Purchaser and the Purchaser may bring proceedings and exercise any other remedy on the footing that it has been the beneficial owner of the Sale Interests at all times from Completion.
5.05	The Vendor shall not be liable in respect of any breach of the Warranties after the earlier of (i) 31 August 2008; and (ii) Nam Tai Electronics, Inc. (“NTEI”) ceasing to be the controlling shareholder (as defined under the Listing Rules) of the Vendor, except in respect of those matters which have been the subject of a claim made hereunder or in respect of those circumstances which may give rise to a claim made hereunder and of which notice has been given to the Vendor on or prior to the earlier of (i) 31 August 2008; and (ii) NTEI ceasing to be the controlling shareholder of the Vendor.
5.06	The total liability of the Vendor under this Agreement shall not exceed HK$80,500,000.
5.07	The Vendor shall have no liability under this Agreement unless the aggregate amount of all valid claims which could otherwise be made under this Agreement shall exceed HK$500,000.

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5.08	The Vendor shall not be liable for breach of any Warranty to the extent that such liability arises by reason of any act or omission effected by the Purchaser or any of the Target Companies after Completion (other than action taken by the Purchaser or on its behalf in establishing that any of the Warranties being untrue or misleading or breached) or by reason of any retrospective change in the law coming into force after the date hereof or to the extent such liability arises or is increased by an increase in rates of taxation after the date hereof with retrospective effect.
5.09	The Vendor hereby undertakes that it will from time to time and at any time prior to the earlier of (i) 31 August 2008; and (ii) NTEI ceasing to be the controlling shareholder of the Vendor, forthwith disclose in writing to the Purchaser any event, fact or circumstance which may become known to them after the date hereof and which is materially inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of any of the Sale Interests or which may entitle the Purchaser to make any claim under this Agreement.
5.10	The Vendor shall not, and shall procure that none of the Target Companies shall, do or allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given.
5.11	It is hereby agreed between the parties hereto that no party will have the right to rescind this Agreement.
5.12	The Vendor shall not (in the event of any claim being made against the Vendor in connection with the sale of the Sale Interests to the Purchaser) make any claim against any of the Target Companies or against any director or employee of any of the Target Companies on whom the Vendor may have relied before agreeing to any term of this Agreement.
6.	CONDUCT OF BUSINESS PENDING COMPLETION
6.01	The Vendor will procure that none of the Target Companies shall (save with the consent of the Purchaser), prior to Completion (or the termination of this Agreement (whichever is earlier)):

(a)	do anything outside its ordinary course of business;
(b)	do anything which is not in accordance with its past practices; or
(c)	without prejudice of generality of Clauses 6.01(a) and 6.01(b), undertake any of the activities listed in Schedule 4.

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7. COSTS

7.01	Each party shall pay its own costs, stamp duty and capital duty in relation to the negotiations leading up to the sale and purchase of the Sale Interests and the preparation, execution and carrying into effect of this Agreement and the transactions contemplated or referred to herein.
8.	FURTHER ASSURANCE
8.01	Each of the parties hereto undertakes to the other party that it will do all such acts and things and execute all such deeds and documents as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Agreement and the transactions hereby contemplated.
9.	MISCELLANEOUS
9.01	Without prejudice to the provisions of this Agreement stipulating that certain acts, obligations and/or events are to be performed or shall take place on a particular date or dates, any provision of this Agreement which is capable of being performed after but which has not been performed at or before Completion and all warranties and indemnities and other undertakings contained in or entered into pursuant to this Agreement shall remain in full force and effect notwithstanding Completion.
9.02	This Agreement shall be binding on and enure for the benefit of the successors of each of the parties but shall not be assignable.
9.03	Any remedy conferred on any party hereto for breach of this Agreement (including the breach of any Warranty) shall be in addition and without prejudice to all other rights and remedies available to it and the exercise of or failure to exercise any remedy shall not constitute a waiver by such party of any of its rights or remedies.
9.04	This Agreement constitutes the whole agreement between the parties relating to the transactions hereby contemplated (no party having relied on any representation or warranty made by any other party which is not a term of this Agreement) and no future variation shall be effective unless made in writing and signed by each of the parties hereto.
9.05	This Agreement shall supersede all and any previous agreements or arrangements between the parties hereto or any of them relating to the Target Companies or to any other matter referred to in this Agreement and all or any such previous agreements or arrangements (if any) shall cease and determine with effect from the date hereof.
9.06	If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the remaining provisions hereof shall in no way be affected or impaired thereby.

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10.	NOTICES
10.01	Any notice required or permitted to be given by or under this Agreement may be given by delivering the same to the party in question by delivering it to such party in person or in the case of a body corporate by delivering it to its registered office for the time being or by sending it in a prepaid envelope by registered mail to the party concerned at its address shown in this Agreement or to such other address in Hong Kong as the party concerned may have notified to the others in accordance with this Clause and any such notice shall be deemed to be served when the same would first be received at the address of the party to whom it is addressed in the normal course of such method of delivery.
11.	TIME OF THE ESSENCE
11.01	Time shall be of the essence of this Agreement.
12.	GOVERNING LAW
12.01	This Agreement shall be governed by and construed in accordance with the laws of Hong Kong and each party hereby submits to the non-exclusive jurisdiction of the courts of Hong Kong as regards any claim or matter arising under this Agreement.
13.	PROCESS AGENTS
13.01	The Vendor hereby appoints its company secretary of Suites 1506-08, One Exchange Square, 8 Connaught Road, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Agreement and service on its company secretary (or such substitute) shall be deemed to be service on the Vendor.
13.02	The Purchaser hereby appoints its company secretary of Suites 1506-08, One Exchange Square, 8 Connaught Road, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Agreement and service on its company secretary (or such substitute) shall be deemed to be service on the Purchaser.

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SCHEDULE 1

Details of the Target Companies

Part 1 - Namtek (Japan)

Name	:	Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Co., Ltd.)
Date of incorporation	:	30 June 2003
Place of incorporation	:	Japan
Head office	:	Chuo-ku, Tokyo, Japan
Total number of shares which Namtek (Japan) is authorised to issue	:	500,000 shares
Total number of shares issued as at the date hereof	:	100,000 shares of JPY 100
Directors	:	Kazuhiro Asano Toshiaki Sunahara Koo Ming Kown Lei Lai Fong, Patinda Wong Kuen Ling, Karene
Accountant	:	Sakuma CPA
Financial year end	:	31 December

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Part 2 - Namtek (Shenzhen)

Chinese Name	:
English Name		Shenzhen Namtek Co., Ltd.
Date of incorporation	:	20 December 1995
Place of incorporation	:	PRC
Registered Office	:
Total Investment	:	US$1 million
Registered Capital	:	US$800,000
Paid Up Capital	:	US$800,000
Name of investor on the certificate of approval	:	the Vendor
Directors	:	Kazuhiro Asano
		Koo Ming Kown
		Liu Xue Qing
		Wong Kuen Ling, Karene
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

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SCHEDULE 2

Tenancies

Part 1 - Namtek (Japan) Tenancies

1. A lease under a lease agreement dated 30 June 2003 made between Sakura-Masamune Co., Ltd. (as lessor) and Kabushiki Kaisha Namtek Japan (as lessee), certain particulars of which are set out below:

Property :	Sakura-Masamune Higashi Nihonbashi Building, 3-12-12
	Higashi-Nihonbashi, Chuo-Ku, Tokyo, Japan
Term:	commencing on 1 July 2007 and ending on 30 June 2009
Rent:	JPY 203,360 per month

Part 2 — Namtek (Shenzhen) Tenancies

2. A lease under a lease contract signed by (as lessor) and  Shenzhen Namtek Co., Ltd.(as lessee) on 8 August 2007, certain particulars of which are set out below:

Property :	the whole floor of C12
Term:	commencing on 20 July 2007 and ending on 19 July 2008
Rent:	RMB 70,150 per month

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SCHEDULE 3

The Namtek (Japan) and the Namtek (Shenzhen) Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of the Target Companies that all the information contained in Schedules 1 and 2 is correct and:-

1.	The Sale Interests
(A)	The Vendor is the beneficial owner of the Sale Interests with full authority to sell and transfer the full legal and beneficial ownership of the Sale Interests registered in its name to the Purchaser.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Sale Interests or any part of the unissued share capital of any of the Target Companies and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Sale Interests are fully paid up and rank pari passu in all respects with the existing issued shares of each of the Target Companies.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in any of the Target Companies.
2.	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of the Target Companies produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of the Target Companies have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of the Target Companies.
3.	Compliance with legal requirements

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(A)	Each of the Target Companies is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with each of the Target Companies concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the appropriate legislation to be filed with the appropriate regulatory bodies in Japan, the PRC or elsewhere where the Target Companies operate (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions, and (e) directors and other officers.
(C)	There has been no material breach by any of the Target Companies or any of their respective officers (in his capacity as such) of any legislation or regulations affecting them or their businesses.
4.	Accounts, bank accounts and borrowings
(A)	The Accounts show a true and fair view of the results of each of the Target Companies for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of the Target Companies as at such date, in each case on the basis stated therein.
(B)	The Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of the Target Companies were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by the Target Companies;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;
(iv)	give a true and fair view of the state of affairs and financial position of the Target Companies at the Accounts Date and of the results of the Target Companies for the financial period covered by the Accounts and the management financial information therein fairly represent the state of

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affairs and financial position of the Target Companies for the period covered by the Accounts;

(v) (including the management financial information therein) are not affected by any unusual or non-recurring items which are not disclosed in the Accounts.

(C)	None of the Target Companies has any outstanding liability for Taxation of any kind which has not been provided for in the Accounts.
(D)	None of the Target Companies has any outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital (other than in the ordinary course of business) which has not been adequately disclosed or provided for in the Accounts.
(E)	Each of the Target Companies owns free from encumbrance all its undertaking and assets shown or comprised in the Accounts and all such assets are in its possession or under its control.
(F)	None of the Target Companies holds any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which any of the Target Companies is a party:-

(i)	there has been no contravention of or non-compliance with any provision or term of any of the arrangements;
(ii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iii)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(iv)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(v)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party, except the existing guarantees provided by the Vendor (if any).

(H) The total amount borrowed by each of the Target Companies :-

(i) from its bankers does not exceed its financial facilities; and

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(ii) from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

(I)	Having regard to the existing facilities available to the Target Companies, each of the Target Companies has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Accounts, none of the Target Companies have declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of the Target Companies and each of the Target Companies has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of the Target Companies in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	none of the Target Companies have declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of each of the Target Companies has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of each of the Target Companies has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by any of the Target Companies;
(vii)	no asset of the Target Companies has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by any of the Target Companies, and no contract involving expenditure by it of a capital nature has been entered into by any of the Target Companies, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of

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which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interests;

(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) by any of the Target Companies in circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;
(ix)	no event has occurred which gives rise to any liability for Taxation to any of the Target Companies on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to the Target Companies.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to each of the Target Companies :-

(i)	any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);
(ii)	any agreements or arrangements to which any of the Target Companies is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses (save and except for the existing incentive bonus share already disclosed to Purchaser);
(iii)	save and except for the compliance with the applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which any of the Target Companies is under any actual or contingent liability in respect of :-

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(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

(v)	any contract to which any of the Target Companies is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interests;
(vi)	any agreement entered into by any of the Target Companies otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between any of the Target Companies and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to its operation which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Sale Interests or of compliance with any other provision of this Agreement; and
(viii)	any contract which materially restricts its freedom to carry on the business now carried on by it in any part of the world.

(B)	None of the Target Companies nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which any of the Target Companies is a party or any approval or franchise granted by any governmental or regulatory bodies to any of the Target Companies and which is material to the operation of any of the Target Companies.
(C)	No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of the Target Companies.
(D)	None of the Target Companies is under any obligation, nor is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	None of the Target Companies is a party to nor has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	None of the Target Companies is a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its

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freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.

(G)	None of the Target Companies has any outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.
(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, none of the Target Companies has given any guarantee or warranty, nor made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.
7.	Insurance
(A)	Each of the Target Companies has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against any of the Target Companies by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	None of the Target Companies nor the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle any Company to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against any of the Target Companies is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of any of the Target Companies in respect of any act or default for which any of the Target Companies might be vicariously liable.

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9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of the Target Companies.
(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of any of the Target Companies.
(C)	None of the Target Companies has stopped payment nor is insolvent or unable to pay its debts.
(D)	No material unsatisfied judgment is outstanding against any of the Target Companies.
(E)	No event analogous to any of the foregoing has occurred in or outside PRC in respect of the Target Companies.
10.	Delinquent acts
	None of the Target Companies has committed nor is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. None of the Target Companies has received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of the Target Companies.
11.	Tax returns
(A)	Each of the Target Companies has, in respect of all years of assessment since incorporation or establishment falling before the date of this Agreement, made or caused to be made all proper returns, and has supplied or caused to be supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere if applicable) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from the Target Companies or regarding the availability to the Target Companies of any relief from Taxation or duty.
(B)	Each of the Target Companies has sufficient records relating to past events during the six years prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	Each of the Target Companies has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Accounts.

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12.	Stamp and other duties
	Each of the Target Companies has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by the Target Companies under any such Ordinance, legislation or regulations.
13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against any of the Target Companies exceeding the amount of HK$500,000.
(B)	Full provision has been made in the Accounts for all and any compensation or severance payment for which any of the Target Companies is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.
(C)	Save and except for compliance with the relevant statutory requirements, none of the Target Companies is paying, nor is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.
(D)	None of the Target Companies has any outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.
(E)	No employee of any of the Target Companies who is crucial to the operation of Target Companies has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	None of the Target Companies has given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	Each of the Target Companies has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.

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16.	Interests in companies, partnerships or joint ventures
(A)	None of the Target Companies has any interest in the share capital of any company or in any partnership or joint venture.
(B)	None of the Target Companies has acted or carried on business in partnership with other person(s) or is a member of any corporate or unincorporated body, undertaking or associate.
17.	Tenancies
(A)	The Tenancies are all good, valid and subsisting and have in no way become void or voidable.
(B)	All covenants, obligations, conditions and restrictions imposed upon each of the Target Companies under the Tenancies have been duly and promptly observed and performed.
(C)	The agreements for the Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time.
(D)	No Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Agreement.
18.	Intellectual property rights
(A)	To the best of the each of the Target Companies’ knowledge and belief, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Agreement by the Target Companies do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property or another person.
(B)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to the Target Companies in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

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SCHEDULE 4

Restricted Actions Pending Completion

The Vendor shall ensure that none of the Target Companies shall do nor agree (conditionally or unconditionally) to do any of the following (save with the consent of the Purchaser):

1.	dispose of, or grant any option or right of pre-emption in respect of, or acquire, any fixed asset of any of the Target Companies with a net book value in excess of HK$200,000;
2.	enter into any transaction, agreement, contract or commitment or acquire or dispose of any interest in any asset (except in the ordinary course of business as carried on at the date of this Agreement) or assume or incur, or agree to assume or incur, a liability, obligation or expense (actual or contingent) except in the ordinary course of business;
3.	enter into any joint venture, partnership or profit sharing agreements;
4.	create, extend, grant or issue any mortgage, charge, debenture, pledge, lien, encumbrance or other security or third party right (other than liens arising in the ordinary course of business) over any of the assets or the undertaking of any of the Target Companies;
5.	create, extend or grant any guarantee, indemnity, performance bond or other security or contingent obligation in the nature of a financial obligation including letters of comfort or support, save in each case in respect of letters of credit and similar instruments, utility guarantees and otherwise in the ordinary course of business;
6.	create, allot or issue any shares, loan capital, securities convertible into shares or any option or right to subscribe in respect of any shares, loan capital or securities convertible into shares;
7.	declare, pay or make any dividend or distribution;
8.	incur any liability in the nature of a borrowing (other than by bank overdraft or other short term facility (including for the issuance of letters of credit and similar instruments) in the ordinary course of business within limits established by the relevant bank at the date of this Agreement);
9.	make or agree to make or approve any capital commitment or approve any capital expenditure in excess of HK$200,000;
10.	allow any of its insurances to lapse or do anything to make any policy of insurance void or voidable or would or would be likely to, increase any premium payable in respect of such policy or prejudice the ability to effect equivalent insurance in the future;

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11.	alter the provisions of its Memorandum or Articles of Association or other constitutional documents or adopt or pass regulations or resolutions inconsistent with them;
12.	reduce the share capital of any of the Target Companies;
13.	engage or dismiss other than for just cause any employee who is crucial to the operation of any of the Target Companies or make any material variation to the terms and conditions of employment of any employee (other than indexation increases in salary in the ordinary course of business) or provide or agree to provide any gratuitous payment or benefit to any employee or any of their dependants;
14.	enter into, amend, terminate or dispose of any tenancy or lease agreement in respect of any property or acquire or dispose of any interest in any property;
15.	appoint any directors or secretaries;
16.	start any civil, criminal, arbitration or other proceedings;
17.	other than in the ordinary course of its business, not to settle, compromise, release, discharge or compound any civil, criminal, arbitration or other proceedings or any liability, claim, action, demand or dispute or waive any right in respect of the foregoing;
18.	pass any resolution in general meeting (other than any resolution constituting ordinary business conducted at an annual general meeting);
19.	make or issue any return or correspondence in connection with Taxation unless for the purpose of complying with the relevant regulatory requirements;
20.	change the accounting reference date of any of the Target Companies; or
21.	make any change to the accounting procedures or principles by reference to which its accounts are drawn up.

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IN WITNESS whereof this Agreement has been entered into the day and year first above written.

SIGNED by	)
for and on behalf of	)	/s/ John Q. Farina
NAM TAI ELECTRONIC &	)	9/10/07
ELECTRICAL PRODUCTSLIMITED	)	/s/ [signature illegible]
in the presence of:- /s/ [signature	)
illegible]

SIGNED by	)
	)	/s/ [signature illegible]
for and on behalf of	)
J.I.C. TECHNOLOGY COMPANY	)
LIMITED	)
in the presence of:- /s/ [signature
illegible]

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EX-4.35

EXHIBIT 4.35

Loan Agreement

Borrower (Party A): Jetup Electronic (Shenzhen) Co., Ltd.
Address: Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village, Xixiang Town, Bao’an District,
Shenzhen, People’s Republic of China, (Post code: 518102)
Legal representative (person in charge): Ivan Chui

Lender (Party B): J.I.C. Technology Company Limited
Address: Century Yard, Cricket Square, Hutchins Drive, P.O.Box 2681 GT, George Town, Grand Cayman,
Cayman Islands, British West Indies
Legal representative (person in charge): Ivan Chui

Foreword

1.	Party A signed External Loan Agreement (“Former Loan Agreement”) with Party B on Mar. 31, 2005, Party B agreed to lend external loan with the amount not more than HKD 50,000,000 to Party A, the term of the loan was from Apr. 1, 2005 to Mar. 31, 2006. External loan under the Former Loan Agreement has been fully repaid.
2.	To meet the demand of liquid funds(including daily operating expense), Party A borrowed another external loan (“Loan Agreement”) from Party B with the amount of HKD 10,500,000, and the term of the loan was from Nov. 7, 2005 to Nov. 6, 2006.
3.	Life of certain loan was extended from Nov.7, 2006 to Nov. 6, 2007 in November 2006.
4.	In consideration of the expiration of the term of the external loan agreement, the term of certain loan is extended from Nov. 7, 2007 to Nov. 6, 2008 in accordance with the negotiation of both parties.

Having reached unanimity through consultation and negotiation, Party A and Party B, hereby agree to enter into the following Agreement to be abided by both parties.

Article 1 Amount of Loan

Party A borrowed from Party B with (capitalized) HK Dollars Ten Million and Five Hundred Thousand Only.

Article 2 Use of Loan

The loan shall be used to meet the demand of liquid funds under the trade account, including daily operating expense, of Party A.

Article 3 Term of Loan

The term of the loan agreed hereby is one year, i.e. from Nov. 7, 2007 to Nov. 6, 2008.

Article 4

1

The annual percentage rate of the loan hereunder is 0% (interest free).

Article 5 Repayment

1. Repayment principle

In principle, the borrower shall repay the whole amount on the date of expiration in case it has adequate capital, or Party A may choose to repay by installments according to capital conditions; the loan may be extended through discussion.

2. Repayment method

The repayment shall be transferred by bank telegraph.

3. Prepayment

Party B agrees that Party A may repay the loan at any time in case it has adequate capital.

Article 6

This Agreement shall take effect from the date of being signed and sealed by the legal representative (person in charge) or authorized agent of Party A and person in charge or authorized agent of Party B.

Article 7

This Agreement is executed in triplicates. It shall be terminated automatically after the principal is repaid by Party A.

Article 8

This Agreement is in line with the laws of the People’s Republic of China, and shall be performed according to Hong Kong laws as well.

Party A (seal): Jetup Electronic (Shenzhen) Co., Ltd.
Legal representative (person in charge) or authorized agent (signature):

Original signature of Mr. Chui Kam Wai

Date: Nov.6, 2007

Party B (seal): J.I.C. Technology Company Limited
Person in charge or authorized agent (signature):

Original signature of Mr. Chui Kam Wai

Date: Nov.6, 2007

2

EX-4.36

EXHIBIT 4.36

Loan Agreement

Borrower (Party A): Jetup Electronic (Shenzhen) Co., Ltd.
Address: Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village, Xixiang Town, Bao’an District,
Shenzhen, People’s Republic of China, (Post code: 518102)
Legal representative (person in charge): Ivan Chui

Lender (Party B): J.I.C. Technology Company Limited
Address: Cricket Square, Hutchins Drive, P.O. Box 2681 Grand Cayman KY1-111, Cayman Islands
Legal representative (person in charge): Ivan Chui

Foreword

1.	Party A signed External Loan Agreement (“Former Loan Agreement”) with Party B on Mar. 31, 2005, Party B agreed to lend external loan with the amount not more than HKD 50,000,000 to Party A, the term of the loan was from Apr. 1, 2005 to Mar. 31, 2006. External loan under the Former Loan Agreement has been fully repaid.
2.	To meet the demand of purchasing material of production and expense of daily operation resulting from the increasing business, Party A borrowed another external loan (“Loan Agreement”) from Party B with the amount of (capitalized) HKD Eleven Million Only (HKD 11,000,000) and the term of the loan was from Nov. 16, 2005 to Nov. 15, 2006.
3.	Term of certain loan was extended from Nov.16, 2006 to Nov. 15, 2007 in November 2006.
4.	In consideration of the expiration of the loan agreement, the term of certain loan is extended from Nov. 16, 2007 to Nov. 15, 2008 in accordance with the negotiation of both parties.

Having reached unanimity through consultation and negotiation, Party A and Party B, hereby agree to enter into the following Agreement to be abided by both parties.

Article 1 Amount of Loan

Party A borrowed from Party B with (capitalized) HK Dollars Eleven Million Only.

Article 2 Use of Loan

The loan shall be used to purchase production material and daily operation so as to meet the demand of increasing business of Party A.

Article 3 Term of Loan

The term of loan agreed hereby is one year, i.e. from Nov. 16, 2007 to Nov. 15, 2008.

Article 4

The annual percentage rate of the loan hereunder is 0% (interest free).

1

Article 5 Repayment

1. Repayment principle

In principle, the borrower shall repay the whole amount at date of expiration in case it has adequate capital, or Party A may select to repay by installments according to capital conditions; the loan may be extended through discussion.

2. Repayment method

The repayment shall be transferred by bank telegraph.

3. Prepayment

Party B agrees that Party A may repay the loan at any time in case its capital is adequate.

Article 6

This Agreement shall take effect from the date of being signed and sealed by the legal representative (person in charge) or authorized agent of Party A and person in charge or authorized agent of Party B.

Article 7

This Agreement is executed in triplicates. The Agreement shall be terminated automatically after the principal is repaid by Party A.

Article 8

This Agreement is in line with the laws of the People’s Republic of China, and shall be performed according to Hong Kong laws as well.

Party A (seal): Jetup Electronic (Shenzhen) Co., Ltd.
Legal representative (person in charge) or authorized agent (signature):

Original signature of Mr. Chui Kam Wai

Date: Nov.15, 2007

Party B (seal): J.I.C. Technology Company Limited
Person in charge or authorized agent (signature):

Original signature of Mr. Chui Kam Wai

Date: Nov.15, 2007

2

EX-4.37

Exhibit 4.37

DATED 28 NOVEMBER 2007

J.I.C. TECHNOLOGY COMPANY LIMITED

and

NAM TAI ELECTRONICS, INC.

AGREEMENT

supplemental to the agreement dated 24 September 2007
relating to the sale and purchase of
the entire equity interest in
Jetup Electronic (Shenzhen) Co., Ltd.

as supplemented and amended by
a supplemental agreement dated 5 October 2007

I N D E X

Clause		Page
1.	Interpretation		1
1A.	Agreement supplemental to the Original Agreement		5
2.	Sale and Purchase		5
3.	Conditions		5
4.	Completion		7
5.	Warranties		7
6.	Conduct of Business Pending Completion		9
7.	Costs		10
8.	Further Assurance		10
9.	Miscellaneous		10
10.	Notices		11
11.	Time of the Essence		11
12.	Governing Law		11
13.	Process Agents		11

Schedules

Schedule 1	Details of the Company	13
Schedule 2	Tenancies	14
Schedule 3	Warranties	15
Schedule 4	Restricted Actions Pending Completion	25
Execution Clause		27

THIS SUPPLEMENTAL AGREEMENT is dated 28 November 2007 and is made

BETWEEN :-

(1)	J.I.C. TECHNOLOGY COMPANY LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Vendor”); and
(2)	NAM TAI ELECTRONICS, INC. a company incorporated in the British Virgin Islands whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Purchaser”).

WHEREAS:-

(1) By an agreement dated 24 September 2007 made between the Vendor and the Purchaser as supplemented and amended by a supplemental agreement dated 5 October 2007 (the “Original Agreement”), the Vendor agreed to sell and the Purchaser agreed to purchase 91% interest in the Company (as defined hereinafter) (the “Original Transaction”).

(2) The Vendor and the Purchaser now wish to enter into this Supplemental Agreement to make amendments to the Original Agreement to reflect the change of certain aspects of the Original Transaction.

NOW IT IS HEREBY AGREED as follows:-

1.	INTERPRETATION
1.01	In this Supplemental Agreement unless the context otherwise requires:-

(a) the following expressions shall have the following meanings:

Expression	Meaning
“Accounts”	the audited financial statements of the Company in respect of each of the three financial years ended on 31 December 2006 and of the six months ended on 30 June 2007
“Accounts Date”	30 June 2007
“Business Day”	means a day other than a Saturday or Sunday, on which banks are open in Hong Kong to the general public for business
“Company”	Jetup Electronic (Shenzhen) Co., Ltd. a company incorporated in the PRC and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Schedule 1

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“Companies Ordinance”	the Companies Ordinance (Chapter 32, as amended from time to time, of the Laws of Hong Kong)
“Completion”	completion of the sale and purchase of the Sale Interest in accordance with the terms and conditions of this Supplemental Agreement
“Completion Date”	the date on which Completion occurs
“Conditions”	the conditions set out in Clause 3.01
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China
“Intellectual Property”	(a)    patents, trade marks, service marks, registered designs, applications for any of those rights, trade and business names (including internet domain names and e-mail address names), unregistered trade marks and service marks, copyrights, database rights, know-how, rights in designs and inventions;
	(b)    rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); and
	(c)    rights of the same or similar effect or nature as or to those in paragraphs (a) and (b), in each case in any part of the world
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“Namtek Acquisition Agreement”	an agreement dated 5 October 2007 as amended and supplemented by a supplemental agreement dated 28 November 2007 made between the Vendor and NTEEP whereby NTEEP agreed to sell and the Vendor agreed to purchase the entire interest in (i) Kabushiki Kaisha Namtek Japan; and (ii) Shenzhen Namtek Co., Ltd., subject to and upon the terms and conditons thereof

- 2 -

“NTEEP”	Nam Tai Electronic & Electrical Products Limited, a company incorporated in the Cayman Islands and the shares of which are listed on the Main Board of the Stock Exchange
“PRC”	the People’s Republic of China and, for the purposes of this Supplemental Agreement, excluding Hong Kong, Macau and Taiwan
“Sale Interest”	the entire equity interest in the Company legally and beneficially owned by the Vendor
“Stamp Duty Ordinance”	the Stamp Duty Ordinance (Chapter 117, as amended from time to time, of the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Taxation”	(i) any liability to any form of taxation whenever created or imposed and whether of the PRC or of any other part of the world and without prejudice to the generality of the foregoing includes profits tax, provisional profits tax, interest tax, salaries tax, property tax, estate duty, death duty, capital duty, stamp duty, payroll tax, withholding tax, rates, customs and excise duties and generally any tax, duty, impost, levy or rate or any amount payable to the revenue, customs or fiscal authorities whether of the PRC or of any other part of the world;
	(ii) such an amount or amounts as is referred to in sub-clause (i) above; and
	(iii) all costs, interest, penalties, charges, fines and expenses incidental or relating to the liability to taxation or the loss, reduction, modification, cancellation or deprivation of relief or of a right to repayment of the taxation
“Tenancies”	the tenancies and sub-tenancies where the Company is the lessor or the lessee, particulars of which are set out in Schedule 2
“Warranties”	the representations, warranties and undertakings set out in Schedule 3

- 3 -

“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“US$”	the United States dollars, the lawful currency of the United States of America

(b)	words and expressions defined in the Companies Ordinance shall bear the same respective meanings herein;
(c)	reference to any statute or statutory provision shall include any statute or statutory provision which amends or replaces, or has amended or replaced, it shall include any subordinate legislation made under the relevant statute;
(d)	a body corporate shall be deemed to be associated with another body corporate if it is a holding company or a subsidiary of that other body corporate or a subsidiary of a holding company of that body corporate;
(e)	references to Clauses and sub-clauses and Schedules are to Clauses and sub-clauses of and Schedules to this Supplemental Agreement;
(f)	references to writing shall include typewriting, printing, lithography, photography, telecopier, telex and electronic messages and any mode of reproducing words in a legible and non-transitory form;
(g)	words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporate.

1.02	Headings are for convenience only and shall not affect the construction of this Supplemental Agreement.
1.03	In construing this Supplemental Agreement:-

(a)	the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
(b)	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

1.04 The Schedules form part of this Supplemental Agreement and shall have the same force and effect as if expressly set out in the body of this Supplemental Agreement and any reference to this Supplemental Agreement shall include the Schedules.

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1A.	AGREEMENT SUPPLEMENTAL TO THE ORIGINAL AGREEMENT
1A.01	This Supplemental Agreement shall supplement and be read in conjunction with the Original Agreement; however where any provision in this Supplemental Agreement is inconsistent with any provision in the Original Agreement, this Supplemental Agreement shall prevail.
2.	SALE AND PURCHASE
2.01	On the terms set out in this Supplemental Agreement, the Vendor as beneficial owner shall sell the Sale Interest to the Purchaser free from all liens, charges, encumbrances, equities and adverse interests and with all rights attached or accruing thereto at the date hereof (including the right to receive all dividends and other distributions declared, made or paid on or after the date hereof) and the Purchaser relying on the representations, warranties, undertakings and indemnities of the Vendor contained or referred to herein shall purchase the Sale Interest at Completion.
2.02	The consideration for the sale of the Sale Interest is the sum of HK$381,767,378, which shall be paid by the Purchaser to the Vendor (or as it may direct) in accordance with Clause 4.01(b).
3.	CONDITIONS
3.01	Completion is conditional upon the following conditions being satisfied on or before 31 December 2007 or such other date as otherwise agreed by the parties hereto (the “Longstop Date”):

(a)	the obtaining in terms acceptable to the Purchaser, of all consents, approvals, clearances and authorisations of any relevant governmental authorities or other relevant third parties in the PRC as may be necessary for the execution and implementation of this Supplemental Agreement;
(b)	the Company receiving all relevant consents and approvals from third parties as may be necessary in connection with the proposed change in shareholding of the Company so as to ensure that the Company maintains all its existing contractual and other rights following the transfer of the Sale Interest (including, without limitation, the consent of the existing bankers of the Company to continue to provide the existing banking facilities to the Company following the transfer of the Sale Interest);
(c)	the passing at an extraordinary general meeting of the Vendor of ordinary resolution(s) approving this Supplemental Agreement and the transactions contemplated by this Supplemental Agreement by the shareholders of the Vendor (excluding such shareholders who shall be required to abstain from voting under the Listing Rules); and

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(d) completion of the Namtek Acquisition Agreement becoming unconditional in all respects (save in respect of any condition relating to completion of this Supplemental Agreement).

3.02		The Vendor will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Purchaser when each of the said Conditions have been satisfied.
3.03	(a)	If at any time the Vendor becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it will immediately inform the Purchaser.

(b) If at any time the Purchaser becomes aware of a fact or circumstance that might prevent a condition being satisfied, it will immediately inform the Vendor.

3.04	If any of the Conditions have not been satisfied on or before the Longstop Date then this Supplemental Agreement will immediately terminate and all rights and obligations of the parties shall cease immediately upon termination.
3.05	For avoidance of doubt, the Purchaser agrees and acknowledges that the formal registration documents to be issued by the relevant PRC governmental authorities evidencing the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) (or the SPV (as defined in Clause 3.06) as the sole investor of Jetup (the “Jetup Approval Documents”) may not be available at Completion and that the absence of the Jetup Approval Documents shall not prevent this Supplemental Agreement becoming unconditional nor the parties proceeding to Completion PROVIDED that (1) the Vendor can produce an undertaking from the Vendor to the Purchaser that it will use its best endeavours to procure the issuance of the Jetup Approval Documents; and that (2) the Vendor hereby agrees and acknowledges that the Sale Interest shall be so held on trust for the benefits of the Purchaser (or the SPV) from Completion until the issuance of the Jetup Approval Documents.
3.06	The Purchaser may request the Vendor to procure the transfer of the Sale Interest to a holding company (“SPV”) prior to Completion, in which case the Vendor shall also deliver to or to the order of the Purchaser at Completion pursuant to Clause 4.01(a) evidence satisfactory to the Purchaser that good title to the entire equity capital of the SPV has been passed to the Purchaser and the Purchaser has been registered as the holder thereof.

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4 COMPLETION

4.01 Completion of the sale and purchase of the Sale Interest shall take place on the fifth Business Day following satisfaction or waiver of the Conditions, or such other date as the Vendor and the Purchaser may agree in writing at Unit C, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao when all (but not part only) of the following business shall be transacted:-

(a)

the Vendor shall deliver to or to the order of the Purchaser evidence satisfactory to the Purchaser that a good title to the Sale Interest has been passed to the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) and the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) has been registered as the holder thereof, or, if Clause 3.05 is applicable, the documents referred to in Clause 3.05; and

(b)

the Purchaser shall pay the consideration referred to in Clause 2.02 to the Vendor, unless the parties hereto agree otherwise.

4.02	No party shall be obliged to complete this Supplemental Agreement or perform any obligations under Clause 4.01 unless the other party demonstrates that it is able to comply fully with the requirements of Clause 4.01 simultaneously.
5	WARRANTIES

5.01 The Vendor hereby:-

(a)

represents, warrants and undertakes to the Purchaser that each of the Warranties set out in Schedule 3 is true and accurate in all respects and is not misleading and accept that the Purchaser is entering into this Supplemental Agreement in reliance upon each of the Warranties notwithstanding any investigations which the Purchaser or any of its directors, officers, employees, agents or advisors may have made and notwithstanding any information regarding the Company which may otherwise have come into the possession of any of the foregoing;

(b)

undertakes to indemnify the Purchaser against all claims, liabilities, losses, costs and expenses the Purchaser may suffer or incur or which may be made against the Purchaser either before or after the commencement of and arising out of, or in respect of, any action in connection with :-

(i) the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;

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(ii)	any legal proceedings in which the Purchaser claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for the Purchaser; or
(iii)	the enforcement of any such settlement or judgment.

5.02	Without prejudice to any other rights and remedies available at any time to the Purchaser (including but not limited to any right to damages for any loss suffered by the Purchaser) the Purchaser may (if the effect of any breach of any Warranty is that the Company, or any of its assets, is worth less than its value would have been if there had been no such breach or that the Company is or will be under a liability or an increased or substituted liability which would not have subsisted if there had been no such breach) by notice to the Vendor require it to make good to the Company the diminution in the value of the asset or all loss occasioned by such liability or increased or substituted liability by a payment in cash to the relevant company or to pay to the Purchaser an amount equal to the diminution thereby caused in the value of the Sale Interest. If any such payment gives rise to a liability to Taxation on the part of the relevant company or the Purchaser as the recipient thereof, such payment shall be increased by such an amount as shall ensure that, after payment of such Taxation, the recipient shall have received an amount equal to the payment otherwise required hereby to be paid.
5.03	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Supplemental Agreement.
5.04	Any rights to which the Purchaser may be or become entitled by reason of any of the Warranties being untrue or misleading or breached and all remedies which may be available to the Purchaser in consequence of any of the Warranties being untrue or misleading or breached shall enure for the benefit of any associated company of the Purchaser which is the beneficial owner for the time being of any of the Sale Interest purchased by the Purchaser hereunder and accordingly any loss which is sustained by such beneficial owner for the time being of the Sale Interest in consequence of any of the Warranties being untrue or misleading or breached shall be deemed to be that of the Purchaser and the Purchaser may bring proceedings and exercise any other remedy on the footing that it has been the beneficial owner of the Sale Interest at all times from Completion.
5.05	The Vendor shall not be liable in respect of any breach of the Warranties after the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder (as defined under the Listing Rules) of the Vendor, except in respect of those matters which have been the subject of a claim made hereunder or in respect of those circumstances which may give rise to a claim made hereunder and of which notice has been given to the Vendor on or prior to the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder of the Vendor.

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5.06	The total liability of the Vendor under this Supplemental Agreement shall not exceed HK$381,767,378.
5.07	The Vendor shall have no liability under this Supplemental Agreement unless the aggregate amount of all valid claims which could otherwise be made under this Supplemental Agreement shall exceed HK$500,000.
5.08	The Vendor shall not be liable for breach of any Warranty to the extent that such liability arises by reason of any act or omission effected by the Purchaser or the Company after Completion (other than action taken by the Purchaser or on its behalf in establishing that any of the Warranties being untrue or misleading or breached) or by reason of any retrospective change in the law coming into force after the date hereof or to the extent such liability arises or is increased by an increase in rates of taxation after the date hereof with retrospective effect.
5.09	The Vendor hereby undertakes that it will from time to time and at any time prior to the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder of the Vendor, forthwith disclose in writing to the Purchaser any event, fact or circumstance which may become known to them after the date hereof and which is materially inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of any of the Sale Interest or which may entitle the Purchaser to make any claim under this Supplemental Agreement.
5.10	The Vendor shall not, and shall procure that the Company shall not, do or allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given.
5.11	It is hereby agreed between the parties hereto that no party will have the right to rescind this Supplemental Agreement.
5.12	The Vendor shall not (in the event of any claim being made against the Vendor in connection with the sale of the Sale Interest to the Purchaser) make any claim against the Company or against any director or employee of the Company on whom the Vendor may have relied before agreeing to any term of this Supplemental Agreement.

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6. CONDUCT OF BUSINESS PENDING COMPLETION

6.01 The Vendor will procure that the Company shall not (save with the consent of the Purchaser), prior to Completion (or the termination of this Supplemental Agreement (whichever is earlier)):

(a)	do anything outside its ordinary course of business;
(b)	do anything which is not in accordance with its past practices; or
(c)	without prejudice of generality of Clauses 6.01(a) and 6.01(b), undertake any of the activities listed in Schedule 4.

7.	COSTS
7.01	Each party shall pay its own costs, stamp duty and capital duty in relation to the negotiations leading up to the sale and purchase of the Sale Interest and the preparation, execution and carrying into effect of this Supplemental Agreement and the transactions contemplated or referred to herein.
8.	FURTHER ASSURANCE
8.01	Each of the parties hereto undertakes to the other party that it will do all such acts and things and execute all such deeds and documents as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Supplemental Agreement and the transactions hereby contemplated.
9.	MISCELLANEOUS
9.01	Without prejudice to the provisions of this Supplemental Agreement stipulating that certain acts, obligations and/or events are to be performed or shall take place on a particular date or dates, any provision of this Supplemental Agreement which is capable of being performed after but which has not been performed at or before Completion and all warranties and indemnities and other undertakings contained in or entered into pursuant to this Supplemental Agreement shall remain in full force and effect notwithstanding Completion.
9.02	This Supplemental Agreement shall be binding on and enure for the benefit of the successors of each of the parties but shall not be assignable.
9.03	Any remedy conferred on any party hereto for breach of this Supplemental Agreement (including the breach of any Warranty) shall be in addition and without prejudice to all other rights and remedies available to it and the exercise of or failure to exercise any remedy shall not constitute a waiver by such party of any of its rights or remedies.

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9.04	This Supplemental Agreement constitutes the whole agreement between the parties relating to the transactions hereby contemplated (no party having relied on any representation or warranty made by any other party which is not a term of this Supplemental Agreement) and no future variation shall be effective unless made in writing and signed by each of the parties hereto.
9.05	If at any time any provision of this Supplemental Agreement is or becomes illegal, invalid or unenforceable in any respect, the remaining provisions hereof shall in no way be affected or impaired thereby.
10.	NOTICES
10.01	Any notice required or permitted to be given by or under this Supplemental Agreement may be given by delivering the same to the party in question by delivering it to such party in person or in the case of a body corporate by delivering it to its registered office for the time being or by sending it in a prepaid envelope by registered mail to the party concerned at its address shown in this Supplemental Agreement or to such other address in Hong Kong as the party concerned may have notified to the others in accordance with this Clause and any such notice shall be deemed to be served when the same would first be received at the address of the party to whom it is addressed in the normal course of such method of delivery.
11.	TIME OF THE ESSENCE
11.01	Time shall be of the essence of this Supplemental Agreement.
12.	GOVERNING LAW
12.01	The Original Agreement and this Supplemental Agreement shall be governed by and construed in accordance with the laws of the PRC and each party hereby submits to the non-exclusive jurisdiction of the courts of the PRC as regards any claim or matter arising under this Supplemental Agreement.
13.	PROCESS AGENTS
13.01	The Vendor hereby appoints its company secretary c/o Suite 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Supplemental Agreement and direct such service to Unit C, 17th Floor, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao and service on Ms. Eve Leung (or such substitute) shall be deemed to be service on the Vendor.

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13.02 The Purchaser hereby appoints its corporate secretary of Suite 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Supplemental Agreement and service on Mr. Kee Wong (or such substitute) shall be deemed to be service on the Purchaser.

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SCHEDULE 1

Details of the Company

Name	: Jetup Electronic (Shenzhen) Co., Ltd.
Date of incorporation	: 15 April 1993
Place of incorporation	: Shenzhen, PRC
Registered Office	:
Total Investment	: HK$225,400,000
Registered Capital	: HK$181,200,000
Paid Up Capital	: HK$181,200,000
Name of investor on the certificate of approval	: the Vendor
Directors	: Chui Kam Wai (Chairman)
	Yuen Lap Kei
	Yeoh Teck Hooi
	Koo Ming Kown
Auditors	: Deloitte Touche Tohmatsu
Financial year end	: 31 December

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SCHEDULE 2

Tenancies

A lease under a Factory and Dormitory Lease Contract dated 17 October 2003 made between the Company (as lessee) and

(as lessor), supplemented by three supplemental contracts made between the said parties on 21 July 2004, 13 October 2004 and 1 May 2007, certain particulars of which are set out below:

Property :	certain factory premises, staff dormitory, canteen, escalators, restaurants located at (1)
Term:	commencing on 1 March 2004 and ending on 29 February 2012
Total rent :	RMB769,070 per month

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SCHEDULE 3

The Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of the Company that all the information contained in Schedules 1 and 2 is correct and:-

1.	The Sale Interest
(A)	The Vendor is the beneficial owner of the Sale Interest with full authority to sell and transfer the full legal and beneficial ownership of the Sale Interest registered in its name to the Purchaser.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Sale Interest or any part of the unissued share capital of the Company and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Sale Interest are fully paid up and rank pari passu in all respects with the existing issued shares of the Company.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in the Company.
2.	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of the Company produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of the Company have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of the Company.
3.	Compliance with legal requirements

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(A)	The Company is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with the Company concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the appropriate legislation to be filed with the appropriate regulatory bodies in the PRC or elsewhere where the Company operates (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions, and (e) directors and other officers.
(C)	There has been no material breach by the Company or any of its officers (in his capacity as such) of any legislation or regulations affecting it or its business.
4.	Accounts, bank accounts and borrowings
(A)	The Accounts show a true and fair view of the results of the Company for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of the Company as at such date, in each case on the basis stated therein.
(B)	The Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of the Company were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by the Company;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;
(iv)	give a true and fair view of the state of affairs and financial position of the Company at the Accounts Date and of the results of the Company for the financial period covered by the Accounts and the management financial information therein fairly represent the state of affairs and financial position of the Company for the period covered by the Accounts;

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(v) (including the management financial information therein) are not affected by any unusual or non-recurring items which are not disclosed in the Accounts.

(C)	The Company has no outstanding liability for Taxation of any kind which has not been provided for in the Accounts.
(D)	The Company has no outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital which has not been adequately disclosed or provided for in the Accounts.
(E)	The Company owns free from encumbrance all its undertaking and assets shown or comprised in the Accounts and all such assets are in its possession or under its control.
(F)	The Company does not hold any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which the Company is a party:-

(i)	there has been no contravention of or non-compliance with any provision or term of any of the arrangements;
(ii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iii)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(iv)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(v)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party, except the existing guarantees provided by the Vendor.

(H) The total amount borrowed by the Company :-

(i)	from its bankers does not exceed its financial facilities; and
(ii)	from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

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(I)	Having regard to the existing facilities available to the Company, the Company has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Accounts, the Company has not declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of the Company and the Company has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of the Company in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	the Company has not declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of the Company has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of the Company has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by the Company;
(vii)	no asset of the Company has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by the Company, and no contract involving expenditure by it of a capital nature has been entered into by the Company, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interest;
(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) by the Company in circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;

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(ix)	no event has occurred which gives rise to any liability for Taxation to the Company on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to the Company.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to the Company :-

(i)	any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);
(ii)	any agreements or arrangements to which the Company is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses (save and except for the existing incentive bonus share already disclosed to Purchaser);
(iii)	save and except for the compliance with the applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which the Company is under any actual or contingent liability in respect of :-

(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

(v) any contract to which the Company is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interest;

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(vi)	any agreement entered into by the Company otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between the Company and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to the operation of the Company which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Sale Interest or of compliance with any other provision of this Supplemental Agreement; and
(viii)	any contract which materially restricts the freedom of the Company to carry on the business now carried on by it in any part of the world.

(B)	Neither the Company nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which the Company is a party or any approval or franchise granted by any governmental or regulatory bodies to the Company and which is material to the operation of the Company.
(C)	No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of the Company.
(D)	The Company is not under any obligation, nor is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	The Company is not a party to nor has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	The Company is not a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.
(G)	The Company has no outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.

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(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, the Company has not given any guarantee or warranty, or made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.
7.	Insurance
(A)	The Company has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against the Company by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	Neither the Company nor the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle any Company to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against the Company is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of the Company in respect of any act or default for which the Company might be vicariously liable.
9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of the Company.
(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of the Company.

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(C)	The Company has not stopped payment or is insolvent or unable to pay its debts.
(D)	No material unsatisfied judgment is outstanding against the Company.
(E)	No event analogous to any of the foregoing has occurred in or outside PRC in respect of the Company.
10.	Delinquent acts
	The Company has not committed nor is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. The Company has not received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of the Company.
11.	Tax returns
(A)	The Company has, in respect of all years of assessment since incorporation or establishment falling before the date of this Supplemental Agreement, made or caused to be made all proper returns, and has supplied or caused to be supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere if applicable ) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from the Company or regarding the availability to the Company of any relief from Taxation or duty.
(B)	The Company has sufficient records relating to past events during the six years prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	The Company has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Accounts.
12.	Stamp and other duties
	The Company has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by the Company under any such Ordinance, legislation or regulations.
13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against the Company exceeding the amount of HK$500,000.

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(B)	Full provision has been made in the Accounts for all and any compensation or severance payment for which the Company is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.
(C)	Save and except for compliance with the relevant statutory requirements, the Company is not paying, nor is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.
(D)	The Company has no outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.
(E)	No employee of the Company who is crucial to the operation of Jetup has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	The Company has not given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	The Company has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.
16.	Interests in companies, partnerships or joint ventures
(A)	The Company has no interest in the share capital of any company or in any partnership or joint venture.
(B)	The Company has not acted or carried on business in partnership with other person(s) or is a member of any corporate or unincorporated body, undertaking or associate.
17.	Tenancies
(A)	The Tenancies are all good, valid and subsisting and have in no way become void or voidable..

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(B)	All covenants, obligations, conditions and restrictions imposed upon the Company under the Tenancies have been duly and promptly observed and performed.
(C)	The agreements for the Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time.
(D)	No Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Supplemental Agreement.
18.	Intellectual property rights
(A)	To the best of the Company’s knowledge and belief, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Supplemental Agreement by the Company do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property or another person.
(B)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to the Company in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

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SCHEDULE 4

Restricted Action Pending Completion

The Vendor shall ensure that the Company shall not do nor agree (conditionally or unconditionally) to do any of the following (save with the consent of the Purchaser):

1.	dispose of, or grant any option or right of pre-emption in respect of, or acquire, any fixed asset of the Company with a net book value in excess of HK$200,000;
2.	enter into any transaction, agreement, contract or commitment or acquire or dispose of any interest in any asset (except in the ordinary course of business as carried on at the date of this Supplemental Agreement) or assume or incur, or agree to assume or incur, a liability, obligation or expense (actual or contingent) except in the ordinary course of business;
3.	enter into any joint venture, partnership or profit sharing agreements;
4.	create, extend, grant or issue any mortgage, charge, debenture, pledge, lien, encumbrance or other security or third party right (other than liens arising in the ordinary course of business) over any of the assets or the undertaking of the Company;
5.	create, extend or grant any guarantee, indemnity, performance bond or other security or contingent obligation in the nature of a financial obligation including letters of comfort or support, save in each case in respect of letters of credit and similar instruments, utility guarantees and otherwise in the ordinary course of business;
6.	create, allot or issue any shares, loan capital, securities convertible into shares or any option or right to subscribe in respect of any shares, loan capital or securities convertible into shares;
7.	declare, pay or make any dividend or distribution;
8.	incur any liability in the nature of a borrowing (other than by bank overdraft or other short term facility (including for the issuance of letters of credit and similar instruments) in the ordinary course of business within limits established by the relevant bank at the date of this Supplemental Agreement);
9.	make or agree to make or approve any capital commitment or approve any capital expenditure in excess of HK$200,000;
10.	allow any of its insurances to lapse or do anything to make any policy of insurance void or voidable or would or would be likely to, increase any premium payable in respect of such policy or prejudice the ability to effect equivalent insurance in the future;

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11.	alter the provisions of its Memorandum or Articles of Association or other constitutional documents or adopt or pass regulations or resolutions inconsistent with them;
12.	reduce the share capital of the Company;
13.	engage or dismiss other than for just cause any employee who is crucial to the operation of the Company or make any material variation to the terms and conditions of employment of any employee (other than indexation increases in salary in the ordinary course of business) or provide or agree to provide any gratuitous payment or benefit to any employee or any of their dependants;
14.	enter into, amend, terminate or dispose of any tenancy or lease agreement in respect of any property or acquire or dispose of any interest in any property;
15.	appoint any directors or secretaries;
16.	start any civil, criminal, arbitration or other proceedings;
17.	other than in the ordinary course of its business, not to settle, compromise, release, discharge or compound any civil, criminal, arbitration or other proceedings or any liability, claim, action, demand or dispute or waive any right in respect of the foregoing;
18.	pass any resolution in general meeting (other than any resolution constituting ordinary business conducted at an annual general meeting);
19.	make or issue any return or correspondence in connection with Taxation unless for the purpose of complying with the relevant regulatory requirements;
20.	change the accounting reference date of the Company; or
21.	make any change to the accounting procedures or principles by reference to which its accounts are drawn up.

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IN WITNESS whereof this Supplemental Agreement has been entered into the day and year first above written.

SIGNED by	)
	)	/s/ [signature illegible]
for and on behalf of	)
J.I.C. TECHNOLOGY COMPANY	)
LIMITED	)
in the presence of:- /s/ [signature illegible]
SIGNED by	)
	)	/s/ Koo Ming Kown
NAM TAI ELECTRONICS, INC.	)
for and on behalf of	)
in the presence of:- /s/ [signature illegible]	)

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EX-4.38

EXHIBIT 4.38

DATED 28 NOVEMBER 2007

J.I.C. TECHNOLOGY COMPANY LIMITED

and

NAM TAI ELECTRONICS, INC.

AGREEMENT

supplemental to the agreement dated 24 September 2007
relating to the sale and purchase of
the entire equity interest in
Jetup Electronic (Shenzhen) Co., Ltd.

as supplemented and amended by
a supplemental agreement dated 5 October 2007

I N D E X

Clause		Page
1.	Interpretation		1
1A.	Agreement supplemental to the Original Agreement		5
2.	Sale and Purchase		5
3.	Conditions		5
4.	Completion		7
5.	Warranties		7
6.	Conduct of Business Pending Completion		9
7.	Costs		10
8.	Further Assurance		10
9.	Miscellaneous		10
10.	Notices		11
11.	Time of the Essence		11
12.	Governing Law		11
13.	Process Agents		11

Schedules
Schedule 1	Details of the Company	13
Schedule 2	Tenancies	14
Schedule 3	Warranties	15
Schedule 4	Restricted Actions Pending Completion	25
Execution Clause		27

THIS SUPPLEMENTAL AGREEMENT is dated 28 November 2007 and is made

BETWEEN :-

(1)	J.I.C. TECHNOLOGY COMPANY LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Vendor”); and
(2)	NAM TAI ELECTRONICS, INC. a company incorporated in the British Virgin Islands whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Purchaser”).

WHEREAS:-

(1)	By an agreement dated 24 September 2007 made between the Vendor and the Purchaser as supplemented and amended by a supplemental agreement dated 5 October 2007 (the “Original Agreement”), the Vendor agreed to sell and the Purchaser agreed to purchase 91% interest in the Company (as defined hereinafter) (the “Original Transaction”).
(2)	The Vendor and the Purchaser now wish to enter into this Supplemental Agreement to make amendments to the Original Agreement to reflect the change of certain aspects of the Original Transaction.

NOW IT IS HEREBY AGREED as follows:-

1.	INTERPRETATION
1.01	In this Supplemental Agreement unless the context otherwise requires:-

(a) the following expressions shall have the following meanings:

Expression	Meaning
“Accounts”	the audited financial statements of the Company in respect of each of the three financial years ended on 31 December 2006 and of the six months ended on 30 June 2007
“Accounts Date”	30 June 2007
“Business Day”	means a day other than a Saturday or Sunday, on which banks are open in Hong Kong to the general public for business
“Company”	Jetup Electronic (Shenzhen) Co., Ltd. , a company incorporated in the PRC and a wholly owned subsidiary of the

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Expression	Meaning
	Vendor, certain basic information of which is set out in Schedule 1
“Companies Ordinance”	the Companies Ordinance (Chapter 32, as amended from time to time, of the Laws of Hong Kong)
“Completion”	completion of the sale and purchase of the Sale Interest in accordance with the terms and conditions of this Supplemental Agreement
“Completion Date”	the date on which Completion occurs
“Conditions”	the conditions set out in Clause 3.01
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China

“Intellectual Property”	(a)	patents, trade marks, service marks, registered designs, applications for any of those rights, trade and business names (including internet domain names and e-mail address names), unregistered trade marks and service marks, copyrights, database rights, know-how, rights in designs and inventions;
	(b)	rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); and
	(c)	rights of the same or similar effect or nature as or to those in paragraphs (a) and (b), in each case in any part of the world

“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“Namtek Acquisition Agreement”	an agreement dated 5 October 2007 as amended and supplemented by a supplemental agreement dated 28 November 2007 made between the Vendor and NTEEP whereby NTEEP agreed to sell and the Vendor agreed to purchase the entire interest in (i) Kabushiki Kaisha Namtek Japan; and (ii) Shenzhen Namtek Co., Ltd., subject to and upon the terms and conditons thereof

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Expression	Meaning
“NTEEP”	Nam Tai Electronic & Electrical Products Limited, a company incorporated in the Cayman Islands and the shares of which are listed on the Main Board of the Stock Exchange
“PRC”	the People’s Republic of China and, for the purposes of this Supplemental Agreement, excluding Hong Kong, Macau and Taiwan
“Sale Interest”	the entire equity interest in the Company legally and beneficially owned by the Vendor
“Stamp Duty Ordinance”	the Stamp Duty Ordinance (Chapter 117, as amended from time to time, of the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Taxation”	(i) any liability to any form of taxation whenever created or imposed and whether of the PRC or of any other part of the world and without prejudice to the generality of the foregoing includes profits tax, provisional profits tax, interest tax, salaries tax, property tax, estate duty, death duty, capital duty, stamp duty, payroll tax, withholding tax, rates, customs and excise duties and generally any tax, duty, impost, levy or rate or any amount payable to the revenue, customs or fiscal authorities whether of the PRC or of any other part of the world;
	(ii) such an amount or amounts as is referred to in sub-clause (i) above; and
	(iii) all costs, interest, penalties, charges, fines and expenses incidental or relating to the liability to taxation or the loss, reduction, modification, cancellation or deprivation of relief or of a right to repayment of the taxation
“Tenancies”	the tenancies and sub-tenancies where the Company is the lessor or the lessee, particulars of which are set out in Schedule 2
“Warranties”	the representations, warranties and undertakings set out in Schedule 3

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Expression	Meaning
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“US$”	the United States dollars, the lawful currency of the United States of America

(b)	words and expressions defined in the Companies Ordinance shall bear the same respective meanings herein;
(c)	reference to any statute or statutory provision shall include any statute or statutory provision which amends or replaces, or has amended or replaced, it shall include any subordinate legislation made under the relevant statute;
(d)	a body corporate shall be deemed to be associated with another body corporate if it is a holding company or a subsidiary of that other body corporate or a subsidiary of a holding company of that body corporate;
(e)	references to Clauses and sub-clauses and Schedules are to Clauses and sub-clauses of and Schedules to this Supplemental Agreement;
(f)	references to writing shall include typewriting, printing, lithography, photography, telecopier, telex and electronic messages and any mode of reproducing words in a legible and non-transitory form;
(g)	words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporate.

1.02	Headings are for convenience only and shall not affect the construction of this Supplemental Agreement.
1.03	In construing this Supplemental Agreement:-

(a)	the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
(b)	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

1.04 The Schedules form part of this Supplemental Agreement and shall have the same force and effect as if expressly set out in the body of this Supplemental Agreement and any reference to this Supplemental Agreement shall include the Schedules.

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1A.	AGREEMENT SUPPLEMENTAL TO THE ORIGINAL AGREEMENT
1A.01	This Supplemental Agreement shall supplement and be read in conjunction with the Original Agreement; however where any provision in this Supplemental Agreement is inconsistent with any provision in the Original Agreement, this Supplemental Agreement shall prevail.
2.	SALE AND PURCHASE
2.01	On the terms set out in this Supplemental Agreement, the Vendor as beneficial owner shall sell the Sale Interest to the Purchaser free from all liens, charges, encumbrances, equities and adverse interests and with all rights attached or accruing thereto at the date hereof (including the right to receive all dividends and other distributions declared, made or paid on or after the date hereof) and the Purchaser relying on the representations, warranties, undertakings and indemnities of the Vendor contained or referred to herein shall purchase the Sale Interest at Completion.
2.02	The consideration for the sale of the Sale Interest is the sum of HK$381,767,378, which shall be paid by the Purchaser to the Vendor (or as it may direct) in accordance with Clause 4.01(b).
3.	CONDITIONS
3.01	Completion is conditional upon the following conditions being satisfied on or before 31 December 2007 or such other date as otherwise agreed by the parties hereto (the “Longstop Date”):

(a)	the obtaining in terms acceptable to the Purchaser, of all consents, approvals, clearances and authorisations of any relevant governmental authorities or other relevant third parties in the PRC as may be necessary for the execution and implementation of this Supplemental Agreement;
(b)	the Company receiving all relevant consents and approvals from third parties as may be necessary in connection with the proposed change in shareholding of the Company so as to ensure that the Company maintains all its existing contractual and other rights following the transfer of the Sale Interest (including, without limitation, the consent of the existing bankers of the Company to continue to provide the existing banking facilities to the Company following the transfer of the Sale Interest);
(c)	the passing at an extraordinary general meeting of the Vendor of ordinary resolution(s) approving this Supplemental Agreement and the transactions contemplated by this Supplemental Agreement by the shareholders of the Vendor (excluding such shareholders who shall be required to abstain from voting under the Listing Rules); and

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(d) completion of the Namtek Acquisition Agreement becoming unconditional in all respects (save in respect of any condition relating to completion of this Supplemental Agreement).

3.02 The Vendor will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Purchaser when each of the said Conditions have been satisfied.

3.03	(a)	If at any time the Vendor becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it will immediately inform the Purchaser.
	(b)	If at any time the Purchaser becomes aware of a fact or circumstance that might prevent a condition being satisfied, it will immediately inform the Vendor.

3.04	If any of the Conditions have not been satisfied on or before the Longstop Date then this Supplemental Agreement will immediately terminate and all rights and obligations of the parties shall cease immediately upon termination.
3.05	For avoidance of doubt, the Purchaser agrees and acknowledges that the formal registration documents to be issued by the relevant PRC governmental authorities evidencing the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) (or the SPV (as defined in Clause 3.06) as the sole investor of Jetup (the “Jetup Approval Documents”) may not be available at Completion and that the absence of the Jetup Approval Documents shall not prevent this Supplemental Agreement becoming unconditional nor the parties proceeding to Completion PROVIDED that (1) the Vendor can produce an undertaking from the Vendor to the Purchaser that it will use its best endeavours to procure the issuance of the Jetup Approval Documents; and that (2) the Vendor hereby agrees and acknowledges that the Sale Interest shall be so held on trust for the benefits of the Purchaser (or the SPV) from Completion until the issuance of the Jetup Approval Documents.
3.06	The Purchaser may request the Vendor to procure the transfer of the Sale Interest to a holding company (“SPV”) prior to Completion, in which case the Vendor shall also deliver to or to the order of the Purchaser at Completion pursuant to Clause 4.01(a) evidence satisfactory to the Purchaser that good title to the entire equity capital of the SPV has been passed to the Purchaser and the Purchaser has been registered as the holder thereof.

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4	COMPLETION
4.01	Completion of the sale and purchase of the Sale Interest shall take place on the fifth Business Day following satisfaction or waiver of the Conditions, or such other date as the Vendor and the Purchaser may agree in writing at Unit C, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao when all (but not part only) of the following business shall be transacted:-

(a)

the Vendor shall deliver to or to the order of the Purchaser evidence satisfactory to the Purchaser that a good title to the Sale Interest has been passed to the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) and the Purchaser or its nominee (which may be any of the Purchaser’s subsidiaries) has been registered as the holder thereof, or, if Clause 3.05 is applicable, the documents referred to in Clause 3.05; and

(b)

the Purchaser shall pay the consideration referred to in Clause 2.02 to the Vendor, unless the parties hereto agree otherwise.

4.02	No party shall be obliged to complete this Supplemental Agreement or perform any obligations under Clause 4.01 unless the other party demonstrates that it is able to comply fully with the requirements of Clause 4.01 simultaneously.
5	WARRANTIES
5.01	The Vendor hereby:-

(a)

represents, warrants and undertakes to the Purchaser that each of the Warranties set out in Schedule 3 is true and accurate in all respects and is not misleading and accept that the Purchaser is entering into this Supplemental Agreement in reliance upon each of the Warranties notwithstanding any investigations which the Purchaser or any of its directors, officers, employees, agents or advisors may have made and notwithstanding any information regarding the Company which may otherwise have come into the possession of any of the foregoing;

(b)

undertakes to indemnify the Purchaser against all claims, liabilities, losses, costs and expenses the Purchaser may suffer or incur or which may be made against the Purchaser either before or after the commencement of and arising out of, or in respect of, any action in connection with :-

(i) the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;

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(ii)	any legal proceedings in which the Purchaser claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for the Purchaser; or
(iii)	the enforcement of any such settlement or judgment.

5.02	Without prejudice to any other rights and remedies available at any time to the Purchaser (including but not limited to any right to damages for any loss suffered by the Purchaser) the Purchaser may (if the effect of any breach of any Warranty is that the Company, or any of its assets, is worth less than its value would have been if there had been no such breach or that the Company is or will be under a liability or an increased or substituted liability which would not have subsisted if there had been no such breach) by notice to the Vendor require it to make good to the Company the diminution in the value of the asset or all loss occasioned by such liability or increased or substituted liability by a payment in cash to the relevant company or to pay to the Purchaser an amount equal to the diminution thereby caused in the value of the Sale Interest. If any such payment gives rise to a liability to Taxation on the part of the relevant company or the Purchaser as the recipient thereof, such payment shall be increased by such an amount as shall ensure that, after payment of such Taxation, the recipient shall have received an amount equal to the payment otherwise required hereby to be paid.
5.03	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Supplemental Agreement.
5.04	Any rights to which the Purchaser may be or become entitled by reason of any of the Warranties being untrue or misleading or breached and all remedies which may be available to the Purchaser in consequence of any of the Warranties being untrue or misleading or breached shall enure for the benefit of any associated company of the Purchaser which is the beneficial owner for the time being of any of the Sale Interest purchased by the Purchaser hereunder and accordingly any loss which is sustained by such beneficial owner for the time being of the Sale Interest in consequence of any of the Warranties being untrue or misleading or breached shall be deemed to be that of the Purchaser and the Purchaser may bring proceedings and exercise any other remedy on the footing that it has been the beneficial owner of the Sale Interest at all times from Completion.
5.05	The Vendor shall not be liable in respect of any breach of the Warranties after the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder (as defined under the Listing Rules) of the Vendor, except in respect of those matters which have been the subject of a claim made hereunder or in respect of those circumstances which may

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	give rise to a claim made hereunder and of which notice has been given to the Vendor on or prior to the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder of the Vendor.
5.06	The total liability of the Vendor under this Supplemental Agreement shall not exceed HK$381,767,378.
5.07	The Vendor shall have no liability under this Supplemental Agreement unless the aggregate amount of all valid claims which could otherwise be made under this Supplemental Agreement shall exceed HK$500,000.
5.08	The Vendor shall not be liable for breach of any Warranty to the extent that such liability arises by reason of any act or omission effected by the Purchaser or the Company after Completion (other than action taken by the Purchaser or on its behalf in establishing that any of the Warranties being untrue or misleading or breached) or by reason of any retrospective change in the law coming into force after the date hereof or to the extent such liability arises or is increased by an increase in rates of taxation after the date hereof with retrospective effect.
5.09	The Vendor hereby undertakes that it will from time to time and at any time prior to the earlier of (i) 31 August 2008; and (ii) the Purchaser ceasing to be the controlling shareholder of the Vendor, forthwith disclose in writing to the Purchaser any event, fact or circumstance which may become known to them after the date hereof and which is materially inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of any of the Sale Interest or which may entitle the Purchaser to make any claim under this Supplemental Agreement.
5.10	The Vendor shall not, and shall procure that the Company shall not, do or allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given.
5.11	It is hereby agreed between the parties hereto that no party will have the right to rescind this Supplemental Agreement.
5.12	The Vendor shall not (in the event of any claim being made against the Vendor in connection with the sale of the Sale Interest to the Purchaser) make any claim against the Company or against any director or employee of the Company on whom the Vendor may have relied before agreeing to any term of this Supplemental Agreement.
6.	CONDUCT OF BUSINESS PENDING COMPLETION

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6.01 The Vendor will procure that the Company shall not (save with the consent of the Purchaser), prior to Completion (or the termination of this Supplemental Agreement (whichever is earlier)):

(a)	do anything outside its ordinary course of business;
(b)	do anything which is not in accordance with its past practices; or
(c)	without prejudice of generality of Clauses 6.01(a) and 6.01(b), undertake any of the activities listed in Schedule 4.

7.	COSTS
7.01	Each party shall pay its own costs, stamp duty and capital duty in relation to the negotiations leading up to the sale and purchase of the Sale Interest and the preparation, execution and carrying into effect of this Supplemental Agreement and the transactions contemplated or referred to herein.
8.	FURTHER ASSURANCE
8.01	Each of the parties hereto undertakes to the other party that it will do all such acts and things and execute all such deeds and documents as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Supplemental Agreement and the transactions hereby contemplated.
9.	MISCELLANEOUS
9.01	Without prejudice to the provisions of this Supplemental Agreement stipulating that certain acts, obligations and/or events are to be performed or shall take place on a particular date or dates, any provision of this Supplemental Agreement which is capable of being performed after but which has not been performed at or before Completion and all warranties and indemnities and other undertakings contained in or entered into pursuant to this Supplemental Agreement shall remain in full force and effect notwithstanding Completion.
9.02	This Supplemental Agreement shall be binding on and enure for the benefit of the successors of each of the parties but shall not be assignable.
9.03	Any remedy conferred on any party hereto for breach of this Supplemental Agreement (including the breach of any Warranty) shall be in addition and without prejudice to all other rights and remedies available to it and the exercise of or failure to exercise any remedy shall not constitute a waiver by such party of any of its rights or remedies.

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9.04	This Supplemental Agreement constitutes the whole agreement between the parties relating to the transactions hereby contemplated (no party having relied on any representation or warranty made by any other party which is not a term of this Supplemental Agreement) and no future variation shall be effective unless made in writing and signed by each of the parties hereto.
9.05	If at any time any provision of this Supplemental Agreement is or becomes illegal, invalid or unenforceable in any respect, the remaining provisions hereof shall in no way be affected or impaired thereby.
10.	NOTICES
10.01	Any notice required or permitted to be given by or under this Supplemental Agreement may be given by delivering the same to the party in question by delivering it to such party in person or in the case of a body corporate by delivering it to its registered office for the time being or by sending it in a prepaid envelope by registered mail to the party concerned at its address shown in this Supplemental Agreement or to such other address in Hong Kong as the party concerned may have notified to the others in accordance with this Clause and any such notice shall be deemed to be served when the same would first be received at the address of the party to whom it is addressed in the normal course of such method of delivery.
11.	TIME OF THE ESSENCE
11.01	Time shall be of the essence of this Supplemental Agreement.
12.	GOVERNING LAW
12.01	The Original Agreement and this Supplemental Agreement shall be governed by and construed in accordance with the laws of the PRC and each party hereby submits to the non-exclusive jurisdiction of the courts of the PRC as regards any claim or matter arising under this Supplemental Agreement.
13.	PROCESS AGENTS
13.01	The Vendor hereby appoints its company secretary c/o Suite 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Supplemental Agreement and direct such service to Unit C, 17th Floor, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao and service on Ms. Eve Leung (or such substitute) shall be deemed to be service on the Vendor.

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13.02 The Purchaser hereby appoints its corporate secretary of Suite 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Supplemental Agreement and service on Mr. Kee Wong (or such substitute) shall be deemed to be service on the Purchaser.

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SCHEDULE 1

Details of the Company

Name	: Jetup Electronic (Shenzhen) Co., Ltd.
Date of incorporation	: 15 April 1993
Place of incorporation	: Shenzhen, PRC
Registered Office	:
Total Investment	: HK$225,400,000
Registered Capital	: HK$181,200,000
Paid Up Capital	: HK$181,200,000
Name of investor on the certificate of approval	: the Vendor
Directors	: Chui Kam Wai (Chairman)
	Yuen Lap Kei
	Yeoh Teck Hooi
	Koo Ming Kown
Auditors	: Deloitte Touche Tohmatsu
Financial year end	: 31 December

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SCHEDULE 2

Tenancies

A lease under a Factory and Dormitory Lease Contract dated 17 October 2003 made between the Company (as lessee) and (as lessor), supplemented by three supplemental contracts made between the said parties on 21 July 2004, 13 October 2004 and 1 May 2007, certain particulars of which are set out below:

Property :		certain factory premises, staff dormitory, canteen, escalators, restaurants located at (1)
Term:		commencing on 1 March 2004 and ending on 29 February 2012
Total rent :	RMB769,070 per month

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SCHEDULE 3

The Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of the Company that all the information contained in Schedules 1 and 2 is correct and:-

1.	The Sale Interest
(A)	The Vendor is the beneficial owner of the Sale Interest with full authority to sell and transfer the full legal and beneficial ownership of the Sale Interest registered in its name to the Purchaser.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Sale Interest or any part of the unissued share capital of the Company and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Sale Interest are fully paid up and rank pari passu in all respects with the existing issued shares of the Company.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in the Company.
2.	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of the Company produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of the Company have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of the Company.

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3.	Compliance with legal requirements
(A)	The Company is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with the Company concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the appropriate legislation to be filed with the appropriate regulatory bodies in the PRC or elsewhere where the Company operates (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions, and (e) directors and other officers.
(C)	There has been no material breach by the Company or any of its officers (in his capacity as such) of any legislation or regulations affecting it or its business.
4.	Accounts, bank accounts and borrowings
(A)	The Accounts show a true and fair view of the results of the Company for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of the Company as at such date, in each case on the basis stated therein.
(B)	The Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of the Company were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by the Company;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;
(iv)	give a true and fair view of the state of affairs and financial position of the Company at the Accounts Date and of the results of the Company for the financial period covered by the Accounts and the management financial information therein fairly represent the state of affairs and financial position of the Company for the period covered by the Accounts;

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(v) (including the management financial information therein) are not affected by any unusual or non-recurring items which are not disclosed in the Accounts.

(C)	The Company has no outstanding liability for Taxation of any kind which has not been provided for in the Accounts.
(D)	The Company has no outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital which has not been adequately disclosed or provided for in the Accounts.
(E)	The Company owns free from encumbrance all its undertaking and assets shown or comprised in the Accounts and all such assets are in its possession or under its control.
(F)	The Company does not hold any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which the Company is a party:-

(i)	there has been no contravention of or non-compliance with any provision or term of any of the arrangements;
(ii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iii)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(iv)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(v)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party, except the existing guarantees provided by the Vendor.

(H) The total amount borrowed by the Company :-

(i)	from its bankers does not exceed its financial facilities; and
(ii)	from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

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(I)	Having regard to the existing facilities available to the Company, the Company has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Accounts, the Company has not declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of the Company and the Company has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of the Company in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	the Company has not declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of the Company has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of the Company has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by the Company;
(vii)	no asset of the Company has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by the Company, and no contract involving expenditure by it of a capital nature has been entered into by the Company, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interest;
(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) by the Company in

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	circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;
(ix)	no event has occurred which gives rise to any liability for Taxation to the Company on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to the Company.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to the Company :-

(i)	any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);
(ii)	any agreements or arrangements to which the Company is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses (save and except for the existing incentive bonus share already disclosed to Purchaser);
(iii)	save and except for the compliance with the applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which the Company is under any actual or contingent liability in respect of :-

(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

(v) any contract to which the Company is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision

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	disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interest;
(vi)	any agreement entered into by the Company otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between the Company and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to the operation of the Company which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Sale Interest or of compliance with any other provision of this Supplemental Agreement; and
(viii)	any contract which materially restricts the freedom of the Company to carry on the business now carried on by it in any part of the world.

(B)	Neither the Company nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which the Company is a party or any approval or franchise granted by any governmental or regulatory bodies to the Company and which is material to the operation of the Company.
(C)	No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of the Company.
(D)	The Company is not under any obligation, nor is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	The Company is not a party to nor has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	The Company is not a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.
(G)	The Company has no outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.

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(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, the Company has not given any guarantee or warranty, or made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.
7.	Insurance
(A)	The Company has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against the Company by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	Neither the Company nor the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle any Company to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against the Company is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of the Company in respect of any act or default for which the Company might be vicariously liable.
9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of the Company.
(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of the Company.

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(C)	The Company has not stopped payment or is insolvent or unable to pay its debts.
(D)	No material unsatisfied judgment is outstanding against the Company.
(E)	No event analogous to any of the foregoing has occurred in or outside PRC in respect of the Company.
10.	Delinquent acts
	The Company has not committed nor is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. The Company has not received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of the Company.
11.	Tax returns
(A)	The Company has, in respect of all years of assessment since incorporation or establishment falling before the date of this Supplemental Agreement, made or caused to be made all proper returns, and has supplied or caused to be supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere if applicable ) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from the Company or regarding the availability to the Company of any relief from Taxation or duty.
(B)	The Company has sufficient records relating to past events during the six years prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	The Company has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Accounts.
12.	Stamp and other duties
	The Company has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by the Company under any such Ordinance, legislation or regulations.
13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against the Company exceeding the amount of HK$500,000.

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(B)	Full provision has been made in the Accounts for all and any compensation or severance payment for which the Company is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.
(C)	Save and except for compliance with the relevant statutory requirements, the Company is not paying, nor is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.
(D)	The Company has no outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.
(E)	No employee of the Company who is crucial to the operation of Jetup has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	The Company has not given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	The Company has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.
16.	Interests in companies, partnerships or joint ventures
(A)	The Company has no interest in the share capital of any company or in any partnership or joint venture.
(B)	The Company has not acted or carried on business in partnership with other person(s) or is a member of any corporate or unincorporated body, undertaking or associate.
17.	Tenancies
(A)	The Tenancies are all good, valid and subsisting and have in no way become void or voidable..

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(B)	All covenants, obligations, conditions and restrictions imposed upon the Company under the Tenancies have been duly and promptly observed and performed.
(C)	The agreements for the Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time.
(D)	No Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Supplemental Agreement.
18.	Intellectual property rights
(A)	To the best of the Company’s knowledge and belief, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Supplemental Agreement by the Company do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property or another person.
(B)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to the Company in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

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SCHEDULE 4

Restricted Action Pending Completion

The Vendor shall ensure that the Company shall not do nor agree (conditionally or unconditionally) to do any of the following (save with the consent of the Purchaser):

1.	dispose of, or grant any option or right of pre-emption in respect of, or acquire, any fixed asset of the Company with a net book value in excess of HK$200,000;
2.	enter into any transaction, agreement, contract or commitment or acquire or dispose of any interest in any asset (except in the ordinary course of business as carried on at the date of this Supplemental Agreement) or assume or incur, or agree to assume or incur, a liability, obligation or expense (actual or contingent) except in the ordinary course of business;
3.	enter into any joint venture, partnership or profit sharing agreements;
4.	create, extend, grant or issue any mortgage, charge, debenture, pledge, lien, encumbrance or other security or third party right (other than liens arising in the ordinary course of business) over any of the assets or the undertaking of the Company;
5.	create, extend or grant any guarantee, indemnity, performance bond or other security or contingent obligation in the nature of a financial obligation including letters of comfort or support, save in each case in respect of letters of credit and similar instruments, utility guarantees and otherwise in the ordinary course of business;
6.	create, allot or issue any shares, loan capital, securities convertible into shares or any option or right to subscribe in respect of any shares, loan capital or securities convertible into shares;
7.	declare, pay or make any dividend or distribution;
8.	incur any liability in the nature of a borrowing (other than by bank overdraft or other short term facility (including for the issuance of letters of credit and similar instruments) in the ordinary course of business within limits established by the relevant bank at the date of this Supplemental Agreement);
9.	make or agree to make or approve any capital commitment or approve any capital expenditure in excess of HK$200,000;
10.	allow any of its insurances to lapse or do anything to make any policy of insurance void or voidable or would or would be likely to, increase any premium payable in respect of such policy or prejudice the ability to effect equivalent insurance in the future;

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11.	alter the provisions of its Memorandum or Articles of Association or other constitutional documents or adopt or pass regulations or resolutions inconsistent with them;
12.	reduce the share capital of the Company;
13.	engage or dismiss other than for just cause any employee who is crucial to the operation of the Company or make any material variation to the terms and conditions of employment of any employee (other than indexation increases in salary in the ordinary course of business) or provide or agree to provide any gratuitous payment or benefit to any employee or any of their dependants;
14.	enter into, amend, terminate or dispose of any tenancy or lease agreement in respect of any property or acquire or dispose of any interest in any property;
15.	appoint any directors or secretaries;
16.	start any civil, criminal, arbitration or other proceedings;
17.	other than in the ordinary course of its business, not to settle, compromise, release, discharge or compound any civil, criminal, arbitration or other proceedings or any liability, claim, action, demand or dispute or waive any right in respect of the foregoing;
18.	pass any resolution in general meeting (other than any resolution constituting ordinary business conducted at an annual general meeting);
19.	make or issue any return or correspondence in connection with Taxation unless for the purpose of complying with the relevant regulatory requirements;
20.	change the accounting reference date of the Company; or
21.	make any change to the accounting procedures or principles by reference to which its accounts are drawn up.

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IN WITNESS whereof this Supplemental Agreement has been entered into the day and year first above written.

SIGNED by	)
	)	/s/ [signature illegible]
for and on behalf of	)
J.I.C. TECHNOLOGY COMPANY LIMITED	)
in the presence of:- /s/ [signature
illegible]
SIGNED by	)
	)	/s/ Koo Ming Kown
NAM TAI ELECTRONICS, INC.	)
for and on behalf of	)
in the presence of:- /s/ [signature	)
illegible]

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EX-4.39

Exhibit 4.39

DATED 28 NOVEMBER 2007

NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

and

J.I.C. TECHNOLOGY COMPANY LIMITED

AGREEMENT

supplemental to the agreement dated 5 October 2007
relating to the sale and purchase of the entire interest in
(1) Kabushiki Kaisha Namtek Japan; and
(2) Shenzhen Namtek Co., Ltd.

I N D E X

Clause		Page
1.	Interpretation		1
1A.	Agreement supplemental to the Original Agreement		5
2.	Sale and Purchase		5
3.	Conditions		6
4.	Completion		8
5.	Warranties		9
6.	Conduct of Business Pending Completion		11
7.	Costs		11
8.	Further Assurance		12
9.	Miscellaneous		12
10.	Notices		13
11.	Time of the Essence		13
12.	Governing Law		13
13.	Process Agents		13
Schedules
Schedule 1	Details of the Target Companies
	Part 1 — Namtek (Japan)		14
	Part 2 — Namtek (Shenzhen)		15
Schedule 2	Tenancies
	Part 1 — Namtek (Japan)		16
	Part 2 — Namtek (Shenzhen)		16
Schedule 3	Warranties		17
Schedule 4	Restricted Actions Pending Completion		27
Execution Clause			29

THIS SUPPLEMENTAL AGREEMENT is dated 28 November 2007 and is made

BETWEEN :-

(1)	NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Vendor”); and
(2)	J.I.C. TECHNOLOGY COMPANY LIMITED, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Purchaser”).

WHEREAS:-

(1)	By an agreement dated 24 September 2007 made between the Purchaser and Nam Tai Electronics., Inc. (“NTEI”) as supplemented and amended by a supplemental agreement dated 5 October 2007 made between the same parties (the “Original Jetup Agreement”), the Purchaser agreed to sell and NTEI agreed to purchase 91% interest in Jetup Electronic (Shenzhen) Co., Ltd. (“Jetup”).
(2)	By an agreement dated 5 October 2007 made between the Vendor and the Purchaser (the “Original Agreement”), the Vendor agreed to sell and the Purchaser agreed to purchase the entire interest in Namtek (Japan) (as defined hereinafter) and Namtek (Shenzhen) (as defined hereinafter), subject to certain conditions precedent, including, inter alia, completion of the Original Jetup Agreement becoming unconditional in all respects (the “Original Transaction”).
(3)	The Purchaser and NTEI entered into a supplemental agreement to the Original Jetup Agreement on 28 November 2007 whereby the Purchaser agreed to sell and NTEI agreed to purchase the entire equity interest in Jetup.
(4)	The Vendor and the Purchaser now wish to enter into this Supplemental Agreement to make amendments to the Original Agreement to reflect the change of certain aspects of the Original Transaction.

NOW IT IS HEREBY AGREED as follows:-

1.	INTERPRETATION
1.01	In this Supplemental Agreement unless the context otherwise requires:-

(a) the following expressions shall have the following meanings:

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Expression	Meaning
“Accounts”	the audited financial statements of each of the Target Companies in respect of each of the three financial years ended on 31 December 2006 and of the six months ended on 30 June 2007
“Accounts Date”	30 June 2007
“Business Day”	means a day other than a Saturday or Sunday, on which banks are open in Hong Kong to the general public for business
“Companies Ordinance”	the Companies Ordinance (Chapter 32, as amended from time to time, of the Laws of Hong Kong)
“Completion”	completion of the sale and purchase of the Sale Interests in accordance with the terms and conditions of this Supplemental Agreement
“Completion Date”	the date on which Completion occurs
“Conditions”	the conditions set out in Clause 3.01
“Consideration”	HK$80,500,000, the consideration for the sale of the Namtek (Japan) Sale Interest and the Namtek (Shenzhen) Sale Interest as referred to in Clause 2.02
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China
“Intellectual Property”	(a)   patents, trade marks, service marks, registered designs, applications for any of those rights, trade and business names (including internet domain names and e-mail address names), unregistered trade marks and service marks, copyrights, database rights, know-how, rights in designs and inventions;
	(b)   rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); and
	(c)   rights of the same or similar effect or nature as or to those in paragraphs (a) and (b),

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Expression	Meaning
	in each case in any part of the world
“Jetup Agreement”	an agreement dated 24 September 2007 made between the Purchaser (as vendor) and Nam Tai Electronics., Inc. (as purchaser) relating to the sale and purchase of 91% interest in Jetup Electronic (Shenzhen) Co., Ltd. , as supplemented and amended by two supplemental agreements dated 5 October 2007 and 28 November 2007 respectively made between the same parties
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“Namtek (Japan)”	Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Company Limited), a company incorporated in Japan and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Part 1 of Schedule 1
“Namtek (Japan) Sale Interest”	the entire interest in Namtek (Japan) legally and beneficially owned by the Vendor
“Namtek (Japan) Tenancies”	the tenancies and sub-tenancies where Namtek (Japan) is the lessor or the lessee, particulars of which are set out in Part 1 of Schedule 2
“Namtek (Shenzhen)”	Shenzhen Namtek Co., Ltd., a company incorporated in the PRC and a wholly owned subsidiary of the Vendor, certain basic information of which is set out in Part 2 of Schedule 1
“Namtek (Shenzhen) Sale Interest”	the entire interest in Namtek (Shenzhen) legally and beneficially owned by the Vendor
“Namtek (Shenzhen) Tenancies”	the tenancies and sub-tenancies where Namtek (Shenzhen) is the lessor or the lessee, particulars of which are set out in Part 2 of Schedule 2
“PRC”	the People’s Republic of China and, for the purposes of this Supplemental Agreement, excluding Hong Kong, Macau and Taiwan

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Expression	Meaning
“Sale Interests”	the Namtek (Japan) Sale Interest and Namtek (Shenzhen) Sale Interest
“Stamp Duty Ordinance”	the Stamp Duty Ordinance (Chapter 117, as amended from time to time, of the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target Companies”	Namtek (Japan) and Namtek (Shenzhen)
“Taxation”	(i) any liability to any form of taxation whenever created or imposed and whether of Japan, the PRC or of any other part of the world and without prejudice to the generality of the foregoing includes profits tax, provisional profits tax, interest tax, salaries tax, property tax, estate duty, death duty, capital duty, stamp duty, payroll tax, withholding tax, rates, customs and excise duties and generally any tax, duty, impost, levy or rate or any amount payable to the revenue, customs or fiscal authorities whether of Japan, the PRC or of any other part of the world;
	(ii) such an amount or amounts as is referred to in sub-clause (i) above; and
	(iii) all costs, interest, penalties, charges, fines and expenses incidental or relating to the liability to taxation or the loss, reduction, modification, cancellation or deprivation of relief or of a right to repayment of the taxation
“Warranties”	the representations, warranties and undertakings set out in Schedule 3
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“JPY”	Japanese yen, the lawful currency of Japan
“RMB”	Renminbi, the lawful currency of the PRC
“US$”	the United States dollars, the lawful currency of the United States of America

(b) words and expressions defined in the Companies Ordinance shall bear the same respective meanings herein;

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(c)	reference to any statute or statutory provision shall include any statute or statutory provision which amends or replaces, or has amended or replaced, it shall include any subordinate legislation made under the relevant statute;
(d)	a body corporate shall be deemed to be associated with another body corporate if it is a holding company or a subsidiary of that other body corporate or a subsidiary of a holding company of that body corporate;
(e)	references to Clauses and sub-clauses and Schedules are to Clauses and sub-clauses of and Schedules to this Supplemental Agreement;
(f)	references to writing shall include typewriting, printing, lithography, photography, telecopier, telex and electronic messages and any mode of reproducing words in a legible and non-transitory form;
(g)	words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporate.

1.02	Headings are for convenience only and shall not affect the construction of this Supplemental Agreement.
1.03	In construing this Supplemental Agreement:-

(a)	the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
(b)	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

1.04	The Schedules form part of this Supplemental Agreement and shall have the same force and effect as if expressly set out in the body of this Supplemental Agreement and any reference to this Supplemental Agreement shall include the Schedules.
1A.	AGREEMENT SUPPLEMENTAL TO THE ORIGINAL AGREEMENT
1A.01	This Supplemental Agreement shall supplement and be read in conjunction with the Original Agreement; however where any provision in this Supplemental Agreement is inconsistent with any provision in the Original Agreement, this Supplemental Agreement shall prevail.
2.	SALE AND PURCHASE

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2.01	On the terms set out in this Supplemental Agreement, the Vendor as beneficial owner shall sell the Sale Interests to the Purchaser free from all liens, charges, encumbrances, equities and adverse interests and with all rights attached or accruing thereto at the date hereof (including the right to receive all dividends and other distributions declared, made or paid on or after the date hereof) and the Purchaser relying on the representations, warranties, undertakings and indemnities of the Vendor contained or referred to herein shall purchase the Sale Interests at Completion.
2.02	The consideration for the sale of the Sale Interests is the sum of HK$HK$80,500,000 (comprising HK$654,333 for the sale of Namtek (Japan) Sale Interest and HK$79,845,667 for the sale of the Namtek (Shenzhen) Sale Interest), which shall be payable by the Purchaser to the Vendor in cash.
3.	CONDITIONS
3.01	Completion is conditional upon the following conditions being satisfied on or before 31 December 2007 or such other date as otherwise agreed by the parties hereto (the “Longstop Date”):

(a)	the obtaining in terms acceptable to the Purchaser, of all consents, approvals, clearances and authorisations of any relevant governmental authorities or other relevant third parties in Japan, the PRC or any other part of the world as may be necessary for the execution and implementation of this Supplemental Agreement;
(b)	the Target Companies receiving all relevant consents and approvals from third parties as may be necessary in connection with the proposed change in shareholding of the Target Companies so as to ensure that the Target Companies maintains all its existing contractual and other rights following the transfer of the Sale Interests (including, without limitation, the consent of the existing bankers of the Target Companies to continue to provide the existing banking facilities to the Target Companies following the transfer of the Sale Interests);
(c)	the passing at an extraordinary general meeting of the Vendor of ordinary resolution(s) approving this Supplemental Agreement and the transactions contemplated by this Supplemental Agreement by the shareholders of the Vendor (excluding such shareholders who shall be required to abstain from voting under the Listing Rules);
(d)	the passing at an extraordinary general meeting of the Purchaser of ordinary resolution(s) approving this Supplemental Agreement and the transactions contemplated by this Supplemental Agreement by the shareholders of the Purchaser (excluding such shareholders who shall be required to abstain from voting under the Listing Rules); and
(e)	completion of the Jetup Agreement becoming unconditional in all respects

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(save in respect of any condition relating to completion of this Supplemental Agreement).

3.02	The Vendor will use all reasonable endeavours (so far as it lies within its powers) to procure the satisfaction of the Conditions as soon as reasonably practicable and in any event before the Longstop Date and will promptly notify the Purchaser when each of the said Conditions have been satisfied.
3.03    (a)	If at any time the Vendor becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it will immediately inform the Purchaser.
(b)	If at any time the Purchaser becomes aware of a fact or circumstance that might prevent a condition being satisfied, it will immediately inform the Vendor.
3.04	If any of the Conditions have not been satisfied on or before the Longstop Date then this Supplemental Agreement will immediately terminate and all rights and obligations of the parties shall cease immediately upon termination.
3.05	For avoidance of doubt, the Purchaser agrees and acknowledges that the formal registration documents to be issued by the relevant PRC governmental authorities evidencing the Purchaser (or the SPV (as defined in Clause 3.06)) as the sole investor of Namtek (Shenzhen) (the “Namtek (Shenzhen) Approval Documents”) may not be available at Completion and that the absence of the Namtek (Shenzhen) Approval Documents shall not prevent this Supplemental Agreement becoming unconditional nor the parties proceeding to Completion PROVIDED that (1) the Vendor can produce an undertaking from the Vendor to the Purchaser that it will use its best endeavours to procure the issuance of the Namtek (Shenzhen) Approval Documents; and that (2) the Vendor hereby agrees and acknowledges that the Namtek (Shenzhen) Sale Interest shall be so held on trust for the benefits of the Purchaser (or the SPV) from Completion until the issuance of the Namtek (Shenzhen) Approval Documents.
3.06	The Purchaser may request the Vendor to procure the transfer of the Namtek (Shenzhen) Sale Interest to a holding company (“SPV”) prior to Completion, in which case the Vendor shall also deliver to or to the order of the Purchaser at Completion pursuant to Clause 4.01(b) evidence satisfactory to the Purchaser that good title to the entire equity capital of the SPV has been passed to the Purchaser and the Purchaser has been registered as the holder thereof.

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4	COMPLETION
4.01	Completion of the sale and purchase of the Sale Interests shall take place on the fifth Business Day following satisfaction or waiver of the Conditions, or such other date as the Vendor and the Purchaser may agree in writing at Unit A, 17/F, Edificio Comercial Rodrigues, 599 Da Avenida Da Praia Grande, Macao when all (but not part only) of the following business shall be transacted:-

(a) in respect of the sale and purchase of the Namtek (Japan) Sale Interest, the Vendor shall deliver to or to the order of the Purchaser

(i)

a copy of such documents and take such actions as have been required (including but not limited to the obtaining of all approvals of the relevant governmental authorities in Japan) to give a good title to the Namtek (Japan) Sale Interest and to enable the Purchaser to be registered as the holder thereof;

(ii)

if so required by the Purchaser, (aa) all statutory and minute books (which shall be written up to but not including the Completion Date), certificate of incorporation, certificate of incorporation on change of name (if any), certificate of business registration and common seal of Namtek (Japan); and (bb) all books and accounts and other records of Namtek (Japan), title deeds, leases, tenancy agreements and other documents relating to any properties owned, leased and/or occupied by Namtek (Japan) (except where such documents are held by a third party pursuant to any mortgage or other security arrangements) and all other documents and records of Namtek (Japan);

(b) in respect of the sale and purchase of the Namtek (Shenzhen) Sale Interest, the Vendor shall deliver to or to the order of the Purchaser

(i)

evidence satisfactory to the Purchaser that a good title to the Namtek (Shenzhen) Sale Interest has been passed to the Purchaser and the Purchaser has been registered as the holder thereof (including but not limited to the Namtek (Shenzhen) Approval Documents), or if Clause 3.05 is applicable, the documents referred to therein;; and

(ii)

if so required by the Purchaser, (aa) all statutory and minute books (which shall be written up to but not including the Completion Date) and company seal of Namtek (Shenzhen) (and the SPV, if applicable); and (bb) all books and accounts and other records of Namtek (Shenzhen) (and the SPV, if applicable) , title deeds, leases, tenancy agreements and other documents relating to any properties owned, leased and/or occupied by Namtek (Shenzhen) (and the SPV, if applicable) (except where such documents are held by a third party pursuant to any mortgage or other security arrangements) and all

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other documents and records of Namtek (Shenzhen) (and the SPV, if applicable); and

(c) the Purchaser shall pay the Consideration to the Vendor, unless the parties hereto agree otherwise.

4.02	No party shall be obliged to complete this Supplemental Agreement or perform any obligations under Clause 4.01 unless the other party demonstrates that it is able to comply fully with the requirements of Clause 4.01 simultaneously.
5	WARRANTIES
5.01	The Vendor hereby:-

(a)

represents, warrants and undertakes to the Purchaser that each of the Warranties set out in Schedule 3 is true and accurate in all respects and is not misleading and accept that the Purchaser is entering into this Supplemental Agreement in reliance upon each of the Warranties notwithstanding any investigations which the Purchaser or any of its directors, officers, employees, agents or advisors may have made and notwithstanding any information regarding the Target Companies which may otherwise have come into the possession of any of the foregoing;

(b)

undertakes to indemnify the Purchaser against all claims, liabilities, losses, costs and expenses the Purchaser may suffer or incur or which may be made against the Purchaser either before or after the commencement of and arising out of, or in respect of, any action in connection with :-

(i)	the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;
(ii)	any legal proceedings in which the Purchaser claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for the Purchaser; or
(iii)	the enforcement of any such settlement or judgment.

5.02 Without prejudice to any other rights and remedies available at any time to the Purchaser (including but not limited to any right to damages for any loss suffered by the Purchaser), the Purchaser may (if the effect of any breach of any Warranty is that any of the Target Companies, or any of its assets, is worth less than its value would have been if there had been no such breach or that any of the Target Companies is or will be under a liability or an increased or substituted liability which would not have subsisted if there had been no such breach) by notice to the Vendor require it to make good to the relevant company the diminution in the value of the asset or all loss occasioned by such liability or increased or

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	substituted liability by a payment in cash to the relevant company or to pay to the Purchaser an amount equal to the diminution thereby caused in the value of the Sale Interests. If any such payment gives rise to a liability to Taxation on the part of the relevant company or the Purchaser as the recipient thereof, such payment shall be increased by such an amount as shall ensure that, after payment of such Taxation, the recipient shall have received an amount equal to the payment otherwise required hereby to be paid.
5.03	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Supplemental Agreement.
5.04	Any rights to which the Purchaser may be or become entitled by reason of any of the Warranties being untrue or misleading or breached and all remedies which may be available to the Purchaser in consequence of any of the Warranties being untrue or misleading or breached shall enure for the benefit of any associated company of the Purchaser which is the beneficial owner for the time being of any of the Sale Interests purchased by the Purchaser hereunder and accordingly any loss which is sustained by such beneficial owner for the time being of the Sale Interests in consequence of any of the Warranties being untrue or misleading or breached shall be deemed to be that of the Purchaser and the Purchaser may bring proceedings and exercise any other remedy on the footing that it has been the beneficial owner of the Sale Interests at all times from Completion.
5.05	The Vendor shall not be liable in respect of any breach of the Warranties after the earlier of (i) 31 August 2008; and (ii) NTEI ceasing to be the controlling shareholder (as defined under the Listing Rules) of the Vendor, except in respect of those matters which have been the subject of a claim made hereunder or in respect of those circumstances which may give rise to a claim made hereunder and of which notice has been given to the Vendor on or prior to the earlier of (i) 31 August 2008; and (ii) NTEI ceasing to be the controlling shareholder of the Vendor.
5.06	The total liability of the Vendor under this Supplemental Agreement shall not exceed HK$80,500,000.
5.07	The Vendor shall have no liability under this Supplemental Agreement unless the aggregate amount of all valid claims which could otherwise be made under this Supplemental Agreement shall exceed HK$500,000.
5.08	The Vendor shall not be liable for breach of any Warranty to the extent that such liability arises by reason of any act or omission effected by the Purchaser or any of the Target Companies after Completion (other than action taken by the Purchaser or on its behalf in establishing that any of the Warranties being untrue or misleading or breached) or by reason of

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	any retrospective change in the law coming into force after the date hereof or to the extent such liability arises or is increased by an increase in rates of taxation after the date hereof with retrospective effect.
5.09	The Vendor hereby undertakes that it will from time to time and at any time prior to the earlier of (i) 31 August 2008; and (ii) NTEI ceasing to be the controlling shareholder of the Vendor, forthwith disclose in writing to the Purchaser any event, fact or circumstance which may become known to them after the date hereof and which is materially inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of any of the Sale Interests or which may entitle the Purchaser to make any claim under this Supplemental Agreement.
5.10	The Vendor shall not, and shall procure that none of the Target Companies shall, do or allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given.
5.11	It is hereby agreed between the parties hereto that no party will have the right to rescind this Supplemental Agreement.
5.12	The Vendor shall not (in the event of any claim being made against the Vendor in connection with the sale of the Sale Interests to the Purchaser) make any claim against any of the Target Companies or against any director or employee of any of the Target Companies on whom the Vendor may have relied before agreeing to any term of this Supplemental Agreement.
6.	CONDUCT OF BUSINESS PENDING COMPLETION
6.01	The Vendor will procure that none of the Target Companies shall (save with the consent of the Purchaser), prior to Completion (or the termination of this Supplemental Agreement (whichever is earlier)):

(a)	do anything outside its ordinary course of business;
(b)	do anything which is not in accordance with its past practices; or
(c)	without prejudice of generality of Clauses 6.01(a) and 6.01(b), undertake any of the activities listed in Schedule 4.

7.	COSTS
7.01	Each party shall pay its own costs, stamp duty and capital duty in relation to the negotiations leading up to the sale and purchase of the Sale Interests and the preparation, execution and carrying into effect of this

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	Supplemental Agreement and the transactions contemplated or referred to herein.
8.	FURTHER ASSURANCE
8.01	Each of the parties hereto undertakes to the other party that it will do all such acts and things and execute all such deeds and documents as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Supplemental Agreement and the transactions hereby contemplated.
9.	MISCELLANEOUS
9.01	Without prejudice to the provisions of this Supplemental Agreement stipulating that certain acts, obligations and/or events are to be performed or shall take place on a particular date or dates, any provision of this Supplemental Agreement which is capable of being performed after but which has not been performed at or before Completion and all warranties and indemnities and other undertakings contained in or entered into pursuant to this Supplemental Agreement shall remain in full force and effect notwithstanding Completion.
9.02	This Supplemental Agreement shall be binding on and enure for the benefit of the successors of each of the parties but shall not be assignable.
9.03	Any remedy conferred on any party hereto for breach of this Supplemental Agreement (including the breach of any Warranty) shall be in addition and without prejudice to all other rights and remedies available to it and the exercise of or failure to exercise any remedy shall not constitute a waiver by such party of any of its rights or remedies.
9.04	This Supplemental Agreement constitutes the whole agreement between the parties relating to the transactions hereby contemplated (no party having relied on any representation or warranty made by any other party which is not a term of this Supplemental Agreement) and no future variation shall be effective unless made in writing and signed by each of the parties hereto.
9.06	If at any time any provision of this Supplemental Agreement is or becomes illegal, invalid or unenforceable in any respect, the remaining provisions hereof shall in no way be affected or impaired thereby.

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10.	NOTICES
10.01	Any notice required or permitted to be given by or under this Supplemental Agreement may be given by delivering the same to the party in question by delivering it to such party in person or in the case of a body corporate by delivering it to its registered office for the time being or by sending it in a prepaid envelope by registered mail to the party concerned at its address shown in this Supplemental Agreement or to such other address in Hong Kong as the party concerned may have notified to the others in accordance with this Clause and any such notice shall be deemed to be served when the same would first be received at the address of the party to whom it is addressed in the normal course of such method of delivery.
11.	TIME OF THE ESSENCE
11.01	Time shall be of the essence of this Supplemental Agreement.
12.	GOVERNING LAW
12.01	The Original Agreement and this Supplemental Agreement shall be governed by and construed in accordance with the laws of the PRC and each party hereby submits to the non-exclusive jurisdiction of the courts of the PRC as regards any claim or matter arising under the Original Agreement and this Supplemental Agreement.
13.	PROCESS AGENTS
13.01	The Vendor hereby appoints its company secretary of Suites 1506-08, One Exchange Square, 8 Connaught Road, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Supplemental Agreement and service on its company secretary (or such substitute) shall be deemed to be service on the Vendor.
13.02	The Purchaser hereby appoints its company secretary of Suites 1506-08, One Exchange Square, 8 Connaught Road, Central, Hong Kong (or such other person, being resident or incorporated in Hong Kong, as it may by notice to the other party hereto substitute) to accept service of all legal process arising out of or connected with this Supplemental Agreement and service on its company secretary (or such substitute) shall be deemed to be service on the Purchaser.

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SCHEDULE 1

Details of the Target Companies

Part 1 — Namtek (Japan)

Name	:	Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Co., Ltd.)
Date of incorporation	:	30 June 2003
Place of incorporation	:	Japan
Head office	:	Chuo-ku, Tokyo, Japan
Total number of shares which	:	500,000 shares
Namtek (Japan) is authorised to issue
Total number of shares	:	100,000 shares of JPY 100
issued as at the date hereof
Directors	:	Kazuhiro Asano
		Toshiaki Sunahara
		Koo Ming Kown
		Lei Lai Fong, Patinda
		Wong Kuen Ling, Karene
Accountant	:	Sakuma CPA
Financial year end	:	31 December

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Part 2 — Namtek (Shenzhen)

Chinese Name	:
English Name		Shenzhen Namtek Co., Ltd.
Date of incorporation	:	20 December 1995
Place of incorporation	:	PRC
Registered Office	:
Total Investment	:	US$1 million
Registered Capital	:	US$800,000
Paid Up Capital	:	US$800,000
Name of investor on the	:	the Vendor
certificate of approval
Directors	:	Kazuhiro Asano
		Koo Ming Kown
		Liu Xue Qing
		Wong Kuen Ling, Karene
Auditors	:	Deloitte Touche Tohmatsu
Financial year end	:	31 December

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SCHEDULE 2

Tenancies

Part 1 — Namtek (Japan) Tenancies

1. A lease under a lease agreement dated 30 June 2003 made between Sakura-Masamune Co., Ltd. (as lessor) and Kabushiki Kaisha Namtek Japan (as lessee), certain particulars of which are set out below:

Property :	Sakura-Masamune Higashi Nihonbashi Building, 3-12-12 Higashi-Nihonbashi, Chuo-Ku, Tokyo, Japan
Term:	commencing on 1 July 2007 and ending on 30 June 2009
Rent:	JPY 203,360 per month

Part 2 — Namtek (Shenzhen) Tenancies

2. A lease under a lease contract signed by (as lessor) and Shenzhen Namtek Co., Ltd.(as lessee) on 8 August 2007, certain particulars of which are set out below:

Property:	the whole floor of C12
Term:	commencing on 20 July 2007 and ending on 19 July 2008
Rent:	RMB 70,150 per month

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SCHEDULE 3

The Namtek (Japan) and the Namtek (Shenzhen) Warranties

The Vendor hereby warrants and represents to and undertakes with the Purchaser in respect of the Target Companies that all the information contained in Schedules 1 and 2 is correct and:-

1.	The Sale Interests
(A)	The Vendor is the beneficial owner of the Sale Interests with full authority to sell and transfer the full legal and beneficial ownership of the Sale Interests registered in its name to the Purchaser.
(B)	There is no option, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Sale Interests or any part of the unissued share capital of any of the Target Companies and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing which has not been waived in its entirety or satisfied in full.
(C)	The Sale Interests are fully paid up and rank pari passu in all respects with the existing issued shares of each of the Target Companies.
(D)	There is no agreement or commitment outstanding which calls for the allotment or issue of or accords to any person the right to call for the allotment or issue of any shares or debentures in any of the Target Companies.
2.	Accuracy and adequacy of information
(A)	The copy of the memorandum and articles of association or other constitutional documents of the Target Companies produced to the Purchaser is complete and accurate in all respects, has attached to it copies of all resolutions and other documents required by law to be so attached and fully sets out the rights and restrictions attaching to each class of share capital of the relevant company.
(B)	All the accounts, books, ledgers and financial and other records of whatsoever kind including statutory books of the Target Companies have been properly kept in accordance with normal business practice and are in its possession or under its control and all transactions relating to its business have been duly and correctly recorded therein, and there are at the date hereof no material inaccuracies or discrepancies of any kind contained or reflected in such accounts, books, ledgers and financial and other records and at the date hereof they give and reflect a true and fair view of the financial, contractual and trading position of the Target Companies.
3.	Compliance with legal requirements

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(A)	Each of the Target Companies is duly incorporated and validly existing under the law of its place of incorporation or establishment.
(B)	Compliance has been made in all material respects with all legal and procedural requirements and other formalities in connection with each of the Target Companies concerning (a) its memorandum and articles of association or other constitutional documents (including all resolutions passed or purported to have been passed) (b) the filing of all documents required by the appropriate legislation to be filed with the appropriate regulatory bodies in Japan, the PRC or elsewhere where the Target Companies operate (c) issues of shares debentures or other securities (if any) (d) payments of interest and dividends and making of other distributions, and (e) directors and other officers.
(C)	There has been no material breach by any of the Target Companies or any of their respective officers (in his capacity as such) of any legislation or regulations affecting them or their businesses.
4.	Accounts, bank accounts and borrowings
(A)	The Accounts show a true and fair view of the results of each of the Target Companies for the three financial years and the six months ended on the Accounts Date and of the assets and liabilities of the Target Companies as at such date, in each case on the basis stated therein.
(B)	The Accounts:-

(i)	comply with the requirements of all applicable legislation;
(ii)	were prepared on the same basis and in accordance with the same accounting policies as the audited accounts of the Target Companies were prepared in the preceding three years and six months and in accordance with accounting practices generally accepted in the place of preparation of such accounts at the time they were audited and commonly adopted by companies carrying on businesses similar to that carried on by the Target Companies;
(iii)	(including the management financial information therein) are complete and accurate in all material respects and in particular make full provision for all bad and doubtful debts and established liabilities and make proper provision for (or contain a note in accordance with good accounting practice respecting) all deferred or contingent liabilities (whether liquidated or unliquidated) at the date thereof;
(iv)	give a true and fair view of the state of affairs and financial position of the Target Companies at the Accounts Date and of the results of the Target Companies for the financial period covered by the Accounts and the management financial information therein fairly represent the state of affairs and financial position of the Target Companies for the period covered by the Accounts;

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(v) (including the management financial information therein) are not affected by any unusual or non-recurring items which are not disclosed in the Accounts.

(C)	None of the Target Companies has any outstanding liability for Taxation of any kind which has not been provided for in the Accounts.
(D)	None of the Target Companies has any outstanding capital commitment nor is engaged in any scheme or project requiring the expenditure of capital (other than in the ordinary course of business) which has not been adequately disclosed or provided for in the Accounts.
(E)	Each of the Target Companies owns free from encumbrance all its undertaking and assets shown or comprised in the Accounts and all such assets are in its possession or under its control.
(F)	None of the Target Companies holds any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.
(G)	In relation to all financing arrangements to which any of the Target Companies is a party:-

(i)	there has been no contravention of or non-compliance with any provision or term of any of the arrangements;
(ii)	no steps for the enforcement of any encumbrances have been taken or threatened;
(iii)	there has not been any alteration in the terms and conditions of any of the said arrangements all of which are in full force and effect;
(iv)	nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced; and
(v)	none of the arrangements is dependent on the guarantee of or on any security provided by a third party, except the existing guarantees provided by the Vendor (if any).

(H) The total amount borrowed by each of the Target Companies :-

(i)	from its bankers does not exceed its financial facilities; and
(ii)	from whatsoever source does not exceed any limitation on borrowing contained in the relevant articles of association or any other constitutional document binding on it.

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(I)	Having regard to the existing facilities available to the Target Companies, each of the Target Companies has sufficient working capital for the purpose of continuing to carry on its businesses in their present form and at present levels of turnover and for the purposes of carrying out and fulfilling in accordance with their terms all orders, projects and other contractual obligations which have been placed with or undertaken by the relevant company.
(J)	Save as disclosed in the Accounts, none of the Target Companies have declared, paid or made any dividend or other distribution.
5.	Events since the Accounts Date
	Since the Accounts Date:-
(i)	there has been no material adverse change in the financial condition or prospects of the Target Companies and each of the Target Companies has entered into transactions and incurred liabilities only in the ordinary course of trading;
(ii)	no resolution of the Target Companies in general meeting has been passed other than resolutions relating to the ordinary business of an annual general meeting;
(iii)	none of the Target Companies have declared, paid or made nor is proposing to declare, pay or make any dividend or other distribution;
(iv)	the financial year end of each of the Target Companies has not been changed;
(v)	no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;
(vi)	the business of each of the Target Companies has been carried on in the ordinary and usual course of its business and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been unusually written down nor any debt written off, and no unusual or abnormal contract has been entered into by any of the Target Companies;
(vii)	no asset of the Target Companies has been acquired or disposed of a capital nature, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by any of the Target Companies, and no contract involving expenditure by it of a capital nature has been entered into by any of the Target Companies, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on), the disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interests;
(viii)	there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring

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	or licensing of any property whether tangible or intangible) by any of the Target Companies in circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for tax purposes wherever applicable;
(ix)	no event has occurred which gives rise to any liability for Taxation to any of the Target Companies on deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear any liability for Taxation directly or primarily chargeable against or attributable to another person, firm or company; and
(x)	such of the accounts receivables shown in the Accounts and all other accounts receivables arising since such time which have been realised since the Accounts Date have been realised at amounts not less than those shown in the Accounts or, in the case of subsequently arising accounts receivables, their face amount, and no indication has been received that any receivables now owing to the Target Companies.
6.	Contracts, commitments and financial and other arrangements
(A)	There are not outstanding, nor will there be outstanding at Completion with respect to each of the Target Companies :-

(i)	any contracts of service with directors or employees which cannot be terminated by six months’ notice or less or (where not reduced to writing) by reasonable notice without giving rise to any claim for damages or compensation (other than a statutory redundancy payment);
(ii)	any agreements or arrangements to which any of the Target Companies is a party for profit sharing, share incentives, share options, incentive payments or payment to employees of bonuses (save and except for the existing incentive bonus share already disclosed to Purchaser);
(iii)	save and except for the compliance with the applicable regulatory requirements, any obligation or arrangement to pay any pension, gratuity, retirement annuity or benefit or any similar obligation or arrangement in favour of any person;
(iv)	any agreement (whether by way of guarantee indemnity warranty representation or otherwise) under which any of the Target Companies is under any actual or contingent liability in respect of :-

(a)	any disposal of its assets or business or any part thereof except such as are usual in the ordinary and proper course of its normal day to day trading as carried on at the date hereof; or
(b)	the obligations of any other person;

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(v)	any contract to which any of the Target Companies is a party which is of a long-term and non-trading nature or contains any unusual or unduly onerous provision disclosure of which could reasonably be expected to influence the decision of a purchaser for value of any or all of the Sale Interests;
(vi)	any agreement entered into by any of the Target Companies otherwise than by way of bargain at arm’s length;
(vii)	any material arrangements (contractual or otherwise) between any of the Target Companies and any party or any approvals or franchise granted by any governmental or regulatory bodies to and which are material to its operation which will or may be terminated, withdrawn or materially and prejudicially affected as a result of the sale of the Sale Interests or of compliance with any other provision of this Supplemental Agreement; and
(viii)	any contract which materially restricts its freedom to carry on the business now carried on by it in any part of the world.

(B)	None of the Target Companies nor the Vendor is aware of any breach of or the invalidity, or grounds for determination, rescission, avoidance or repudiation, of any material agreement or arrangement to which any of the Target Companies is a party or any approval or franchise granted by any governmental or regulatory bodies to any of the Target Companies and which is material to the operation of any of the Target Companies.
(C)	No charges, rights of security or third party rights of any kind whatsoever have been created or agreed to be created or permitted to arise over any of the assets of the Target Companies.
(D)	None of the Target Companies is under any obligation, nor is a party to any contract, which cannot readily be fulfilled or performed by it on time and without undue or unusual expenditure of money or effort.
(E)	None of the Target Companies is a party to nor has any liability (present or future) under any loan agreement, debenture, guarantee, indemnity or letter of credit or leasing, hiring, hire purchase, credit sale or conditional sale agreement nor has it entered into any contract or commitment involving, or likely to involve, obligations or expenditure of an unusual or exceptional nature or magnitude.
(F)	None of the Target Companies is a party to any agency, distributorship or management agreement or to any contract or arrangement which restricts its freedom to carry on any business which it is authorised to do by its memorandum of association and which is permitted by law in any part of the world in such manner as it thinks fit.

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(G)	None of the Target Companies has any outstanding bid or tender or sale or service proposal which is material in relation to its business and which, if accepted, would be likely to result in a loss to it.
(H)	Save for any guarantee or warranty implied by law or otherwise in the usual and ordinary course of its business and on normal commercial terms, none of the Target Companies has given any guarantee or warranty, nor made any representation, in respect of goods or services supplied or contracted to be supplied by it or accepted any liability or obligation that would apply after any such goods or services had been supplied by it.
7.	Insurance
(A)	Each of the Target Companies has effected and maintains valid policies of insurance in an amount and to the extent that it is usual to do so in the business carried on by it and in the area in which such businesses are carried on. All premiums due in respect of such policies of insurance have been paid in full and all the other material conditions of the said policies have been performed and observed in full. Nothing has been done or omitted to be done whereby any of the said policies has or may become void or voidable and none of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the usual rate.
(B)	No material claim is outstanding either by the insurer or the insured under any of the said policies and no claim against any of the Target Companies by any third party is outstanding in respect of any risk covered by any of the policies or by any policy previously held by the relevant company.
(C)	None of the Target Companies nor the Vendor (having made all reasonable enquiries) is aware of any circumstances which would or might entitle any Company to make a claim under any of the said policies or which would or might be required under any of the said policies to be notified to the insurers.
8.	Litigation
	No significant litigation or arbitration, administrative or criminal or other proceedings against any of the Target Companies is pending, threatened or expected and so far as the Vendor (having made all reasonable enquiries) is aware, there is no fact or circumstance likely to give rise to any such litigation or arbitration, administrative or criminal or other proceedings or to any proceedings against any director, officer or employee (past or present) of any of the Target Companies in respect of any act or default for which any of the Target Companies might be vicariously liable.
9.	Insolvency
(A)	No receiver has been appointed in respect of or over the whole or any part of the assets or undertaking of the Target Companies.

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(B)	No petition has been presented, no order has been made and no resolution has been passed for the winding-up or dissolution of any of the Target Companies.
(C)	None of the Target Companies has stopped payment nor is insolvent or unable to pay its debts.
(D)	No material unsatisfied judgment is outstanding against any of the Target Companies.
(E)	No event analogous to any of the foregoing has occurred in or outside PRC in respect of the Target Companies.
10.	Delinquent acts
	None of the Target Companies has committed nor is liable for any criminal, illegal, unlawful or unauthorised act or breach of any obligation whether imposed by or pursuant to statute, contract or otherwise. None of the Target Companies has received notification of any investigation or inquiry is being or has been conducted by any governmental or other regulatory body in respect of the affairs of the Target Companies.
11.	Tax returns
(A)	Each of the Target Companies has, in respect of all years of assessment since incorporation or establishment falling before the date of this Supplemental Agreement, made or caused to be made all proper returns, and has supplied or caused to be supplied all information regarding Taxation matters which it is required to make or supply to any revenue authority (whether in Hong Kong or elsewhere if applicable) and there is no dispute or disagreement nor is any contemplated with any such authority regarding liability or potential liability to any Taxation or duty (including in each case penalties and interest) recoverable from the Target Companies or regarding the availability to the Target Companies of any relief from Taxation or duty.
(B)	Each of the Target Companies has sufficient records relating to past events during the six years prior to Completion to calculate the liability for Taxation or relief which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since the Accounts Date.
(C)	Each of the Target Companies has submitted all claims and disclaimers which have been assumed to have been made for the purposes of the Accounts.
12.	Stamp and other duties
	Each of the Target Companies has paid promptly all sums payable by it (if necessary) under the Stamp Duty Ordinance, the Companies Ordinance and any other Ordinance or legislation and no sums are presently payable by the Target Companies under any such Ordinance, legislation or regulations.

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13.	Employment
(A)	No employee or consultant or former employee or consultant has made or has any claims whatsoever against any of the Target Companies exceeding the amount of HK$500,000.
(B)	Full provision has been made in the Accounts for all and any compensation or severance payment for which any of the Target Companies is liable in respect of loss of office, wrongful dismissal, redundancy or unfair dismissal.
(C)	Save and except for compliance with the relevant statutory requirements, none of the Target Companies is paying, nor is under any liability (actual or contingent) to pay or secure, any pension or other benefit on retirement, death or disability or on the attainment of a specified age or on the completion of a specified number of years of service or on termination of employment.
(D)	None of the Target Companies has any outstanding undischarged liability to pay to any governmental or regulatory authority in any jurisdiction any contribution, taxation or other impost arising in connection with the employment or engagement of personnel by it.
(E)	No employee of any of the Target Companies who is crucial to the operation of Target Companies has given notice terminating his/her contract of employment or is under notice of dismissal. Full details of all benefits received by any employee otherwise than in cash, and of any benefit received by any such employee in cash has been disclosed to the Purchaser.
14.	Powers of attorney
	None of the Target Companies has given any power of attorney or other authority (express, implied or ostensible) which is outstanding or effective to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the normal course of their duties.
15.	Deductions and withholdings
	Each of the Target Companies has made all deductions in respect, or on account, of any Taxation from any payments made by it which it is obliged or entitled to make and has accounted in full to the appropriate authority for all amounts so deducted.
16.	Interests in companies, partnerships or joint ventures
(A)	None of the Target Companies has any interest in the share capital of any company or in any partnership or joint venture.
(B)	None of the Target Companies has acted or carried on business in partnership with other person(s) or is a member of any corporate or unincorporated body, undertaking or associate.

- 25 -

17.	Tenancies
(A)	The Tenancies are all good, valid and subsisting and have in no way become void or voidable.
(B)	All covenants, obligations, conditions and restrictions imposed upon each of the Target Companies under the Tenancies have been duly and promptly observed and performed.
(C)	The agreements for the Tenancies have all been properly stamped and (if necessary) any forms and documents required to be lodged in relation thereto with the government or other authorities have been lodged on time.
(D)	No Tenancies will be subject to avoidance, revocation or be otherwise affected solely upon or in consequence of the making or implementation of this Supplemental Agreement.
18.	Intellectual property rights
(A)	To the best of the each of the Target Companies’ knowledge and belief, the processes and methods employed, the services provided, the products used, manufactured, dealt in or supplied and the business conducted on or before the date of this Supplemental Agreement by the Target Companies do not and at the time of being employed, provided, used, manufactured, dealt in or supplied or conducted, did not infringe any Intellectual Property or another person.
(B)	There is and has been no breach nor is there any fact or matter which would or may create a breach of or otherwise permit termination of any licence or right granted to the Target Companies in respect of third party Intellectual Property. No notice to terminate any such licences or rights has been given or threatened.
19.	Repetition at Completion
	All warranties and representations contained in the foregoing provisions of this Schedule shall be deemed to be repeated immediately before Completion and to relate to the facts then existing.

- 26 -

SCHEDULE 4

Restricted Actions Pending Completion

The Vendor shall ensure that none of the Target Companies shall do nor agree (conditionally or unconditionally) to do any of the following (save with the consent of the Purchaser):

1.	dispose of, or grant any option or right of pre-emption in respect of, or acquire, any fixed asset of any of the Target Companies with a net book value in excess of HK$200,000;
2.	enter into any transaction, agreement, contract or commitment or acquire or dispose of any interest in any asset (except in the ordinary course of business as carried on at the date of this Supplemental Agreement) or assume or incur, or agree to assume or incur, a liability, obligation or expense (actual or contingent) except in the ordinary course of business;
3.	enter into any joint venture, partnership or profit sharing agreements;
4.	create, extend, grant or issue any mortgage, charge, debenture, pledge, lien, encumbrance or other security or third party right (other than liens arising in the ordinary course of business) over any of the assets or the undertaking of any of the Target Companies;
5.	create, extend or grant any guarantee, indemnity, performance bond or other security or contingent obligation in the nature of a financial obligation including letters of comfort or support, save in each case in respect of letters of credit and similar instruments, utility guarantees and otherwise in the ordinary course of business;
6.	create, allot or issue any shares, loan capital, securities convertible into shares or any option or right to subscribe in respect of any shares, loan capital or securities convertible into shares;
7.	declare, pay or make any dividend or distribution;
8.	incur any liability in the nature of a borrowing (other than by bank overdraft or other short term facility (including for the issuance of letters of credit and similar instruments) in the ordinary course of business within limits established by the relevant bank at the date of this Supplemental Agreement);
9.	make or agree to make or approve any capital commitment or approve any capital expenditure in excess of HK$200,000;
10.	allow any of its insurances to lapse or do anything to make any policy of insurance void or voidable or would or would be likely to, increase any premium payable in respect of such policy or prejudice the ability to effect equivalent insurance in the future;

- 27 -

11.	alter the provisions of its Memorandum or Articles of Association or other constitutional documents or adopt or pass regulations or resolutions inconsistent with them;
12.	reduce the share capital of any of the Target Companies;
13.	engage or dismiss other than for just cause any employee who is crucial to the operation of any of the Target Companies or make any material variation to the terms and conditions of employment of any employee (other than indexation increases in salary in the ordinary course of business) or provide or agree to provide any gratuitous payment or benefit to any employee or any of their dependants;
14.	enter into, amend, terminate or dispose of any tenancy or lease agreement in respect of any property or acquire or dispose of any interest in any property;
15.	appoint any directors or secretaries;
16.	start any civil, criminal, arbitration or other proceedings;
17.	other than in the ordinary course of its business, not to settle, compromise, release, discharge or compound any civil, criminal, arbitration or other proceedings or any liability, claim, action, demand or dispute or waive any right in respect of the foregoing;
18.	pass any resolution in general meeting (other than any resolution constituting ordinary business conducted at an annual general meeting);
19.	make or issue any return or correspondence in connection with Taxation unless for the purpose of complying with the relevant regulatory requirements;
20.	change the accounting reference date of any of the Target Companies; or
21.	make any change to the accounting procedures or principles by reference to which its accounts are drawn up.

- 28 -

IN WITNESS whereof this Supplemental Agreement has been entered into the day and year first above written.

SIGNED by	)
for and on behalf of	)	Koo Ming Kown
NAM TAI ELECTRONIC &	)
ELECTRICAL PRODUCTSLIMITED	)
in the presence of:- /s/ [signature illegible]	)
SIGNED by	)
	)	/s/ [signature illegible]
for and on behalf of	)
J.I.C. TECHNOLOGY COMPANY	)
LIMITED	)
in the presence of:- /s/ [signature illegible]

- 29 -

EX-4.40

EXHIBIT 4.40

PROFESSIONAL SERVICES AGREEMENT

This Professional Services Agreement (“Agreement”) is entered into as of the Effective Date defined below by and between SAP Hong Kong Co. Limited with offices at Suite 1111-1114, Cityplaza 4, 12 Taikoo Wan Road, Taikoo Shing, Hong Kong (hereinafter “SAP”) and Zastron Precision – Tech Limited with offices at Suites 1506-09, 15/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong. (hereinafter “Licensee”).

RECITAL

WHEREAS, Licensee acquired from SAP the right to use an SAP Software System pursuant to the SAP ERP or R/3 Software End-User License Agreement (“End-User Agreement”) effective 30^th November, 2007, between SAP and Licensee. All terms set forth in the End-User Agreement and referred to herein shall have the same meaning as set forth in the End-User Agreement unless otherwise specifically modified by this Agreement.

WHEREAS, SAP provides, through its employees and third party contractors (“Consultants”), software consulting and professional services (“Services”) in support of installation and implementation of the Software which Licensee desires to obtain.

NOW, THEREFORE, In consideration of the mutual promises and obligations in this Agreement, the sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:

1. Services To Be Performed. SAP will provide a Consultant(s) proficient in the installation and implementation of the applicable SAP Software at Licensee’s direction in accordance with Statement(s) of Work that reference this Agreement and are attached hereto and made a part of this Agreement. All Services of the SAP Consultant(s) will be coordinated with the designated Licensee representative. Licensee is responsible for making the necessary internal arrangements for the carrying out of the Services on a non-interference basis. The Statement(s) of Work more fully describes the scope, duration, and fees for the Services. Changes to any Statement of Work may be made upon prior written mutual agreement of the parties hereto.

2. Satisfaction with Performance. If at any time Licensee is dissatisfied with the material performance of an assigned Consultant, Licensee shall immediately report such dissatisfaction to SAP in writing and may request SAP to replace the Consultant. SAP shall use its reasonable discretion in accomplishing any such change.

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3. Compensation of SAP. All Services will be provided by SAP on a fixed price basis, as set out in schedule A of the Statement(s) of Work, unless otherwise agreed by the parties in writing. Services will be invoiced in accordance with the fees listed in or referenced in the Statement(s) of Work, or Schedules thereto, as applicable.

4. Taxes. The fees listed in the Statement of Work or Schedule thereto do not include federal, state or local sales, use, property, excise, services or other taxes now or hereafter levied. Licensee shall be responsible for paying all taxes levied on the products and services provided pursuant to this Agreement. Licensee shall remit such taxes directly to the applicable taxing authorities. Any taxes or amounts in lieu thereof paid or payable by SAP in respect of any taxes or the fees invoiced in accordance with this Agreement (excepting only taxes on income) shall be for Licensee’s account.

5. Term. This Agreement shall be effective as of the Effective Date, specified below, and shall remain in effect until terminated by either party. This Agreement and/or each Statement of Work may be terminated for convenience upon thirty (30) days prior written notice or otherwise in accordance with the applicable Statement of Work. If there is more than one Statement of Work attached to this Agreement, a Statement of Work may be terminated without terminating this Agreement or the other Statement of Works. Licensee shall be liable for payment to SAP for all Services provided prior to the date of any termination, whether of the Agreement as a whole or any particular Statement of Work, in accordance with the applicable Statement(s) of Work.

6. Proprietary Information. Both parties shall handle Proprietary Information in accordance with the terms listed in the End-User Agreement.

7. Work Product.

     7.1 All rights, title and interest in any Extension or Modification shall be governed by the terms set forth in the terms listed in the End-User Agreement.

     7.2 Licensee agrees that any and all ideas, concepts, or other intellectual property rights related in any way to the techniques, knowledge or processes of the SAP Services and Products provided under this Agreement, whether or not developed for Licensee, are the exclusive property of SAP. SAP shall have the sole and exclusive right, title and ownership to such technology.

8. Limitation of Liability, Warranty, Indemnification.

     8.1 SAP warrants that its Services shall be performed consistent with generally accepted industry standards. For any breach of this warranty, Licensee’s sole and exclusive remedy shall be at SAP’s sole option, reperformance of the

2

unsatisfactory Services or repayment of the fees associated with the unsatisfactory Services. . This warranty shall be applicable for only one month from the date of expiry or termination of the applicable Statement of Works, or the date of acceptance of deliverable in question by Licensee (if applicable), whichever is the earlier.

     8.2 ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, UNDER NO CIRCUMSTANCES SHALL SAP OR ITS CONSULTANTS BE LIABLE TO LICENSEE OR ANY OTHER PERSON OR ENTITY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES, LOSS OF GOOD WILL OR BUSINESS PROFITS, WORK STOPPAGE, DATA LOSS, COMPUTER FAILURE OR MALFUNCTION, ANY AND ALL OTHER COMMERCIAL DAMAGES OR LOSS, OR EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF SAP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

     8.3 IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES, OR EXCLUSION OF DAMAGES IS INTENDED BY THE PARTIES TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER PROVISION AND TO BE ENFORCED AS SUCH.

     8.4 SAP MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, NOR ANY OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY IN CONNECTION WITH THIS AGREEMENT AND THE SERVICES PROVIDED HEREUNDER.

     8.5 NOTWITHSTANDING ANY PROVISION TO THE CONTRARY, SAVE FOR SECTION 8.6 BELOW, SAP’S CUMULATIVE LIABILITY UNDER EACH STATEMENT OF WORK SHALL BE LIMITED TO LIABILITY DIRECTLY AND SOLELY ATTRIBUTABLE TO SAP’S SERVICES AND SHALL IN NO EVENT EXCEED THE FEE PAID BY LICENSEE TO SAP UNDER THE APPLICABLE STATEMENT OF WORK.

     8.6 The Limitation of Liability set forth in this section 8, does not apply to tangible property damage, or personal injury, including death, caused by the gross negligence of SAP. SAP agrees to indemnify, defend and hold harmless Licensee from and against any and all liabilities, damages, losses, claims, suits or judgments, and expenses (including reasonable attorney fees) that Licensee may incur for injury to or death of persons caused by SAP’s gross negligence while providing Services on Licensee’s site under this Agreement. With respect to tangible property damage caused by SAP’s gross negligence, such indemnity shall be limited to the extent of SAP’s insurance coverage.

9. General Provisions.

3

This Agreement is a personal services agreement and the performance of any obligation hereunder may not be assigned, delegated or otherwise transferred by either party, provided however, that SAP may assign all or part of the work to be performed under this Agreement to a qualified third party.

     9.2 If any provision of this Agreement is found by any arbitral body or court of competent jurisdiction to be invalid or unenforceable, the invalidity of such provision shall not affect the other provisions of this Agreement, and all provisions not affected by such invalidity shall remain in full force and effect.

     9.3. The waiver by either party of a breach or default in any of the provisions of this Agreement by the other party shall not be construed as a waiver of any succeeding breach of the same or other provisions; nor shall any delay or omission on the part of either party to exercise or avail itself of any right, power or privilege that is has or may have hereunder operated as a waiver of any breach or default by the other party.

     9.4 This Agreement, including all applicable Statement(s) of Work and Schedules thereto, constitutes the entire and exclusive agreement between the parties with respect to the subject matter hereof and supersedes all prior representations, discussions or agreements between the parties, whether written or oral, relating to the same subject matter. No modifications, amendments, or supplements to this Agreement shall be effective for any purpose unless in writing and signed by the authorized representatives of both parties. In the event of any inconsistencies between the Agreement, a Statement of Work or Schedules, the Agreement shall take precedence over any Statement of Work or Schedules, and the Statement of Work shall take precedence over any Schedules.

     9.5 The relationship of SAP and Licensee established by this Agreement is that of an independent contractor.

     9.6 Any delay or nonperformance of any provision of this Agreement (other than for the payment of amounts due hereunder) caused by conditions beyond the reasonable control of SAP or its Consultants, shall not constitute a breach of this Agreement, and the time for performance of such provision, if any, shall be deemed to be extended for a period equal to the duration of the conditions preventing such performance.

4

     9.7 If a dispute arises between the Licensee and SAP , the following provisions shall apply -

(i) The parties shall escalate all disputes unable to be resolved between the parties within 14 days of the dispute first arising to a committee of the managing directors of each party and who shall appoint a third member (being an independent party not related to either party or involved in the project).

(ii) Failing resolution of the dispute according to Section 9.7 (i) above, except for the right of either party to apply to a court of competent jurisdiction for an injunction or other equitable relief available under applicable law to preserve the status quo or prevent irreparable harm pending the selection and confirmation of a panel or arbitrators, any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in Hong Kong, in accordance with the Commercial Arbitration Rules of the ICC, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Arbitration shall be conducted in the English language by a panel of three (3) members, one member selected by SAP, one member selected by Licensee and the third member, who shall be chairman, selected by agreement between the other (2) members. The chairman shall be a solicitor, and the other arbitrators shall have a background or training in computer law, computer science, or marketing of computer industry products. The arbitrators shall have the authority to grant injunctive relief in a form substantially similar to that which would otherwise be granted by a court of law. The parties’ obligations under this Section 9.7 shall survive termination or expiration of this Agreement

     9.8 During the term of this Agreement and for a period of two years thereafter, Licensee will not directly or indirectly solicit or hire any Consultant assigned by SAP to perform any of the Service to be provided hereunder.

     9.9 Any purchase order or other document issued by Licensee is for administrative convenience only. In the event of any conflict between the provisions of this Agreement, and any purchase order or other document, the provisions of this Agreement shall prevail and govern and any additional terms in the purchase order or other document shall be inapplicable

     9.10 This Agreement and any disputes arising out of or in connection with this Agreement shall be governed and construed in accordance with the laws of Hong Kong.

     9.11 This Agreement shall be effective as of 30^th November, 2007 (“Effective Date”).

5

     10. Survival. Sections 6, 7, 8, 9.7, 9.8 and 9.10 shall survive any termination of this Agreement.

     IN WITNESS WHEREOF, the parties have so agreed as of the date written above

6

\

Agreed to:		Agreed to:
SAP Hong Kong Co. Limited		Zastron Precision – Tech Limited
Signature:		Signature:
Name:	K.K. Chan	Name:
Title:	Finance Director	Title:
Date:		Date:
Signature:
Name:	Ng Mau Wing
Title:	Consulting Director
Date:

Attachments	Statement of Work Schedules:
	“A” - List of Rates
	“B” - Change Order Procedure

7

Statement of Work
to
Professional Services Agreement (“Agreement”)
between
SAP Hong Kong Co. Limited (“SAP”)
and
Zastron Precision – Tech Limited (“Licensee”)

Project name: ERP Implementation (“Project”)

This Statement of Work (effective date 30^th November, 2007) and the terms and conditions of the SAP Professional Services Agreement, having an Effective Date of 30^th November, 2007describe the Services to be provided to Licensee in support of the implementation of the SAP ERP or R/3 Software System for the fees set forth herein as authorized by Licensee by signing this Statement of Work.

1. Scope and Approach

Licensee requires SAP Services for the implementation of the individual Project hereinafter referred to as “the Project”. The scope of the Project is set forth in the attached Project proposal, “SAP ERP Implementation Project - Technical Proposal - SAP Primes v11.0.pdf” hereinafter referred to as “Project Scope Document”, which is incorporated herein by reference. The Project Deliverables, associated timeline, fees and payment schedule are as set forth in the Project Scope Document. The Project Scope Document also includes certain Tasks and associated delivery dates that are the responsibility of Licensee.

Licensee agrees to provide appropriate project resources, including but not limited to equipment, data, information, workspace and appropriate and cooperative personnel, to facilitate the performance of the services, as follows:

§	sufficient personal computer(s) and networked, if applicable
§	modem line
§	access to SAPNet and connection to Online Support System

Licensee agrees that the fees and timeline set forth in the Project Scope Document shall be subject to change if the Tasks are not performed in a timely and appropriate manner and/or if the project resources are not provided.

2. Project Assumptions and Ground Rules

Project Assumptions and Ground Rules pertaining to the Project Scope Document, and the fees set forth therein, are set forth in the Project Scope Document attached.

CONFIDENTIAL

1

Licensee agrees that any change to or Licensee’s failure to fulfill any of the Project Assumptions and Ground Rules set forth above may affect SAP’s ability to provide timely and efficient services hereunder and that SAP’s fees and the timeline as set forth in the Project Scope Document shall be subject to change.

3. Deliverable Acceptance Period

SAP will deliver each completed Deliverable on the appropriate Milestone Date, as set forth in Schedule A. Upon delivery and receipt acknowledgment by Licensee, Licensee shall have 7 calendar days to accept or reject (“Acceptance Period”) the Deliverable, using reasonable discretion, based on the requirements specified and agreed to in the Project Scope Document for that Deliverable. If Licensee notifies SAP that it has rejected the Deliverable, Licensee shall provide written notice, within such 10 day period, specifying the basis of the deficiency. SAP shall have a reasonable period to cure such deficiency and redeliver the Deliverable for an additional Acceptance Period. If Licensee fails to reject, in a writing specifying the deficiency, any Deliverable within the Acceptance Period, Licensee shall be deemed to have accepted such Deliverable as of the tenth day of the Acceptance Period. Upon acceptance of a Deliverable, all Services associated with such Deliverable shall be deemed accepted and SAP shall have no further obligation with respect to an accepted Deliverable. The fees for an accepted Deliverable shall be due and payable within 30 days of the date the Deliverable is accepted or deemed to be accepted.

4. Project Management

Each party shall designate a Project Manager. The Project Manager’s shall work together toward a timely implementation in accord with the Project Scope Document. The SAP Project Manager will, with the Licensee Project Manager, plan the project, select resources and quality check the activities and progress.

The SAP Consultants will be located at designated Licensee facilities. Licensee agrees and understands that the assigned SAP Consultant(s) will occasionally perform Services on the Project implementation from a SAP office.

SAP reserves the right to, in its sole discretion, replace any assigned Consultant with another SAP Consultant with equivalent skills.

The Application Consultant(s) will work with Licensee resources in the translating of the business requirements into system solutions and other tasks that relate to the Project implementation.

The Basis Consultant will work with the Licensee technical resources in establishing development, test and production environments. The Basis Consultant will provide system support and performance optimization, make recommendations for backup and recovery strategies, capacity planning and hardware configuration.

CONFIDENTIAL

2

5. Term and Termination

Term. This Statement of Work shall become effective as of the date stated above.

5.1 Termination for Default.

     Either party may terminate this Statement of Work upon the occurrence of one or more of the following events:

          (i) The failure of a party to make payment of any undisputed amounts when due and the expiration of fifteen (15) calendar days from receipt of notice thereof; or

          (ii) The failure of a party to comply with any material term or condition of this Statement of Work after the non-defaulting party has provided the other party fifteen (15) days prior written notice specifying the nature of such default and the defaulting party fails to commence to cure such default within such fifteen (15) day period, or if a longer time is required by SAP, then from that time period, which shall not be unreasonable; or

          (iii) The dissolution or liquidation of the other party, the insolvency or bankruptcy of the other party, the institution of any proceeding by or against the other party under the provisions of any insolvency or bankruptcy law; the appointment of a receiver of any of the assets or property of the other party, or the issuance of an order for an execution on a material portion of the property of the other party pursuant to a judgment.

     5.2 In the case of default by Licensee under Section 5.1(ii) above SAP shall be paid for all Services provided prior to the date of termination based upon the terms, conditions and prices set forth in Schedule A to this Statement of Work (“Schedule”), which is hereby incorporated by reference.

     5.3 Remedies in Event of Default. Neither party shall be entitled to exercise any remedy otherwise available to it at law or equity unless and until such party shall have provided the other party with notice of such event of default, reasonably specifying the nature of the default, and any applicable period of time for cure thereof shall have expired. In such cases of termination, Licensee shall be relieved of all further obligations hereunder except for any amounts due to SAP hereunder.

     5.4 Termination for Convenience. Licensee may, by providing at least thirty (30) days prior written notice stating the extent and effective date, terminate this Statement of Work for convenience in whole or in part at any time. In the event the effective date of such termination is less than thirty (30) days after receipt of notice and SAP does not have other consulting job assignments for the Consultants currently assigned as full time on this project, Licensee shall compensate SAP for such unassigned Consultants for thirty (30) days after receipt of notice. The amount

CONFIDENTIAL

3

to be paid will be based on the K rates and terms listed in the Schedule. In lieu of the K rates, the parties may agree upon a percentage of completion basis of any incomplete Deliverable. In any event, SAP shall be paid for all Services performed, but not yet invoiced for any Deliverable. Upon termination of this Statement of Work for default by SAP or for convenience by Licensee, notwithstanding anything in this Statement of Work or Schedule A hereto to the contrary, Licensee shall be liable for payment to SAP for all Services provided prior to the date of termination, calculated on the basis of the actual number of mandays spent on the Services at the Standard K-Rate(s) specified in Schedule A hereto, or be liable for payment of compensation as specified in this Section 5.4 herein (if any). The excess (if any) of all fees paid by Licensee to SAP under this Statement of Work or Schedule A hereto over the mandays cost and the compensation as mentioned above shall within thirty (30) days from the date of termination be refunded to Licensee.

6. General

Any change to this Statement of Work, including the Project Scope Document, shall be subject to mutual agreement of the parties and shall be made in accordance with Schedule B hereto, Change Order Procedure, which is hereby incorporated by reference. SAP shall not commence work on any such change unless and until the change has been agreed to in writing.

Additional Statements of Work may be added to this Agreement by mutual agreement.

CONFIDENTIAL

4

IN WITNESS WHEREOF, the parties have so agreed as of the date written above.

Acceptance:		Acceptance:
SAP Hong Kong Co. Limited		Zastron Precision – Tech Limited
Signature:	/s/ K. K. Chan	Signature:	/s/ John Q. Farina
Name:	K.K. Chan	Name:	John Q. Farina
			CFO NTEI &
Title:	Finance Director	Title:	Director, Zastron
Date:	26 Nov 2007	Date:	December 7th, 2007
Signature:	/s/ Ng Mau Wing
Name:	Ng Mau Wing
Title:	Consulting Director
Date:	26 Nov 2007

CONFIDENTIAL

5

Project Scope Document To
Statement of Works
To
Professional Services Agreement
between
SAP Hong Kong Co. Limited &

Zastron Precision – Tech Limited (“Licensee”)

Please refer to the attached documents titled:

1. SAP ERP Implementation Project - Technical Proposal - SAP Primes v11.0.pdf

CONFIDENTIAL

6

Schedule A
to
Statement of Work
between
SAP Hong Kong Co. Limited (SAP)
and
Zastron Precision – Tech Limited (“Licensee”)

SAP Consultant Rate

	Standard		Standard K-		Discounted Rate
	K-Rate		Rate (HKD) per		(HKD) per
Consultant	Type		manday		manday
SAP Implementation team – project manager and application consultants		K2	$	10,000	$	6,867
SAP Basis consultant		K3	$	12,000	$	9,000
SAP ABAPer		K1	$	10,000	$	7,500

Phase 1 ERP Implementation Summary

	SAP K-rate		Project		Business				Final		Go live and		Total			Investment
Consultant	(Discounted)		Preparation		Blueprint		Realization		Preparation		Support		Manday			(HKD)
SAP consultant
SAP Project Manager		$ 6,867		5		10		10		10		5		40		$	274,680
SAP FI/CO consultant		$ 6,867		2		30		20		10		10		72		$	494,424
SAP SD/MM consultant		$ 6,867		2		30		20		10		10		72		$	494,424
SAP SD/MM consultant		$ 6,867		2		30		20		10		10		72		$	494,424
SAP PP consultant		$ 6,867		2		30		20		10		10		72		$	494,424
Total				13		130		90		50		45		328			2,252,376
									Fixed Price Premium					10	%		225,238
																	2,477,614

     The above estimation is on Fixed Price basis:

• All rates quoted and billing are based on Hong Kong Dollars and net of all taxes.

• Any system and reporting customization will be charged on time and material base. The Man-day rate is HKD7,500 per day.

CONFIDENTIAL

7

Phase 2 ERP Implementation Summary

	SAP K-rate		Project		Business			Final		Go live and		Total			Investment
Consultant	(Discounted)		Preparation		Blueprint	Realization		Preparation		Support		Manday			(HKD)
SAP consultant
SAP PM/FI/CO consultant	$	6,867		10			20		5		5		40		$	274,680
SAP SD consultant	$	6,867		5			20		5		5		35		$	240,345
SAP MM consultant	$	6,867		5			20		5		5		35		$	240,345
SAP PP consultant	$	6,867		5			20		5		5		35		$	240,345
Total				25			80		20		20		145			995,715
								Fixed Price Premium					10	%		99,572
																1,095,287

     The above estimation is on Fixed Price basis:

• All rates quoted and billing are based on Hong Kong Dollars and net of all taxes.

• Any system and reporting customization will be charged on time and material base. The Man-day rate is HKD7,500 per day.

Set to Work

	SAP K-rate		Project		Business				Final		Go live and		Total			Investment
Consultant	(Discounted)		Preparation		Blueprint		Realization		Preparation		Support		Manday			(HKD)
SAP Basis consultant (Phase 1)	$	9,000		2		5		5		5		3		20		$	180,000
SAP Basis consultant (Phase 2)	$	9,000						2		2		2		6		$	54,000
Total				2		5		7		7		5		26			234,000
									Fixed Price Premium					10	%		23,400
																	257,400

     The above estimation is on Fixed Price basis:

• Basis consultant support includes 1) SAP System Installation, 2) Authorization Workshop, 3) Basis Knowledge Transfer Workshop, and 4) Go-Live EarlyWatch.

• All rates quoted and billing are based on Hong Kong Dollars and net of all taxes.

CONFIDENTIAL

8

Customization

	SAP K-rate		Project		Business				Final		Go live and		Total			Investment
Customizatoin	(Discounted)		Preparation		Blueprint		Realization		Preparation		Support		Manday			(HKD)
Customization	$	7,500												25		$	187,500
Total				0		0		0		0		0		25			187,500
									Fixed Price Premium					10	%		18,750
																$	206,250

The customization effort covers the Item 54 of Zastron (hereinafter “Namtai”) requirement list. The actual mandays required will be finalized within the Phase 1 Blueprint stage. The requirement listed as below:

• Material picking to final assembly line based on 2 hours production rate of shop order.

     The above estimation is on Fixed Price basis:

• All rates quoted and billing are based on Hong Kong Dollars and net of all taxes.

• Any system and reporting customization will be charged on time and material base. The Man-day rate is HKD7,500 per day.

Remark: The 10% fixed price premium is applied. This can be used as a buffer for maximum 50 man-days customization development provided by SAP if needed

Travelling Expense

The above consultant K-rates charges are exclusive of any reasonable travel and living expenses, other reasonable and necessary expenses incurred in connection with the Services, and any applicable taxes. This applies to project-related expenses in other countries as consultants engaged on this assignment might be based in offices outside Hong Kong.

• The rate above do not include actual travel and living (T&L) costs, which will be billed to Namtai at cost, where applicable. In following circumstances, if any SAP consultant is required to work outside his home country/ city, then related reasonable travel and living (T&L) expenses (actual) & per-diem (if applicable) are required to be paid by Namtai.

• SAP will invoice Namtai monthly for applicable taxes, reasonable travel and living expenses, and other reasonable expenses incurred in connection with Services together with relevant supporting documents with the acceptance and endorsement by the Namtai.

CONFIDENTIAL

9

Payment Term (Consulting Service)

Phase 1 ERP Implementation, Set to Work and Customization Payment Schedule

		% of			Estimated	Payment	Total
Stage	Key deliverable	payment			Bill Date	Term	(HKD)
Phase 1 - ERP implementation + Basis + Customization			100	%			$	2,881,864
Sign contract	Signed contract		30	%	30-Nov-07	7 day	$	864,558
Blueprint	SAP blueprint signoff		20	%	31-Mar-08	30 day	$	576,373
Realization	Integration testing signoff		20	%	31-May-08	30 day	$	576,373
Final Preparation	System cut-over and Ready for going Live		15	%	31-Jul-08	30 day	$	432,280
Go live and support (Retention)	One month after go live (1st month end)		15	%	31-Aug-08	30 day	$	432,280

Phase 2 ERP Implementation and Set to Work Payment Schedule

		% of			Estimated	Payment	Total
Stage	Key deliverable	payment			Bill Date	Term	(HKD)
Phase 2 - ERP implementation + Basis			100	%			$	1,154,687
Sign contract	Signed contract		30	%	30-Nov-07	7 day	$	346,407
Project Preparation	Confirm requirment		20	%	31-Oct-08	30 day	$	230,937
Realization	Integration testing signoff		20	%	31-Dec-08	30 day	$	230,937
Final Preparation	System cut-over and Ready for going Live		15	%	31-Jan-09	30 day	$	173,203
Go live and support (Retention)	One month after go live (1st month end)		15	%	28-Feb-09	30 day	$	173,203

The phase 1 and phase 2 ERP implementation Service are in a fixed price basis. The Service invoice will include all applicable expenses which have been agreed to, duly approved, confirmed and signed by Licensee’s project manager or other representative. All payments are due within thirty (30) days after date of invoice. SAP reserves the right to terminate its Services within 5 days written notice in the event of Licensee’s delinquency or delay in payment of monies due hereunder to SAP hereunder.

CONFIDENTIAL

10

Schedule B
to
Statement of Work
between
SAP Hong Kong Co. Limited (SAP)
and
Zastron Precision – Tech Limited (“Licensee”)

Change Order Procedure

Any change to the Statement of Work must be agreed to, in writing, by the parties. The following procedure will be used to control all changes, whether requested by Licensee or SAP.

• All Requests For Changes (“RFC”), a copy of which is attached hereto, to the Statement of Work must be made in writing and shall be submitted by the appropriate Project Manager. Each request should contain the following information:

• Reason for change;

• Impact, if any, on existing Deliverables and/or definition of additional Deliverables;

• Estimated impact, if any, on project schedule; and

• Estimated change, if any, in project fees.

• All RFCs must be submitted to the appropriate Project Manager. The Project Manager shall review and accept or reject the RFC. If rejected, the RFC shall be returned to the submitting party with written reasons for rejection and, as appropriate, any alternatives.

• All approved RFCs will be incorporated into the Statement of Work via written amendment. SAP will not perform any services outside of the Statement of Work until the amendment has been executed by Licensee.

CONFIDENTIAL

11

Request For Change

This document must be completed and submitted to the appropriate Project Manager to commence any change order.

1. Describe the reason for the requested change:

2. A. Describe the impact, if any, on existing Deliverables:

B. Describe additional Deliverables required as a result of the requested change, if any:

3. Describe the impact, if any, to the existing Project Schedule. Provide a revised Project Schedule, if appropriate.

4. State the estimated change, if any, to the project fees. Provide the rationale/methodology used to calculate any change.

CONFIDENTIAL

12

EX-4.41

Exhibit 4.41

Date: Nov. 27, 2007

NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

and

BEST WHOLE HOLDINGS LIMITED

Equity Transfer Agreement

Table of Contents

Article	Page
1. Sale of Equity and Consideration		1
2. Delivery		2
3. Guarantee		2
4. Entire Agreement		3
5. Effectiveness and Corresponding Texts		3
6. Further Guarantee		3
7. Severability		3
8. Alteration		4
9. Governing Law and Arbitration		4

Equity Transfer Agreement

This Agreement was executed on Nov. 30, 2007 by following parties:

(1) NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED (the Seller) is a company incorporated under laws of Cayman Islands with the registration address at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands and the business address at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong

(2) BEST WHOLE HOLDINGS LIMITED (the Buyer) is a company incorporated under laws of HK SAR with the registration address at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong

Whereas:

(A) Shenzhen Namtek Co., Ltd. (the Company) is a Wholly Foreign Owned Enterprise (WFOE) registered in Shenzhen of the PRC with the registration number of 308938 (copy of the business license is enclosed in the appendix hereof). The Seller owns all registered capital of the Company.

(B) The Buyer is a subsidiary indirectly wholly held by the Seller (the Seller holds the whole equity of Joy Holdings Limited, a company incorporated under the laws of British Virgin Islands, while the Joy Holdings Limited holds the whole equity of the Buyer.)

(C) In accordance with the consideration and articles stipulated hereby, the Seller wants to sell 100% equity (Equity Being Transferred) of the company and the Buyer wants to buy 100% equity held by the Seller.

Witness that both parties do mutually agree as follows:

1. Sale of Equity and Consideration

1.1. The Seller agrees to sell and the Buyer agrees to buy the Equity Being Transferred. The transfer shall be completed (Delivery) after being approved by relevant government approval authority (or other date agreed by the two parties). The sale of the Equity Being Transferred shall not be restricted by any security interest, equity, option, claim of right, or any third party right of any nature (including but not limited to preemption), all rights attached to the Equity Being Transferred (including but not limited to the right to obtain dividends or other

- 1 -

	distributions announced or paid at or after the value day) shall be transferred at the same time.
1.2.	The total consideration of the Equity Being Transferred is USD 800,000.

2. Delivery

2.1. The Equity Being Transferred is deemed to be delivered from the Seller to the Buyer at the time of all the following issues being settled:

(a) The Seller shall deliver or urge the Company to deliver to the Buyer with the instruments of ratification of equity transfer approved by relevant government authorities under the terms and conditions hereof and the new instrument of ratification of foreign-funded enterprise of the Company issued by relevant government authority, which can reflect that the Equity Being Transferred has been transferred to the Buyer and the Buyer has held 100 per cent equity of the Company.

(b) On matters concerning equity transfer hereunder, the Company has registered in registration office for alteration of industrial and commercial registration, and obtained the new business license with transferred equity urged by the Seller; and

(c) The Buyer has paid the consideration to the Seller with the way agreed by the two parties after above provision (a) and (b) of Article 2.1 is realized

3. Guarantee

The Seller guarantees to the Buyer as follows:

(a) The capital corresponding to the Equity Being Transferred has been fully paid;

(b) The Seller is the only legal and beneficial owner of the Equity Being Transferred, and the Equity Being Transferred is not restricted by any security interest, option, equity, claim of right or any other third party right of any nature (including but not limited to preemption); and

(c) The Seller has the right to dispose the Equity Being Transferred.

- 2 -

4. Entire Agreement

This Agreement constitutes the entire agreement and understanding pertaining to the selling and buying of the Equity Being Transferred, the two parties agree as follows:

(a) Any presentation, guarantee or promise made by one party depending on the other party in order to sign this agreement shall be clearly set forth or referred to herein;

(b) Any party is entitled to claim for any violation of guarantees hereunder by the other party, nevertheless, the party has no remedial right or the right to claim for any mispresentation (no matter due to negligence or other reasons, or before and /or in the process of signing this Agreement) or false statement made by the other party;

(c) This Article shall not rule out any liability or remedy for non-mispresentation.

5. Effectiveness and Corresponding Texts

5.1. This Agreement shall take effect from the date of all instruments of ratification needed by the sale of the Equity Being Transferred are obtained.

5.2. Corresponding to this Agreement, the two parties may execute several different texts, each of them is the original with the same legal effect.

6. Further Guarantee

For the purpose of enabling the Buyer to obtain all benefits of the assets and rights & interests to be transferred hereunder, and implementing and/or performing this Agreement and the transaction described herein, the Seller agrees to take (or urge to take) any further action, sign and deliver (or urge to sign or deliver) further instrument stipulated by laws or properly required by the Buyer no mater on or after the value day.

7. Severability

- 3 -

If any of the provisions of this Agreement is determined to be invalid or unenforceable, this provision (only limited to invalid or unenforceable scope) will lose its law effect, and shall not be deemed as a part hereof, nevertheless, it shall not invalid this Agreement or other provisions hereof. The two parties shall make all reasonable efforts to replace the invalid or unenforceable provision with a valid and enforceable provision that comes closest to expressing the true intent of such invalid or unenforceable provision.

8. Alteration

Any alteration of This Agreement (or any document referred to herein) shall only be made by written instrument signed by both parties. “Alteration” herein includes any alteration, supplement, cut down or replacement of the agreement.

9. Governing Law and Arbitration

9.1 This Agreement shall be governed and interpreted by the laws of the People’s Republic of China.

9.2 Any dispute in connection with this Agreement shall be settled by friendly discussion. If the dispute is not settled by the two parties within ninety (90) days after one party has sent a written notice to the other party to inform the exist of such dispute, any party may submit the dispute at any time to China International Economic and Trade Arbitration Committee (“Committee”) for arbitration, which shall be conducted in accordance with the Committee’s arbitration rules in effect at the time of applying for arbitration. The arbitral tribunal shall be composed of three (3) arbitrators, each (1) of them shall be assigned by the Seller and the Buyer, and the third (3) arbitrator is assigned by the Committee. The arbitration procedure shall be carried out in Chinese in Shenzhen. The arbitration decision shall be the final decision and should be binding on both parties. Except otherwise decided by the arbitral tribunal, the arbitration fee and expenditure shall be borne by the losing party.

- 4 -

Appendix
Business license of the Company

Legal Representative
Business License
Registration No. WFOE Yue No. 308938
Established Date: Dec. 20, 1995

     Counterpart:

     Registration Authority: Shenzhen Industrial and Commercial Administration Bureau

Mar. 23, 2006

Annual inspection of 2004 is finished

No. 0938416

Name: Shenzhen Namtek Co., Ltd.
Address: C1204-1206 Ming Wah International Convention Center, No.8 Guishan Road, Shekou Industrial Zone, Nanshan
District, Shenzhen
Legal Representative: Mr. Kazuhiro Asano
Registered Capital: USD 800, 000 (Paid-in Capital: HKD USD 800, 000)
Business Type: Wholly Foreign Owned Enterprise
Business Line: develop the software for electronic products (except restricted projects). All products are exported.

Branch

Valid term of this business license	From Dec. 20, 1995
	To Dec. 20, 2010

(It shall be inspected in the registration office every year from March 1^st to June 30^th. This would not be notified later)

- 5 -

In WITNESS HEREOF, the parties hereto have executed this Agreement the day and year first written above.

This Agreement shall be executed by a representative authorized by each of the parties.

Signed on behalf of	/s/ Connie Sit
(NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED)	Name: Connie Sit
	Title: Authorized representative
Signed on behalf of	/s/ Thomas Lai
(BEST WHOLE HOLDINGS LIMITED)	Name: Thomas Lai
	Title: Authorized representative

- 6 -

EX-4.42

Exhibit 4.42

Date: Nov. 30, 2007

J.I.C. TECHNOLOGY COMPANY LIMITED

and

TOP EASTERN INVESTMENT LIMITED

Equity Transfer Agreement

Table of Contents

Article	Page
1. Sale of Equity and Consideration		1
2. Delivery		2
3. Guarantee		2
4. Entire Agreement		3
5. Effectiveness and Corresponding Texts		3
6. Further Guarantee		3
7. Severability		3
8. Alteration		4
9. Governing Law and Arbitration		4

Equity Transfer Agreement

This Agreement was executed on Nov. 30, 2007 by following parties:

(1) J.I.C. TECHNOLOGY COMPANY LIMITED (the Seller) is a company incorporated under laws of Cayman Islands with the registration address at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands and the business address at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong

(2) TOP EASTERN INVESTMENT LIMITED (the Buyer) is a company incorporated under laws of HK SAR with the registration address at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong

Whereas:

(A) Jetup Electronic (Shenzhen) Co., Ltd. (the Company) is a Wholly Foreign Owned Enterprise (WFOE) registered in Shenzhen of the PRC with registration number of 301553 (copy of the business license is enclosed in the appendix hereof). The Seller owns all registered capital of the Company.

(B) The Buyer is a subsidiary indirectly wholly held by the Seller (the Seller holds the whole equity of First Rich Holdings Limited, a company incorporated under the laws of British Virgin Islands, while the First Rich Holdings Limited holds the whole equity of the Buyer.)

(C) In accordance with the consideration and articles stipulated hereby, the Seller wants to sell 100% equity (Equity Being Transferred)of the company and the Buyer wants to buy 100% equity held by the Seller.

Witness that both parties do mutually agree as follows:

1. Sale of Equity and Consideration

1.1. The Seller agrees to sell and the Buyer agrees to buy the Equity Being Transferred. The transfer shall be completed (Delivery) after being approved by relevant government approval authority (or other date agreed by the two parties). The sale of the Equity Being Transferred shall not be restricted by any security interest, equity, option, claim of right, or any third party right of any nature (including but not limited to preemption), all rights attached to the Equity Being Transferred (including but not limited to the right to obtain dividends or other

- 1 -

	distributions announced or paid on or after the value day) shall be transferred at the same time.
1.2.	The total consideration of the Equity Being Transferred is HKD 181,200,000.

2. Delivery

2.1. The Equity Being Transferred is deemed to be delivered from the Seller to the Buyer at the time of all the following issues being settled:

(a)	The Seller shall deliver or urge the Company to deliver to the Buyer with the instruments of ratification of equity transfer approved by relevant government authorities under the terms and conditions hereof and the new instrument of ratification of foreign-funded enterprise of the Company issued by relevant government authority, which can reflect that the Equity Being Transferred has been transferred to the Buyer and the Buyer has held 100 per cent equity of the Company.
(b)	On matters concerning equity transfer hereunder, the Company has registered in registration office for alteration of industrial and commercial registration, and obtained the new business license with transferred equity urged by the Seller; and
(c)	The Buyer has paid the consideration to the Seller with the way agreed by the two parties after above provision (a) and (b) of Article 2.1 is realized.

3. Guarantee

The Seller guarantees to the Buyer as follows:

(a) The capital corresponding to the Equity Being Transferred has been fully paid;

(b) The Seller is the only legal and beneficial owner of the Equity Being Transferred, and the Equity Being Transferred is not restricted by any security interest, option, equity, claim of right or any other third party right of any nature (including but not limited to preemption); and

(c) The Seller has the right to dispose the Equity Being Transferred.

- 2 -

4. Entire Agreement

This Agreement constitutes the entire agreement and understanding pertaining to the selling and buying of the Equity Being Transferred, the two parties agree as follows:

(a) Any presentation, guarantee or promise made by one party depending on the other party in order to sign this agreement shall be clearly set forth or referred to herein;

(b) Any party is entitled to claim for any violation of guarantees hereunder by the other party, nevertheless, the party has no remedial right or the right to claim for any mispresentation (no matter due to negligence or other reasons, or before and /or in the process of signing this Agreement) or false statement made by the other party;

(c) This Article shall not rule out any liability or remedy for non-mispresentation.

5. Effectiveness and Corresponding Texts

5.1. This Agreement shall take effect from the date of all instruments of ratification needed for the sale of the Equity Being Transferred are obtained.

5.2. Corresponding to this Agreement, the two parties may execute several different texts, each of them is the original with the same legal effect.

6. Further Guarantee

For the purpose of enabling the Buyer to obtain all benefits of the assets and rights and interests to be transferred hereunder, and implementing and/or performing this Agreement and the transaction described herein, the Seller agrees to take (or urge to take) any further action, sign and deliver (or urge to sign or deliver) further instrument stipulated by laws or properly required by the Buyer no mater on or after the value day.

7. Severability

If any of the provisions of this Agreement is determined to be invalid or unenforceable, this provision (only limited to invalid or unenforceable scope) will lose its law effect, and shall not be deemed as a part hereof, nevertheless,

- 3 -

it shall not invalid this Agreement or other provisions hereof. The two parties shall make all reasonable efforts to replace the invalid or unenforceable provision with a valid and enforceable provision that comes closest to expressing the true intent of such invalid or unenforceable provision.

8. Alteration

Any alteration of This Agreement (or any document referred to herein) shall only be made by written instrument signed by both parties. “Alteration” herein includes any alteration, supplement, cut down or replacement of the agreement.

9. Governing Law and Arbitration

9.1 This Agreement shall be governed and interpreted by the laws of the People’s Republic of China.

9.2 Any dispute in connection with this Agreement shall be settled by friendly discussion. If the dispute is not settled by the two parties within ninety (90) days after one party has sent a written notice to the other party to inform the exist of such dispute, any party may submit the dispute at any time to China International Economic and Trade Arbitration Committee (“Committee”) for arbitration, which shall be conducted in accordance with the Committee’s arbitration rules in effect at the time of applying for arbitration. The arbitral tribunal shall be composed of three (3) arbitrators, each (1) of them shall be assigned by the Seller and the Buyer, and the third (3) arbitrator is assigned by the Committee. The arbitration procedure shall be carried out in Chinese in Shenzhen. The arbitration decision shall be the final decision and should be binding on both parties. Except otherwise decided by the arbitral tribunal, the arbitration fee and expenditure shall be borne by the losing party.

- 4 -

Appendix
Business license of the Company

Legal Representative
Business License

Registration No. WFOE No. 301553
Established Date: Apr. 15, 1993

Counterpart:
Registration Authority: Shenzhen
Industrial and Commercial
Administration Bureau

(Illegible)
Annual inspection of 2005 is finished

No. 0293926

Name: Jetup Electronic (Shenzhen) Co., Ltd.

Address: Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village, Xixiang Town, Baoan District, Shenzhen, People’s Republic of China

Legal Representative: Ivan Chui
Registered Capital: HKD 181,200,000
Paid-in Capital: HKD 181,200,000
Business Type: Limited Liability
Company (wholly funded by foreign artificial person)

Business Line: product and sell LCD, new type plate display, LCD module, LCD plate, LCD sheet, mini PCB, LED. All products are exported.

Stockholder (initiator) J.I.C Technology Company Limited

Valid term of this business license

From Apr. 15, 1993

To     Apr.15, 2013

(It shall be inspected in the registration office every year from March 1st to June 30^th. This would not be notified later)

- 5 -

In WITNESS HEREOF, the parties hereto have executed this Agreement the day and year first written above.

This Agreement shall be executed by a representative authorized by each of the parties.

Signed on behalf of	/s/ Connie Sit
(J.I.C. TECHNOLOGY COMPANY LIMITED)	Name: Connie Sit Title: Authorized representative
Signed on behalf of	/s/ Thomas Lai
(TOP EASTERN INVESTMENT LIMITED)	Name: Thomas Lai
	Title: Authorized representative

- 6 -

EX-4.43

Exhibit 4.43

Letter of Commitment

To Management Committee of Guangming New District:

     According to the contents of special conference held in the morning on December 14^th, 2007 under the auspice of Ye Jiande, the associate director of Management Committee of Guangming New District, called “Dealing with Remaining Problems after the Relocation of Flower Field on the Land of Zastron Electronic”, our ministry has got informed that currently, there are still three flower farmers (with a total area of 110 mu) who have not settled down the problems of gap of relocation fund with a total amount of RMB 4.84 million. Aiming at this problem, the board bureau of Zastron Electronic (Shenzhen) Co., Ltd (Zastron Electronic) convened an exigent conference this afternoon. Due to limited time, Zastron Electronic agreed to pay compensation charges, that is RMB 4.84 million (this Fund) before January 20^th, 2008, for the relocation of the flower field in order to better coordinate with the Management Committee of Guangming New District in dealing with capital problem. As a return, the Management Committee of Guangming New District must clear up remaining problems of compensation for the relocation of flower field before December 31st, 2007 and ensure that the Agreement on Transfer of Land-use Rights in Shenzhen concluded between Zastron Electronic (Shenzhen) Co., Ltd (Shenzhen Land No.2007-4150) (Agreement on Transfer of Land-use Rights) and Bureau of State Land in Baoan District is effectively executed.

Zastron Electronic (Shenzhen) Co., Ltd

December 18^th, 2007

EX-4.44

EXHIBIT 4.44

THIS LOAN AGREEMENT is made on the 28^th day of December 2007.

BETWEEN:

(1) Top Eastern Investment Limited, a limited company incorporated under the laws of the Hong Kong Special Administrative Region (“Hong Kong”) and whose registered office is at Suites 1506-1508, 15^th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong (the “Borrower”); and

(2) Nam Tai Electronic & Electrical Products Limited, a limited company incorporated under the laws of the Cayman Islands and whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands (the “Lender”).

IT IS HEREBY AGREED as follows:

1. The Lender hereby agrees to lend to the Borrower an interest-free loan of HK$24,107,111 (the “Loan”) on 31^st December 2007.

2. The Borrower hereby agrees to repay the Loan to the Lender immediately upon demand of the Lender, which demand may be made orally or in writing.

3. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in all respects in accordance with the laws of Hong Kong and the parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of the Hong Kong Courts.

IN WITNESS whereof this Agreement has been duly executed the day and year first above written.

SIGNED by Mr. Chui Kam Wai, Director,	)
for and on behalf of Top Eastern Investment	)	/s/ [signature illegible]
Limited in the presence of :	)
/s/ K. H. Lee	)
K. H. Lee	)
Senior In-House Counsel
SIGNED by Ms. Wong Kuen Ling, Karene,	)
Director, for and on behalf of Nam Tai	)	/s/ [signature illegible]
Electronic & Electrical Products Limited,	)
in the presence of :	)
/s/ K. H. Lee	)
K. H. Lee	)
Senior In-House Counsel	)

EX-4.45

EXHIBIT 4.45

THIS DEED OF ASSIGNMENT OF LOAN is made on the 31st day of December 2007

AND GIVEN BY : -

(1) J.I.C. Technology Company Limited, a company incorporated in the Cayman Islands with limited liability whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands (the “Assignor”)

IN FAVOUR OF

(2) Top Eastern Investment Limited, a company incorporated in Hong Kong with limited liability whose registered office is at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong (the “Assignee”)

WITH THE CONSENT OF : -

(3) Jetup Electronic (Shenzhen) Co., Ltd., a company incorporated in the People’s Republic of China with limited liability whose registered office is at Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village, Xixang Town, Bao’an District, Shenzhen, the People’s Republic of China, Postal Code 518102 (the “Company”)

WHEREAS : -

(A) The Company is as at the date hereof indebted to the Assignor in the principal sum of HK$21,500,000 being interest-free loans advanced by the Assignor to the Assignee (the “Loan”).

(B) The Assignor has agreed to sell its right, title and interest in the Loan to the Assignee on the terms and conditions of this Deed.

NOW THIS DEED WITHNESSETH as follows : -

1. In consideration of the sum of HK$21,500,000 paid by the Assignee to the Assignor (the receipt whereof the Assignor hereby acknolowdedges), the Assignor as beneficial owner hereby assigns to the Assignee all of its right, title, benefit and interest of and in the Loan free from all claims, charges, liens, encumbrances, equities or adverse rights of any nature whatsoever together with all rights attached or attaching, accrued or accruing thereto as at the date hereof to hold the same unto the Assignee absolutely.

1

2.	The Company hereby acknowledges and confirms that as from the execution of this Deed, the Loan is owed to the Assignee and the Assignee is entitled at any time and from time to time to require immediate repayment of all or any part of the Loan from the Company.
3.	The Assignor hereby represents and warrants to the Assignee that : -

(a)	all information contained in this Deed (including the recital) is true and accurate;
(b)	the Loan is immediately due and payable and is valid and subsisting and free from all or any encumbrance, compromise, release, or waiver; and
(c)	it has all the right, full power and authority to assign the benefit of and in the Loan and to enter into and perform this Deed.

4.	The Company agrees and consents to the foregoing assignment of the Loan and further undertakes to the Assignor that it will henceforth make all payments of the Loan and discharge all its obligations in respect thereof to the Assignee.
5.	Any notice required to be given under this Deed shall be in writing and shall be delivered personally or sent by facsimile transmission to such facsimile transmission numbers as may be provided or by registered or recorded delivery post, postage prepaid to the respective party at the address set out herein or such other address as may have been last notified in writing by or on behalf of such party to the other parties hereto. Any such notice shall be deemed to be served at the time when the same is handed to or left at the address of the party to be served and if served by post or facsimile transmission at the time it would have been received in the normal course of post or facsimile transmission.
6.	The Company agrees and consents to the foregoing and further undertakes to the Assignor that it will henceforth make all payments of the Loan and discharge all its obligations in respect thereof to the Assignee directly instead of to the Assignor.
7.	This Deed shall be governed by and construed in all respects in accordance with the laws of Hong Kong and the parties hereto hereby submit to the non-exclusive jurisdiction of the Hong Kong Courts in relation to any proceeding arising out of or in connection with this Deed.

2

IN WITNESS whereof the parties both caused their respective common seals to be hereunto affixed the day and year first above written.

SEALED with the common seal of	)
J.I.C. Technology Company Limited	)	/s/ Koo Ming Kown
and signed by its director	)
Mr. Koo Ming Kown	)
at Unit C, 17/F, Edificio Comercial Rodrigues,	)
599 Da Avenida Da Praia Grande, Macao	)
in the presence of:
/s/ K. H. Lee
K. H. Lee
Senior In-House Counsel
SEALED with the common seal of	)
Top Eastern Investment Limited	)	/s/ Chui Kam Wai
and signed by its director	)
Mr. Chui Kam Wai	)
at Unit C, 17/F, Edificio Comercial Rodrigues,	)
599 Da Avenida Da Praia Grande, Macao	)
in the presence of:
/s/ K. H. Lee
K. H. Lee
Senior In-House Counsel
SEALED with the common seal of	)
Jetup Electronic (Shenzhen) Co., Ltd.	)	/s/ Chui Kam Wai
and signed by its director	)
Mr. Chui Kam Wai	)
at Unit C, 17/F, Edificio Comercial Rodrigues,	)
599 Da Avenida Da Praia Grande, Macao	)
in the presence of:
/s/ K. H. Lee
K. H. Lee
Senior In-House Counsel

3

EX-4.46

EXHIBIT 4.46

THIS DEED OF RELEASE is made this 31^st day of December 2007

BETWEEN:

J.I.C. TECHNOLOGY COMPANY LIMITED, a company duly incorporated and existing under the laws of the Cayman Islands and whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (“JIC”); and

TOP EASTERN INVESTMENT LIMITED, a company duly incorporated and existing under the laws of Hong Kong and whose registered office is at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong (“Top Eastern”).

WHEREAS:

(A)	JIC is the holding company of First Rich Holdings Limited (“First Rich”).
(B)	First Rich is the holding company of Top Eastern.
(C)	Top Eastern is the holding company of Jetup Electronic (Shenzhen) Co., Ltd. (“Jetup”).
(D)	There is now due and owing from Top Eastern to JIC the sum of HK$181,200,000 (the “Loan”), being an interest-free loan advanced by JIC to Top Eastern.
(E)	By a Sale and Purchase Agreement dated 24 September 2007 supplemented by a Supplemental Agreement dated 5 October 2007 and further supplemented by a Supplemental Agreement dated 28 November 2007, JIC agreed to sell to Nam Tai Electronics, Inc. (“NTEI”) the equity interest in Jetup free from all liens, charges, encumbrances and adverse interests for the consideration of HK$381,767,378.
(F)	By another Sale and Purchase Agreement dated 24 September 2007 supplemented by a Supplemental Agreement dated 28 November 2007, NTEI agreed to sell to Nam Tai Electronic & Electrical Products Limited (“NTEEP”), among other things, the equity interest in Jetup free from all liens, charges, encumbrances and adverse interests for the consideration of HK$281,930,000.

1

(G)	NTEI and NTEEP have requested JIC to transfer JIC’s equity interest in Jetup to NTEEP direct by transferring to NTEEP JIC’s equity interest in First Rich, which is the holding company of Top Eastern, which in turn is the holding company of Jetup.
(H)	In order to transfer JIC’s equity interest in Jetup to NTEEP free from all liens, charges, encumbrances and adverse interests in the manner aforesaid, it is necessary for JIC to renounce its right to repayment of the Loan and/or waive repayment of the Loan and/or release Top Eastern from all obligations to repay the Loan or any part thereof to JIC.

NOW THIS DEED WITNESSES AND IT IS AGREED as follows:

1. In consideration of the premises and in order to enable JIC to transfer its equity interest in Jetup to NTEEP in the manner aforesaid free from all liens, charges, encumbrances and adverse interests, JIC as beneficial owner hereby renounces and disclaims its right to repayment of the Loan by Top Eastern and/or waives repayment of the Loan by Top Eastern and/or releases and discharges Top Eastern from all obligations to repay the Loan or any part or parts thereof to JIC and from all liabilities whatsoever in respect of or related to the Loan.

2. This Deed shall be governed by and construed in all respects in accordance with the laws of the Cayman Islands and the parties hereby submit to the non-exclusive jurisdiction of the courts of the Cayman Islands.

IN WITNESS WHEREOF the parties have executed this Deed on the day and year first above written.

2

SEALED with the Common Seal of	)
J.I.C.TECHNOLOGY COMPANY	)
LIMITED and SIGNED byMr. Koo	)	/s/ Koo Ming Kown
Ming Kown, its director in the presence	)
of :- /s/ K. H. Lee	)
K. H. Lee	)
Senior In-House Counsel
SEALED with the Common Seal of	)
TOP EASTERN INVESTMENT	)	/s/ Chui Kam Wai
LIMITED and SIGNED by Mr. Chui	)
Kam Wai, its director in the presence	)
of : /s/ K. H. Lee	)
K. H. Lee
Senior In-House Counsel-

3 EX-4.47 34 v38999exv4w47.htm EXHIBIT 4.47

EXHIBIT 4.47

THIS DEED OF RELEASE is made this 31^st day of December 2007

BETWEEN:

NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED, a company duly incorporated and existing under the laws of the Cayman Islands and whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (“NTEEP”); and

BEST WHOLE HOLDINGS LIMITED, a company duly incorporated and existing under the laws of Hong Kong and whose registered office is at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong (“Best Whole”).

WHEREAS:

(A)	NTEEP is the holding company of Joy Holdings Limited (“Joy Holdings”).
(B)	Joy Holdings is the holding company of Best Whole.
(C)	Best Whole is the holding company of Shenzhen Namtek Co., Ltd. (“Shenzhen Namtek”).

(D) There is now due and owing from Best Whole to NTEEP the sum of US$800,000 (the “Loan”), being an interest-free loan advanced by NTEEP to Best Whole.

(E) By a Sale and Purchase Agreement dated 5 October 2007 supplemented by a Supplemental Agreement dated 28 November 2007, NTEEP agreed to sell to J.I.C. Technology Company Limited (“JIC”), among other things, the equity interest in Shenzhen Namtek free from all liens, charges, encumbrances and adverse interests for the consideration of HK$79,845,667.

1

(F) JIC has requested NTEEP to transfer NTEEP’s equity interest in Shenzhen Namtek to JIC by transferring to JIC NTEEP’s equity interest in Joy Holdings, which is the holding company of Best Whole, which in turn is the holding company of Shenzhen Namtek.

(G) In order to transfer NTEEP’s equity interest in Shenzhen Namtek to JIC free from all liens, charges, encumbrances and adverse interests in the manner aforesaid, it is necessary for NTEEP to renounce its right to repayment of the Loan and/or waive repayment of the Loan and/or release Best Whole from all obligations to repay the Loan or any part thereof to NTEEP.

NOW THIS DEED WITNESSES AND IT IS AGREED as follows:

1. In consideration of the premises and in order to enable NTEEP to transfer its equity interest in Shenzhen Namtek to JIC in the manner aforesaid free from all liens, charges, encumbrances and adverse interests, NTEEP as beneficial owner hereby renounces and disclaims its right to repayment of the Loan by Best Whole and/or waives repayment of the Loan by Best Whole and/or releases and discharges Best Whole from all obligations to repay the Loan or any part or parts thereof to NTEEP and from all liabilities whatsoever in respect of or related to the Loan.

2. This Deed shall be governed by and construed in all respects in accordance with the laws of the Cayman Islands and the parties hereby submit to the non-exclusive jurisdiction of the courts of the Cayman Islands.

IN WITNESS WHEREOF the parties have executed this Deed on the day and year first above written.

2

SEALED with the Common Seal of	)
NAM TAI ELECTRONIC &	)
ELECTRICAL PRODUCTS	)	/s/ Koo Ming Kown
LIMITED and SIGNED by Mr.Koo	)
Ming Kown, its director in the presence	)
of :- /s/ K. H. Lee	)
K. H. Lee
Senior In-House Counsel
SEALED with the Common Seal of	)
BEST WHOLE HOLDINGS	)	/s/ Wong Kuen Ling, Karene
LIMITED and SIGNED by Ms. Wong	)
Kuen Ling, Karene, its director in	)
the presence of :- /s/ K. H. Lee	)
K. H. Lee
Senior In-House Counsel

3

EX-4.47

exv4w47

EX-4.48

Exhibit 4.48

[Letterhead of HSBC]

CONFIDENTIAL

Jetup Electronic (Shenzhen) Company Limited
Sanyidui Industrial Zone,
Zhoushi Road, Jiuwei Village,
Xixiang Town, Bao’an District,
Shenzhen, P.R.C                                                                                                                                             02January2008

Attn: Mr. John Farina;
Ms. Connie Sit;
Mr. Gawain Chan;

Dear Sir and Madam,

Ref: BANKING FACILITY

We refer to our facility letter dated 7 June 2007 (the “Facility Letter”) and are pleased to advise that the Facility Letter shall be amended as follows:

Borrower	:	Jetup Electronic (Shenzhen) Company Limited
Lender:	:	HSBC Bank (China) Company Limited, Shenzhen Branch.
Security	:	Previous: Corporate Guarantee for HKD110,000,000.- from J.I.C. Technology Company Limited supported by board resolution.
		New: Corporate Guarantee for HKD110,000,000.- from Nam Tai Electronic & Electrical Products Limited to be supported by board resolution.

All other terms and conditions stipulated in our Facility Letter of 7 June 2007 remain unchanged.

In all other respects, the Facility Letter shall remain in full force and effect, including our right to review those facilities, withdraw and demand for repayment at any time.

Please confirm your agreement by arranging for the duplicate of this letter to be signed and returned to the Bank at the above address on or before 02 February 2008.

1

We are pleased to be of continued assistance.

Yours sincerely,

For and on behalf of	Accepted by
HSBC Bank (China) Company Limited	Jetup Electronic (Shenzhen) Company
Shenzhen Branch	Limited

/s/ Faye Zhou	/s/ [signature illegible]
Faye Zhou	Authorised Signature(s) & Chop
Vice President	Date: [In Chinese]
Commercial Banking	[Chop In Chinese]]

/s/ Barry Yiu

Barry Yiu

Senior Vice President

Commercial Banking

2

EX-4.49

Exhibit 4.49

(HK-law-governed Version)

To : HSBC Bank (China) Company Limited Shenzhen Branch

GUARANTEE BY LIMITED COMPANY (Limited Amount — Under Common/Corporate Seal)

1.	Definitions
	“Bank” means HSBC Bank (China) Company Limited Shenzhen Branch and its successors and assigns;
	“Banking Facilities” means such facilities as the Bank may make or continue to make available to the Customer or to any other person at the request of the Customer;
	“Customer” means the person whose name and address are specified in the Schedule;
	“Default Interest” means interest at such rate as the Bank may specify, compounded monthly if not paid on the dates specified by the Bank;
	“Exchange Rate” means the rate for converting one currency into another currency which the Bank determines to be prevailing in the relevant foreign exchange market at the relevant time, such determination to be conclusive and binding on the Guarantor;
	“Guaranteed Moneys” means (i) all moneys in any currency owing by the Customer to the Bank at any time, actually or contingently, in any capacity, alone or jointly with any other person, (ii) interest on such moneys (both before and after any demand or judgment), to the date on which the Bank receives payment, at the rates payable by the Customer or which would have been payable but for any circumstance which restricts payment and (iii) expenses of the Bank in enforcing this Guarantee on a full indemnity basis;
	“Guarantor” means the person whose name and address are specified in the Schedule;
	“Maximum Liability” means the sum specified in the Schedule plus Default Interest on that sum or part thereof (to the extent that it is not paid by the Guarantor on demand by the Bank) and expenses of the Bank in enforcing this Guarantee on a full indemnity basis; where a liability for Guaranteed Moneys is incurred in a currency different from the currency in which the Maximum Liability is stated and the equivalent of that liability in the currency in which the Maximum Liability is stated, calculated at the Exchange Rate, has increased since it was incurred, that increase shall be added to the Maximum Liability;
	“person” includes an individual, firm, company, corporation and an unincorporated body of persons; and
	“Process Agent” means the person, if any, whose name and Hong Kong address are specified in the Schedule.
2.	Guarantee

     In consideration of the Banking Facilities, the Guarantor guarantees to pay the Guaranteed Moneys to the Bank on demand.

     The liability of the Guarantor shall not exceed the Maximum Liability.

     The Guarantor shall pay Default Interest (to the extent that it is not paid by the Customer) on the Guaranteed Moneys from the date of demand by the Bank on the Guarantor until the Bank receives payment of the whole of the Guaranteed Moneys (both before and after any demand or judgment or any circumstance which restricts payment by the Customer).

     A certificate of balance signed by any duly authorized officer of the Bank shall be conclusive evidence against the Guarantor of the amount of the Guaranteed Moneys owing at any time.

     The Bank shall be entitled to retain this Guarantee and any security it has in respect of the Guaranteed Moneys for such period as the Bank may certify to the Guarantor to be appropriate in order to protect the interests of the Bank in respect of the Guaranteed Moneys.

3. Continuing and Additional Security

     This Guarantee is a continuing security and shall secure the whole of the Guaranteed Moneys until one calendar month after receipt by the Bank of notice in writing by the Guarantor or a liquidator or receiver of the Guarantor to terminate it. Nevertheless and despite the giving of such notice, this Guarantee shall continue to apply to the Guaranteed Moneys in respect of which the Customer is or becomes actually or contingently liable up to such termination and the Guarantor guarantees to pay such Guaranteed Moneys to the Bank on demand whether that demand is made before, at the time of or after such termination.

     This Guarantee is in addition to, shall not be affected by and may be enforced despite the existence of any other guarantee or security held by the Bank.

4.	Customer’s Accounts
	The Bank may, at any time and despite the termination of this Guarantee, continue any existing account and open any new account in the name of the Customer and no subsequent transactions, receipts or payments involving such new accounts shall affect the liability of the Guarantor.

1

5. Payments

     Payments by the Guarantor shall be made to the Bank as specified by the Bank without any set-off, counterclaim, withholding or condition of any kind except that, if the Guarantor is compelled by law to make such withholding, the sum payable by the Guarantor shall be increased so that the amount actually received by the Bank is the amount it would have received if there had been no withholding.

     Payment by the Guarantor to the Bank shall be in the currency of the relevant liability or, if the Bank so agrees in writing, in a different currency, in which case the conversion to that different currency shall be made at the Exchange Rate.

     No payment to the Bank under this Guarantee pursuant to any judgment, court order or otherwise shall discharge the obligation of the Guarantor in respect of which it was made unless and until payment in full has been received in the currency in which it is payable under this Guarantee and, to the extent that the amount of any such payment shall, on actual conversion into such currency, at the Exchange Rate, fall short of the amount of the obligation, expressed in that currency, the Guarantor shall be liable for the shortfall.

     Any moneys paid to the Bank in respect of the Guaranteed Moneys may be applied in or towards satisfaction of the same or placed to the credit of such account as the Bank may determine with a view to preserving its rights to prove for the whole of the Guaranteed Moneys.

     If any moneys paid to the Bank in respect of the Guaranteed Moneys are require dto be repaid by vitue of any law relating to insolvency, bankruptcy or liquidation or for any other reason, the Bank shall be entitled to enforce this Guarantee as if such moneys had not been paid.

6.	Set-off
	The Bank may, at any time and without notice, apply any credit balance to which the Guarantor is entitled on any account with the Bank in or towards satisfaction of the Guaranteed Moneys. For this purpose, the Bank is authorized to purchase, at the Exchange Rate, such other currencies as may be necessary to effect such application with the moneys standing to the credit of such account.

7.	Lien
	The Bank is authorized to exercise a lien over all property of the Guarantor coming into the possession or control of the Bank, for custody or any other reason and whether or not in the ordinary course of banking business, with power for the Bank to sell such property to satisfy the Guaranteed Moneys.
8.	Guarantor as Principal Debtor
	The liability of the Guarantor under this Guarantee shall not be discharged or otherwise affected by reason of the Bank entering into any agreement or arrangement with the Customer or any other person or by reason of any legal limitation, disability or incapacity or any other act, omission or circumstance which, but for this provision, would discharge the Guarantor to any extent. Any Guaranteed Moneys which may not be recoverable from the Customer for any such reason shall be recoverable by the Bank from the Guarantor as principal debtor by way of indemnity, on demand, together with Default Interest thereon in accordance with Clause 2.03.
9.	Guarantor as Trustee

     The Guarantor shall not, until the whole of the Guaranteed Moneys have been received by the Bank, exercise its rights of subrogation, indemnity, set-off counterclaim against the Customer or its rights to participate in any security the Bank has in respect of the Guaranteed Moneys, or , unless required by the Bank to do so, to prove in the bankruptcy or liquidation of the Customer. The Guarantor shall hold any amount recovered, as a result of the exercise of any of such rights, on trust for the Bank and shall pay the same to the Bank immediately on receipt.

     The Guarantor has not taken any security from the Customer and agrees not to do so until the Bank has received the whole of the Guaranteed Moneys. Any security taken by the Guarantor in breach of this provision shall be held in trust for the Bank as security for the Guaranteed Moneys and all moneys at any time received in respect thereof shall be paid to the Bank immediately on receipt.

10.	No Waiver
	No act or omission by the Bank pursuant to his Guarantee shall affect its rights, powers and remedies hereunder or any further or other exercise of such rights, powers or remedies.
11.	Consent

2

The Guarantor agrees that the Bank may, for such purposes as the Bank may consider reasonably appropriate, disclose and/or obtain information concerning the Guarantor (including details of and relating to all or any transactions or dealings between the Guarantor and the Bank) to or from:

(a)	any agent, contractor or third party service provider (whether situated within or outside Hong Kong) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(b)	credit reference agencies;
(c)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations or judicial process; and
(d)	any actual or proposed participant or sub-participant of the Banking Facilities (or any part thereof).

In the event that such information includes the personal or other data of any third party or individual, the Guarantor confirms and warrants that it has obtained the consent of such third party or individual to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this Clause. The Guarantor will indemnify and hold the Bank harmless from all costs, penalties, damages and other losses incurred as the result of any breach of the terms of this Clause.

12. Assignment

     The Guarantor may not assign or transfer any of its rights or obligations hereunder. The Bank may assign any of its rights hereunder to a person in whose favour its has made an assignment of all or any of the Banking Facilities.

     Without prejudice to the foregoing and any right of assignment enjoyed by the Bank under any applicable law or any other documents, the Bank may, without the Guarantor’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or to any branch or sub-branch of the Bank.

13.

Communications

Any notice, demand or other communication under this Guarantee shall be in writing addressed to the Guarantor at its registered office address or at the last address registered with the Bank and addressed to the Bank at its office specified in the Schedule or such other address as the Bank may notify to the Guarantor for this purpose any may be delivered personally, by leaving it at such address, by post, facsimile transmission or telex and shall be deemed to have been delivered to the Guarantor at the time of personal delivery or on leaving it at such address or on the second day following the day of posting or on the day of dispatch, if sent by facsimile transmission or telex, and to the Bank on the day of actual receipt.

14.	Severability
	Each of the provisions of this Guarantee is severable and distinct from the others and, if one or more of such provisions is or becomes illegal, invalid or unenforceable, the remaining provisions shall not be affected in any way.
15.	Governing Law and Jurisdiction

     The Guarantee is governed by and shall be construed in accordance with the laws of the Hong Kong Special Administrative Region (“Hong Kong”).

     The Guarantor submits to the non-exclusive jurisdiction of the Hong Kong courts but this Guarantee may be enforced in the courts of any competent jurisdiction.

16. Governing Version

	This Guarantee is executed in an English version and/or a Chinese version. In case both versions are executed, the English version is the governing version and shall prevail whenever there is any discrepancy between the English version and the Chinese version.
17.	Process Agent
	If a Process Agent is specified in the Schedule, service of any legal process on the Process Agent shall constitute service on the Guarantor.
18.	Execution
	This Guarantee has been entered into by the Guarantor under its common corporate seal, whichever may be affixed below, on 31 Dec 2007

3

     Schedule

Address of Bank’s Office (for the purpose of Clause 13 only)

8/F, China Resources Building, No. 5001, Shennan Road East, Luohu District, Shenzhen

Details of Customer

Name	*Address
Jetup Electronic (Shenzhen) Co., Ltd.	Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village,
	Xixiang, Baoan, Shenzben, PRC

Details of Guarantor

Name	*Address
Nam Tai Electronic & Electrical Products Limited	Suites 1506-1508, 15th Floor, One Exchange Square, 8
	Connaught Place, Central, Hong Kong

Specified Sum in Respect of Maximum Liability *

HK$110,000,000.- plus interest, fees and expenses.

Details of Process Agent

Name *Address

Executed under the Seal of the Guarantor in the presence of the following Director(s) and/or Secretary:

Signature of Director/Secretary	Signature of Director/Secretary
Original Signed By Mr. John Farina	Original Signed By Ms. WONG Kuen Ling
Name	Name
John Farina	WONG Kuen Ling
Office	Office
Director	Director
Identification Document Type and Number	Identification Document Type and Number
Canadian Passport No. JP568587	H.K.I.D. No. E974846(A)
Witnessed by:
Signature of Witness	Signature of Witness
Original Signed By Mr. WONG Long Kee	Original Signed By Mr. WONG Long Kee
Name	Name
WONG Long Kee	WONG Long Kee
Office	Office
Company Secretary	Company Secretary
Identification Document Type and Number	Identification Document Type and Number
H.K.I.D. No. K003729(A)	H.K.I.D. No. K003729(A)

*	P O Box is not acceptable
*	Please inset below the principal amount of the Banking Facilities.

4

EX-4.50

Exhibit 4.50

CONFIDENTIAL

Zastron Electronic (Shenzhen) Company Limited
Gusu Industrial Estate,
Xixiang, Baoan,
Shenzhen, PRC                                                                                                                                                               02January2008

Attn: Mr. John Farina;
Ms. Connie Sit;
Mr. Gawain Chan;

Dear Sir and Madam,

Ref: BANKING FACILITY

We refer to our facility letter dated 7 June 2007 (the “Facility Letter”) and are pleased to advise that the Facility Letter shall be amended as follows:

Borrower	:	Zastron Electronic (Shenzhen) Company Limited
Lender:	:	HSBC Bank (China) Company Limited, Shenzhen Branch.
Security	:	Previous: Corporate Guarantee for USD10,000,000.- from Nam Tai Electronics, Inc., supported by board resolution.
		New: Corporate Guarantee for USD10,000,000.- from Nam Tai Electronic & Electrical Products Limited to be supported by board resolution.

All other terms and conditions stipulated in our Facility Letter of 7 June 2007 remain unchanged.

In all other respects, the Facility Letter shall remain in full force and effect, including our right to review those facilities, withdraw and demand for repayment at any time.

Please confirm your agreement by arranging for the duplicate of this letter to be signed and returned to the Bank at the above address on or before 02 February 2008.

1

We are pleased to be of continued assistance.

Yours sincerely,

For and on behalf of	Accepted by
HSBC Bank (China) Company Limited	Zastron Electronic (Shenzhen)
Shenzhen Branch	Company Limited

	[Chop in Chinese]
/s/ Fay Zhou	/s/ [signature illegible]
Faye Zhou	Authorised Signature(s) & Chop
Vice President	Date:
Commercial Banking

Barry Yiu

Barry Yiu

Senior Vice President

Commercial Banking

2

EX-4.51

Exhibit 4.51

(HK-law-governed Version)

To : HSBC Bank (China) Company Limited Shenzhen Branch

GUARANTEE BY LIMITED COMPANY (Limited Amount — Under Common/Corporate Seal)

1.	Definitions
	“Bank” means HSBC Bank (China) Company Limited Shenzhen Branch and its successors and assigns;
	“Banking Facilities” means such facilities as the Bank may make or continue to make available to the Customer or to any other person at the request of the Customer;
	“Customer” means the person whose name and address are specified in the Schedule;
	“Default Interest” means interest at such rate as the Bank may specify, compounded monthly if not paid on the dates specified by the Bank;
	“Exchange Rate” means the rate for converting one currency into another currency which the Bank determines to be prevailing in the relevant foreign exchange market at the relevant time, such determination to be conclusive and binding on the Guarantor;
	“Guaranteed Moneys” means (i) all moneys in any currency owing by the Customer to the Bank at any time, actually or contingently, in any capacity, alone or jointly with any other person, (ii) interest on such moneys (both before and after any demand or judgment), to the date on which the Bank receives payment, at the rates payable by the Customer or which would have been payable but for any circumstance which restricts payment and (iii) expenses of the Bank in enforcing this Guarantee on a full indemnity basis;
	“Guarantor” means the person whose name and address are specified in the Schedule;
	“Maximum Liability” means the sum specified in the Schedule plus Default Interest on that sum or part thereof (to the extent that it is not paid by the Guarantor on demand by the Bank) and expenses of the Bank in enforcing this Guarantee on a full indemnity basis; where a liability for Guaranteed Moneys is incurred in a currency different from the currency in which the Maximum Liability is stated and the equivalent of that liability in the currency in which the Maximum Liability is stated, calculated at the Exchange Rate, has increased since it was incurred, that increase shall be added to the Maximum Liability;
	“person” includes an individual, firm, company, corporation and an unincorporated body of persons; and
	“Process Agent” means the person, if any, whose name and Hong Kong address are specified in the Schedule.
2.	Guarantee

In consideration of the Banking Facilities, the Guarantor guarantees to pay the Guaranteed Moneys to the Bank on demand.

The liability of the Guarantor shall not exceed the Maximum Liability.

     The Guarantor shall pay Default Interest (to the extent that it is not paid by the Customer) on the Guaranteed Moneys from the date of demand by the Bank on the Guarantor until the Bank receives payment of the whole of the Guaranteed Moneys (both before and after any demand or judgment or any circumstance which restricts payment by the Customer).

     A certificate of balance signed by any duly authorized officer of the Bank shall be conclusive evidence against the Guarantor of the amount of the Guaranteed Moneys owing at any time.

     The Bank shall be entitled to retain this Guarantee and any security it has in respect of the Guaranteed Moneys for such period as the Bank may certify to the Guarantor to be appropriate in order to protect the interests of the Bank in respect of the Guaranteed Moneys.

3. Continuing and Additional Security

     This Guarantee is a continuing security and shall secure the whole of the Guaranteed Moneys until one calendar month after receipt by the Bank of notice in writing by the Guarantor or a liquidator or receiver of the Guarantor to terminate it. Nevertheless and despite the giving of such notice, this Guarantee shall continue to apply to the Guaranteed Moneys in respect of which the Customer is or becomes actually or contingently liable up to such termination and the Guarantor guarantees to pay such Guaranteed Moneys to the Bank on demand whether that demand is made before, at the time of or after such termination.

     This Guarantee is in addition to, shall not be affected by and may be enforced despite the existence of any other guarantee or security held by the Bank.

4.	Customer’s Accounts
	The Bank may, at any time and despite the termination of this Guarantee, continue any existing account and open any new account in the name of the Customer and no subsequent transactions, receipts or payments involving such new accounts shall affect the liability of the Guarantor.

1

5. Payments

     Payments by the Guarantor shall be made to the Bank as specified by the Bank without any set-off, counterclaim, withholding or condition of any kind except that, if the Guarantor is compelled by law to make such withholding, the sum payable by the Guarantor shall be increased so that the amount actually received by the Bank is the amount it would have received if there had been no withholding.

     Payment by the Guarantor to the Bank shall be in the currency of the relevant liability or, if the Bank so agrees in writing, in a different currency, in which case the conversion to that different currency shall be made at the Exchange Rate.

     No payment to the Bank under this Guarantee pursuant to any judgment, court order or otherwise shall discharge the obligation of the Guarantor in respect of which it was made unless and until payment in full has been received in the currency in which it is payable under this Guarantee and, to the extent that the amount of any such payment shall, on actual conversion into such currency, at the Exchange Rate, fall short of the amount of the obligation, expressed in that currency, the Guarantor shall be liable for the shortfall.

     Any moneys paid to the Bank in respect of the Guaranteed Moneys may be applied in or towards satisfaction of the same or placed to the credit of such account as the Bank may determine with a view to preserving its rights to prove for the whole of the Guaranteed Moneys.

     If any moneys paid to the Bank in respect of the Guaranteed Moneys are require dto be repaid by vitue of any law relating to insolvency, bankruptcy or liquidation or for any other reason, the Bank shall be entitled to enforce this Guarantee as if such moneys had not been paid.

6.	Set-off
	The Bank may, at any time and without notice, apply any credit balance to which the Guarantor is entitled on any account with the Bank in or towards satisfaction of the Guaranteed Moneys. For this purpose, the Bank is authorized to purchase, at the Exchange Rate, such other currencies as may be necessary to effect such application with the moneys standing to the credit of such account.
7.	Lien
	The Bank is authorized to exercise a lien over all property of the Guarantor coming into the possession or control of the Bank, for custody or any other reason and whether or not in the ordinary course of banking business, with power for the Bank to sell such property to satisfy the Guaranteed Moneys.
8.	Guarantor as Principal Debtor
	The liability of the Guarantor under this Guarantee shall not be discharged or otherwise affected by reason of the Bank entering into any agreement or arrangement with the Customer or any other person or by reason of any legal limitation, disability or incapacity or any other act, omission or circumstance which, but for this provision, would discharge the Guarantor to any extent. Any Guaranteed Moneys which may not be recoverable from the Customer for any such reason shall be recoverable by the Bank from the Guarantor as principal debtor by way of indemnity, on demand, together with Default Interest thereon in accordance with Clause 2.03.
9.	Guarantor as Trustee

     The Guarantor shall not, until the whole of the Guaranteed Moneys have been received by the Bank, exercise its rights of subrogation, indemnity, set-off counterclaim against the Customer or its rights to participate in any security the Bank has            in respect of the Guaranteed Moneys, or , unless required by the Bank to do so, to prove in the bankruptcy or liquidation of the Customer. The Guarantor shall hold any amount recovered, as a result of the exercise of any of such rights, on trust for the Bank and shall pay the same to the Bank immediately on receipt.

     The Guarantor has not taken any security from the Customer and agrees not to do so until the Bank has received the whole of the Guaranteed Moneys. Any security taken by the Guarantor in breach of this provision shall be held in trust for the Bank as security for the Guaranteed Moneys and all moneys at any time received in respect thereof shall be paid to the Bank immediately on receipt.

10.	No Waiver
	No act or omission by the Bank pursuant to his Guarantee shall affect its rights, powers and remedies hereunder or any further or other exercise of such rights, powers or remedies.
11.	Consent

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The Guarantor agrees that the Bank may, for such purposes as the Bank may consider reasonably appropriate, disclose and/or obtain information concerning the Guarantor (including details of and relating to all or any transactions or dealings between the Guarantor and the Bank) to or from:

(a)	any agent, contractor or third party service provider (whether situated within or outside Hong Kong) which provides administrative, telecommunications, computer, payment, processing or other services to the Bank in connection with the operation of its business;
(b)	credit reference agencies;
(c)	any person to whom the Bank is under an obligation to make disclosure under the requirements of any applicable laws, regulations or judicial process; and
(d)	any actual or proposed participant or sub-participant of the Banking Facilities (or any part thereof).

In the event that such information includes the personal or other data of any third party or individual, the Guarantor confirms and warrants that it has obtained the consent of such third party or individual to the provision of such data to the Bank for such purposes and for disclosure to such persons as referred to in this Clause. The Guarantor will indemnify and hold the Bank harmless from all costs, penalties, damages and other losses incurred as the result of any breach of the terms of this Clause.

12. Assignment

     The Guarantor may not assign or transfer any of its rights or obligations hereunder. The Bank may assign any of its rights hereunder to a person in whose favour its has made an assignment of all or any of the Banking Facilities.

     Without prejudice to the foregoing and any right of assignment enjoyed by the Bank under any applicable law or any other documents, the Bank may, without the Guarantor’s consent, assign any and/or all of its rights and obligations hereunder to any HSBC Group member(s) that are/is more than 50% owned or controlled by HSBC Group or to any branch or sub-branch of the Bank.

13.	Communications
	Any notice, demand or other communication under this Guarantee shall be in writing addressed to the Guarantor at its registered office address or at the last address registered with the Bank and addressed to the Bank at its office specified in the Schedule or such other address as the Bank may notify to the Guarantor for this purpose any may be delivered personally, by leaving it at such address, by post, facsimile transmission or telex and shall be deemed to have been delivered to the Guarantor at the time of personal delivery or on leaving it at such address or on the second day following the day of posting or on the day of dispatch, if sent by facsimile transmission or telex, and to the Bank on the day of actual receipt.
14.	Severability
	Each of the provisions of this Guarantee is severable and distinct from the others and, if one or more of such provisions is or becomes illegal, invalid or unenforceable, the remaining provisions shall not be affected in any way.

15. Governing Law and Jurisdiction

     The Guarantee is governed by and shall be construed in accordance with the laws of the Hong Kong Special Administrative Region (“Hong Kong”).

     The Guarantor submits to the non-exclusive jurisdiction of the Hong Kong courts but this Guarantee may be enforced in the courts of any competent jurisdiction.

16.	Governing Version
	This Guarantee is executed in an English version and/or a Chinese version. In case both versions are executed, the English version is the governing version and shall prevail whenever there is any discrepancy between the English version and the Chinese version.
17.	Process Agent
	If a Process Agent is specified in the Schedule, service of any legal process on the Process Agent shall constitute service on the Guarantor.
18.	Execution
	This Guarantee has been entered into by the Guarantor under its common corporate seal, whichever may be affixed below, on 31 Dec 2007

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Schedule

Address of Bank’s Office (for the purpose of Clause 13 only)

8/F, China Resources Building, No. 5001, Shennan Road East, Luohu District, Shenzhen

Details of Customer
Name	*Address
Zastron Electronic (Shenzhen) Co., Ltd.	Gu Su Industrial Estate, Xixiang, Baoan, Shenzhen, PRC
Details of Guarantor
Name	*Address
Nam Tai Electronic & Electrical Products Limited	Suites 1506 1508, 15th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong

Specified Sum in Respect of Maximum Liability *

USD10,000,000. plus interest, fees and expenses.

Details of Process Agent
Name	*Address
Executed under the Seal of the Guarantor in the presence of the following Director(s) and/or Secretary:
Signature of Director/Secretary	Signature of Director/Secretary
Original Signed By Mr. John Farina	Original Signed By Ms. WONG Kuen Ling, Karene
Name	Name
John Quinto Farina	WONG Kuen Ling, Karene
Office	Office
Director	Director
Identification Document Type and Number	Identification Document Type and Number
Canadian Passport No. JP568587	H.K.I.D. No. E974846(A)
Witnessed by:
Signature of Witness	Signature of Witness
Original Signed By Mr. WONG Long Kee	Original Signed By Mr. WONG Long Kee
Name	Name
WONG Long Kee	WONG Long Kee
Office	Office
Company Secretary	Company Secretary
Identification Document Type and Number	Identification Document Type and Number
H.K.I.D. No. K003729(A)	H.K.I.D. No. K003729(A)

*	P O Box is not acceptable
*	Please inset below the principal amount of the Banking Facilities.

4

EX-4.52

Exhibit 4.52

Shanghai Commercial Bank LTD

Shenzhen Branch

26/F, Shenzhen International Finance Mansion, 2022 Jianshe Road, Shenzhen
Tel: (755) 82200319 Fax: (755) 82204964

Reference Number: SZ0511023/BT
Date: Dec. 31, 2007

Jetup Electronic (Shenzhen) Co. Ltd
Block A, B, C, D, Sanyidui Industrial Zone, Zhoushi Road, Jiuwei Village,
Xixiang Town, Bao’an District, Shenzhen

Addressee: Mr. Colin Yoeh / Mr. Thomas Lai

Dear Sir or Madam:

Complementation Agreement:
Jetup Electronic (Shenzhen) Co. Ltd (“Borrower”)

According to the request from your company, Shanghai Commercial Bank Shenzhen Branch (hereinafter referred to as “the Bank”) agreeably inform you that term(s) of the Letter of Credit Extension for Bank Loans Accommodation (Reference No.: SZ0511023/BT) has been modified as follows:

Security and/or guaranty

þ The Contract of Guaranty in the standard format of the Bank, with security money Five Million USD only, signed by Nam Tai Electronic & Electrical Products Ltd. in cordiality.

     The rest terms remain unchanged.

This written complementation agreement is an undivided integral part of the Letter of Credit Extension for Bank Loans Accommodation (Reference No.: SZ0511023/BT). The Complementation Agreement and the Letter of Credit Extension are equally valid. The Complementation Agreement will go into effect from the date of being signed and submitted to the Bank by the Borrower.

If there is any questions, please contact Mr. Wang Dongliang, who is in charge of the affair, at 86-755-82227606.

Shanghai Commercial Bank LTD

Shanghai Commercial Bank Ltd. Shenzhen Branch

/s/ Yao Jinxiong /s/ Zheng Lifen [Chop of Shanghai Commercial Bank Ltd.]                                          (Official Seal)
Name of Authorized Signer: Yao Jinxiong / Zheng Lifen

Position: Vice President of the Bank / Operation Director

The Borrower and guarantor agree to accept all terms and conditions of this letter.

Borrower: Jetup Electronic (Shenzhen) Co. Ltd.(Official Seal)

/s/ [signature illegible]

                                                            
Name of Legal Representative/Authorized Representative
[
[In Chinese]
Position:

[In Chinese]
Date:
Guarantor:
Nam Tai Electronic & Electrical Products Ltd

For and on behalf of
NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

/s/ [signature illegible]
(Signature)
Authorized Signature               
Name of Legal Representative/Authorized Representative
[In Chinese]
Position:
[In Chinese]
Date:

EX-4.53

Exhibit 4.53

Execution Version

DATED February 6, 2008

HONG KONG ENERGY (HOLDINGS) LIMITED

and

NAM TAI ELECTRONICS, INC.

EXCLUSIVITY AGREEMENT

Baker & McKenzie
14th Floor Hutchison House
Hong Kong

Tel: (852) 2846-1888
Fax: (852) 2845-0476

Ref.: LKL/RCC/HOL

THIS AGREEMENT is made on the 6^th day of February 2008

BETWEEN:

(1)	HONG KONG ENERGY (HOLDINGS) LIMITED, a company incorporated in Bermuda, whose principal office in Hong Kong is situated at 9th Floor, Tower 1, South Seas Centre, 75 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong (“HKE”); and
(2)	NAM TAI ELECTRONICS, INC., a company incorporated in the British Virgin Islands, whose principal office in Hong Kong is situated at Suites 1506-1508, 15th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong (“Nam Tai”).

WHEREAS:

(A)

HKE is a wholly-owned subsidiary of HKC (Holdings) Limited, a company incorporated in Bermuda whose shares are listed on the main board of The Stock Exchange of Hong Kong Limited.

(B)

HKC (Holdings) Limited and Nam Tai have been negotiating on a potential sale of shares in J.I.C. Technology Company Limited (the “Company”) by Nam Tai to HKC who intends to transact through HKE (the “Transaction”). For this purpose, Nam Tai is to allow due diligence and a more detailed investigation of the Company and its subsidiaries (the “Group”) by HKE to the extent permitted under applicable laws and regulations and on the terms and conditions set out in this Agreement. Nam Tai has also agreed to negotiate with HKE on an exclusive and confidential basis on the terms and conditions set out in this Agreement.

THE PARTIES AGREE THAT:

1.	EXCLUSIVITY
1.1	The parties acknowledge that the due diligence exercise of the Group is likely to involve considerable time on the part of the management of HKE, Nam Tai and their professional advisers, and accordingly Nam Tai has agreed to negotiate with HKE on an exclusive basis in relation to the Transaction for a period commencing on the date hereof and ending on 15 March 2008 or such later date as the parties may otherwise agree in writing (the “Exclusivity Period”).
1.2	During the Exclusivity Period, Nam Tai shall ensure that none of its directors, officers, employees, professional advisers or agents will, and shall procure that the Company will not:

1.2.1	directly or indirectly solicit, initiate or participate in discussions or negotiations with any third party, or entertain proposals from any third party, in relation to the Transaction or disposal of substantial assets by the Group; or
1.2.2	provide any information to any third party with a view to that third party acquiring shares in the Company from Nam Tai or acquiring substantial assets from the Group.

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1.3	In consideration of Nam Tai granting HKE negotiation exclusivity under this Agreement, HKE shall pay Nam Tai an amount of HK$1,000,000 in cash (the “Earnest Money”) upon the signing of this Agreement.
1.4	The obligations of Nam Tai in this Clause 1 will terminate upon the earlier of:

1.4.1	Nam Tai and HKE (or a person it may nominate) failing to enter into a definitive agreement relating to the Transaction before the expiry of the Exclusivity Period; and
1.4.2	HKE having notified to Nam Tai in writing that it no longer wishes to continue with the negotiations relating to the Transaction.

1.5 In relation to the Earnest Money:

1.5.1

where Nam Tai and HKE (or a person it may nominate) fail to enter into a definitive agreement relating to the Transaction before the expiry of the Exclusivity Period, Nam Tai shall forthwith return 50 per cent. of the Earnest Money (being HK$500,000) to HKE in cash without any interest, cost or compensation, and Nam Tai shall be entitled to forfeit absolutely the remaining balance of the Earnest Money (being HK$500,000) paid to Nam Tai under this Agreement;

1.5.2

where Nam Tai and HKE (or a person it may nominate) have entered into a definitive agreement relating to the Transaction before the expiry of the Exclusivity Period, the Earnest Money shall be applied as part of the payment to be made by HKE to Nam Tai with respect to the Transaction upon completion; but where the Transaction is not completed in the absence of any default of Nam Tai, Nam Tai shall forthwith return 50 per cent. of the Earnest Money (being HK$500,000) to HKE in cash without any interest, cost or compensation, and Nam Tai shall be entitled to forfeit absolutely the remaining balance of the Earnest Money (being HK$500,000) paid to Nam Tai under this Agreement; and where the Transaction is not completed due to a default of Nam Tai, Nam Tai shall forthwith return the whole of the Earnest Money (being HK$1,000,000) to HKE in cash without any interest, cost or compensation under this Agreement.

2.	OBLIGATIONS
2.1	During the Exclusivity Period, the parties shall conduct negotiation in good faith with a view to entering into a definitive agreement relating to the Transaction.
2.2	Subject to the requirements of applicable laws and regulations and having regard, in particular, to those relating to equality information to the shareholders of the Company, and subject to Clause 3 of this Agreement, Nam Tai would assist HKE in its due diligence on the Group. In particular, Nam Tai agrees that immediately after the execution of this Agreement, it shall provide HKE reasonable access to (a) the books, records, properties and assets of the Group, (b) all staff of Nam Tai who can provide information relating to the Group, and (c) Nam Tai’s records and evidence in relation to its stake in the Group, in order to enable HKE to conduct a due diligence investigation of the Group’s business operations and assets.

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3.

CONFIDENTIALITY

3.1

The parties agree that (a) the content and existence of this Agreement, and (b) in respect of a party receiving information (the “Receiving Party”), all information disclosed by the other party (the “Disclosing Party”) or any of its officers, employees, professional advisers or agents to the Receiving Party or its officers, employees, professional advisers or agents relating to the Transaction (in particular in respect of HKE, all information relating to the Group) and the Disclosing Party (the “Confidential Information”), shall be treated as strictly confidential and shall not be disclosed by them to any third party (including employees of the Group who are not also senior employees of Nam Tai involving in the discussion of the Transaction) except:

3.1.1	required by law or any order of any court of competent jurisdiction or any rule or regulation of any recognised stock exchange; or
3.1.2	disclosed to their respective senior employees, legal and financial advisers for the sole purpose of evaluating or advising on the Transaction (the “Permitted Purpose”).

3.2 The parties undertakes with each other that it will:

3.2.1	keep in safe custody all documentation and other papers and all discs, tapes and other media recording or storing any of the Confidential Information, so as to avoid all unauthorised access;
3.2.2	not, without the prior written consent of the other party, make any use of the Confidential Information except for the Permitted Purpose, and, in particular, but without limitation, not use the Confidential Information to procure any commercial advantage over the Group or the other party;
3.2.3	not disclose or reveal the Confidential Information to any person or to reproduce or make copies of it in any form (including electronically readable or hardcopy form) unless this Agreement allows a party to, and where a party becomes aware or suspect that any Confidential Information has been disclosed to an unauthorised person, to inform the other party immediately to that effect;
3.2.4	ensure that anyone to whom a party disclose the Confidential Information to is made fully aware that the Confidential Information is confidential; and
3.2.5	procure that the persons to which the Confidential Information is disclosed will comply with the obligations contained in this Clause as if they were a party to this Agreement (other than in relation to the disclosures under Clauses 3.1.1 or 3.1.2).

4. GOVERNING LAW AND JURISDICTION

4.1 This Agreement shall be governed by and construed in accordance with the laws of the

3

Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”).

4.2 The parties hereby irrevocably submit to the non-exclusive jurisdiction of the Hong Kong courts for the purpose of enforcing any claim arising under this Agreement.

IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

SIGNED by Michael Ng	)
for and on behalf of	)
HONG KONG ENERGY	)
(HOLDINGS) LIMITED	)

4

in the presence of:	)
	/s/ Michael Ng
[Witness signature illegible] SIGNED by John Farina	)
for and on behalf of	)
NAM TAI ELECTRONICS, INC.	)
in the presence of:	)
	/s/ John Q. Farina
[Witness signature illegible]

5

EX-4.54

Exhibit 4.54

Dated the 26^th day of February 2008

NAM TAI ELECTRONICS, INC.
as the Vendor

and

HKC (HOLDINGS) LIMITED
as the Purchaser

AGREEMENT FOR THE
SALE AND PURCHASE OF SHARES
IN
J.I.C. TECHNOLOGY COMPANY LIMITED

Baker & McKenzie
14th Floor Hutchison House
10 Harcourt Road
Hong Kong

Telephone: (852) 2846-1888
Fax: (852) 2845-0476
Ref: LKL/RCC

CONTENTS

Clause	Heading	Page
1.	Definitions and Interpretation		1
2.	Sale and Purchase of the Sale Shares		7
3.	Purchase Price		7
4.	Conditions		7
5.	General Offer		8
6.	Completion		8
7.	Further Undertakings		12
8.	Warranties		15
9.	Restriction on Announcements and Disclosure		18
10.	Access to Information		19
11.	Restriction of Vendor		19
12.	Miscellaneous		20
13.	Governing Law and Jurisdiction		21
SCHEDULE 1 — PART A: Particulars of the Company			22
SCHEDULE 1 — PART B: Particulars of the Subsidiaries			23
SCHEDULE 2: Warranties			29
SCHEDULE 3: Deed of Indemnity			44
SCHEDULE 4: Letter of Resignation under Seal			53
SCHEDULE 5: Agreements and arrangements relating to the employees or the affairs of the Group as referred to in paragraph 17 of Schedule 2			54

i

THIS AGREEMENT is made on the 26^th day of February 2008

BETWEEN:

(1)	NAM TAI ELECTRONICS, INC., a company incorporated in the British Virgin Islands, whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Vendor”); and
(2)	HKC (HOLDINGS) LIMITED, a company incorporated in Bermuda, whose registered office is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda (the “Purchaser”).

WHEREAS:

(A)	The Company is a company incorporated in the Cayman Islands with limited liability and registered as an oversea company under Part XI of the Companies Ordinance. The Company’s shares are listed on the Stock Exchange.
(B)	The Vendor as beneficial owner has agreed to sell, and the Purchaser has agreed to purchase, the Sale Shares beneficially owned as at the date hereof by the Vendor, representing approximately 74.99% of the total issued share capital of the Company upon the terms and conditions hereinafter set out.

THE PARTIES AGREE THAT:

1.	Definitions and Interpretation
1.1	In this Agreement, where the context so admits the following words and expressions shall have the following meanings:

“Accounting Date”	31 December 2007;
“Accounts”	the audited financial statements of the Company and of each of the Subsidiaries for the accounting period which ended on the Accounting Date (each such financial statement comprising a balance sheet as at the Accounting Date, profit and loss account, notes and directors’ and auditors’ report) and the consolidated profit and loss account and consolidated balance sheet of the Company as at and for the period ending on the Accounting Date;
“Agreement”	this agreement as amended or varied from time to time in accordance with the terms hereof;
“associate”	the same meaning as defined in the Listing Rules;

1

“business day”	a day (other than Saturday) on which banks in Hong Kong are open for business;
“CCASS”	the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited;
“Companies Ordinance”	the Companies Ordinance (Chapter 32 of the Laws of Hong Kong);
“Company”	J.I.C. Technology Company Limited, particulars of which being set out in Part A of Schedule 1;
“company”	any company or body corporate wherever incorporated;
“Completion”	completion of the sale and purchase of the Sale Shares as specified in Clause 6;
“Completion Date”	the earliest of the following:-
	(a) subject to (b) and (c) below, the next business day after the day on which the joint announcement of the Purchaser and the Company in relation to this Agreement and the General Offer has been approved by the SFC and the Stock Exchange (which shall be no later than the Latest Announcement Date);
	(b) where the performance of this Agreement and the transactions contemplated herein by the Purchaser requires approval from the Purchaser’s shareholders and there is no indication from the Stock Exchange that the waiver from convening the related Purchaser’s general meeting under Chapter 14 of the Listing Rules cannot be granted, the business day upon which the relevant written shareholders’ approval for the Purchaser permitted under the Listing Rules being obtained (which shall be no later than the Latest Announcement Date); and
	(c) if and only if the performance of this Agreement and the transactions contemplated herein by the Purchaser requires to be approved by Purchaser’s

2

	shareholders in a general meeting as required by the Stock Exchange (which cannot be waived), the next business day after approval of the Purchaser’s shareholders at the Purchaser’s general meeting for such purpose (which shall be no later than the Latest Approval Date),
	in each case subject to any other date as the Parties may agree in writing;
“Deed of Indemnity”	the deed in the form set out in Schedule 3;
“Disclosure Letter”	the letter from the Vendor to the Purchaser dated the date of this Agreement in the approved terms;
“Earnest Money”	an amount of HK$1,000,000 paid by HKE to the Vendor pursuant to the Exclusivity Agreement;
“Exclusivity Agreement”	an exclusivity agreement made between the Vendor and HKE dated 6 February 2008;
“General Offer”	the cash offer to be made by or on behalf of the Purchaser in accordance with the Takeovers Code for the Offer Shares following and subject to Completion;
“Group”	the group of companies consisting of the Company and the Subsidiaries and the expression “member of the Group” shall be construed accordingly;
“HK$”	Hong Kong dollars;
“HKE”	Hong Kong Energy (Holdings) Limited, a wholly-owned subsidiary of the Purchaser;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic of China;
“Intellectual Property Rights”	includes patents, knowhow, trade secrets and other confidential information, registered or unregistered designs, copyrights, performer’s rights, Internet domain names of any level, plant variety rights, design rights, rights in circuit layouts, topography rights, trade marks, service marks, business names, registrations of, applications to register and rights to apply for registration of any of the aforesaid items, rights

3

	in the nature of any of the aforesaid items in any country, rights in the nature of unfair competition rights, rights to sue for passing off, moral rights and other registerable or unregisterable intellectual property rights;
“Latest Announcement Date”	11 March 2008, being the fourteen (14th) day immediately after the signing date of this Agreement;
“Latest Approval Date”	26 May 2008;
“Leased Properties”	all the land, buildings and premises currently leased by the Group;
“Listing Rules”	at any given time, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in force at that time;
“Offer Shares”	the existing issued Shares but excluding the Sale Shares and any other Shares owned by the Purchaser and persons acting in concert (within the meaning of the Takeovers Code) with it on the Completion Date and/or acquired or agreed to be acquired by the Purchaser and persons acting in concert with it while the General Offer remains open for acceptance;
“Parties”	the named Parties to this Agreement and “Party” means any one of them;
“Purchase Price”	the purchase price payable by the Purchaser for the Sale Shares as specified in Clause 3.1;
“Sale Shares”	the 572,594,978 ordinary shares of HK$0.01 each in the capital of the Company to be bought and sold pursuant to Clause 2, being all the issued shares in the capital of the Company beneficially owned by the Vendor;
“SFC”	the Executive Director for the time being of the Corporate Finance Division of the Securities and Futures Commission and any delegate for the time being of the Executive Director;
“Share Option Scheme”	the share option scheme adopted by the Company on 31 May 2002;

4

“Shares”	the ordinary shares of HK$0.01 each in the capital of the Company, and “Share” means any of them;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Subsidiaries”	the subsidiaries of the Company listed in Part B of Schedule 1;
“Takeovers Code”	at any relevant time, the Hong Kong Code on Takeovers and Mergers in force at that time;
“Tax”	all forms of taxation, stamp duties, estate duties, deductions, withholdings, duties, imposts, levies, fees, charges, social security contributions and rates imposed, levied, collected, withheld or assessed by any local, municipal, regional, urban, governmental, state, federal or other body in Hong Kong or elsewhere and any interest, additional taxation, penalty, surcharge or fine in connection therewith;
“Total Cash”	cash at bank or in hand of the Group free from any encumbrance of whatsoever nature;
“Warranted Cash Level”	HK$335 million if and only if Completion is conducted on or before the Latest Announcement Date, provided that if any of the existing bank loan of the Group as disclosed in the Disclosure Letter must be repaid at the request of the relevant bank before Completion, the “Warranted Cash Level” shall be reduced by the amount of such repayment; and
“Warranties”	the warranties, representations, indemnities and undertakings given or made by the Vendor and contained in this Agreement (including those warranties and representations set out in Schedule 2).

1.2 Any references, express or implied, to statutes or statutory provisions shall be construed as references to those statutes or provisions as respectively amended or re-enacted or as their application is modified by other provisions (whether before or after the date hereof) from time to time and shall include any statutes or provisions of which they are re-enactments (whether with or without modification) and any orders, regulations, instruments or other subordinate legislation under the relevant statute or statutory provision. References to sections of consolidating legislation shall, wherever necessary or appropriate in the context, be construed as including

5

	references to the sections of the previous legislation from which the consolidating legislation has been prepared.
1.3	References herein to Clauses and Schedules are to clauses in and schedules to this Agreement (unless the context requires otherwise). The Recitals and the Schedules to this Agreement shall be deemed to form part of this Agreement.
1.4	The expressions the “Vendor” and the “Purchaser”, shall, where the context permits, include their respective permitted assigns.
1.5	The headings are inserted for convenience only and shall not affect the construction of this Agreement.
1.6	Unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing a gender include every gender.
1.7	References to “persons” shall include bodies corporate, unincorporated associations and partnerships (whether or not having separate legal personality).
1.8	References to writing shall include any methods of producing or reproducing words in a legible and non-transitory form.
1.9	A document expressed to be “in the approved terms” means a document the terms of which have been approved by or on behalf of the Vendor and the Purchaser and a copy of which has been signed for the purposes of identification by or on behalf of the Vendor and the Purchaser.
1.10	Unless the context requires otherwise, words and expressions defined in the Companies Ordinance shall bear the same respective meanings when used in this Agreement.
1.11	In construing this Agreement:

1.11.1	the rule known as the ejusdem generis rule shall not apply and, accordingly, general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and
1.11.2	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

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2.	Sale and Purchase of the Sale Shares
2.1	Subject to the terms of this Agreement, the Vendor shall sell as beneficial owner and the Purchaser shall purchase, the Sale Shares free from all liens, charges and encumbrances and together with all rights now or hereafter attaching to them, including all rights to any dividend or other distribution declared, made or paid on or after the date of this Agreement.
2.2	The Purchaser shall not be obliged to complete the purchase of any of the Sale Shares unless the purchase of all of the Sale Shares is completed simultaneously.
3.	Purchase Price
3.1	The total consideration payable for the Sale Shares shall be HK$397,461,067 (equivalent to approximately HK$0.69414 per Sale Share).
3.2	The Parties acknowledge that pursuant to the Exclusivity Agreement, the Vendor has received the Earnest Money from HKE. The Parties hereby agree that the Earnest Money is to be applied as part payment of the Purchase Price at Completion, and the remaining balance of the Purchase Price in the sum of HK$396,461,067 will be paid at Completion in accordance with Clause 6.3.1.
3.3	Where Completion does not occur on or before the Latest Announcement Date or such later date as the Parties may otherwise agree in writing, the Purchaser shall pay to the Vendor in cash within two business days after the Latest Announcement Date a deposit of HK$99,365,267 as part of the Purchase Price.
4.	Conditions
4.1	The sale and purchase of the Sale Shares is conditional upon:

4.1.1	the Warranties being true and accurate and not misleading in all material respects at the date of this Agreement and having remained true and accurate and not misleading in all material respects on the Completion Date;
4.1.2	the Vendor not having breached any of its obligations specified in Clause 7; and
4.1.3	the current listing of the Shares not having been withdrawn, the Shares continuing to be traded on the Stock Exchange prior to the Completion Date (save for any temporary suspension pending any announcement in connection with this Agreement and transactions contemplated hereunder) and the Stock Exchange and SFC not having objected, and not having indicated that they will object, to such listing.

4.2 The Purchaser may waive all or any of the conditions set out in Clause 4.1 at any time by notice in writing to the Vendor.

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4.3	In the event that any of the conditions referred to in Clause 4.1 shall not have been fulfilled (or waived pursuant to Clause 4.2) prior to 26 May 2008, then the Purchaser shall not be bound to proceed with the purchase of the Sale Shares and this Agreement shall cease to be of any effect except Clauses 9, 12 and 13 which shall remain in force and save in respect of claims arising out of any antecedent breach of this Agreement. Where the Purchaser has paid the deposit to the Vendor in accordance with Clause 3.3, the Vendor shall forthwith return the whole of such deposit to the Purchaser in cash without any interest.
5.	General Offer
	The Parties hereby undertake that they will each use all reasonable endeavours to supply such information as may be reasonably necessary to be included in the documents to be despatched or the announcements to be issued pursuant to the Takeovers Code in connection with the General Offer.
6.	Completion
6.1	Subject to the provisions of Clause 4, Completion shall take place on the Completion Date at the office of the Purchaser(at the request of the Purchaser) when all (but not some only) of the events described in the other provisions of this Clause 6 shall occur.
6.2	At Completion, the Vendor shall:

6.2.1

procure that its designated participant with CCASS gives an irrevocable delivery instruction to effect a book entry settlement of 61,604,688 Shares out of the Sale Shares in accordance with the rules and the operational procedures of CCASS to the credit of the stock account of the Purchaser’s designated participant with CCASS in accordance with the details provided by the Purchaser to the Vendor prior to Completion;

6.2.2

deliver or cause to be delivered to the Purchaser:

6.2.2.1	evidence of the giving of the delivery instruction referred to in Clause 6.2.1 above together with sold note(s) in respect of such amount of Sale Shares duly executed by or on behalf of the Vendor;
6.2.2.2	duly executed transfers and sold notes in respect of 510,990,290 Shares out of the Sale Shares in favour of the Purchaser or its nominee(s) together with the relative share certificates;
6.2.2.3	a cheque for HK$397,462 (being an estimate only of the Vendor’s share of stamp duty payable in respect of the transfer of the Sale Shares) drawn in favour of the Government of the Hong Kong Special Administrative Region;

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6.2.2.4	all powers of attorney or other authorities under which sold notes (if applicable) in respect of the Sale Shares have been executed;
6.2.2.5	the Deed of Indemnity duly executed by the Vendor;
6.2.2.6	all the statutory and other books and records (including financial records) duly written up to date of each member of the Group and their respective certificates of incorporation, current business registration certificates and common seals and any other papers, records and documents of each member of the Group to the extent within the possession of the Vendor;
6.2.2.7	a written confirmation that (a) the Vendor is not in material breach of any of the Warranties or any of its obligations in this Agreement and (b) all loans or other indebtedness due or owing to any member of the Group by the Vendor or the directors of all members of the Group (other than in the capacity as employees) or their respective associates have been repaid in full;
6.2.2.8	duly executed transfers and sold notes (if applicable) in favour of the Company (or its nominees) in respect of the one share in J.I.C. Enterprises (Hong Kong) Limited held by Chui Kam Wai on behalf of the Company; and
6.2.2.9	a certificate from a director of the Company confirming that as at the Completion Date:

(a)	if Completion is conducted on or before the Latest Announcement Date, the amount of Total Cash is not less than the relevant Warranted Cash Level; and
(b)	J.I.C. Enterprises (Hong Kong) Limited is inactive, has no assets or liabilities other than those disclosed in its balance sheet as at 31 December 2005, and has no material change in assets and liabilities since 31 December 2005.

6.2.3

cause such persons as the Purchaser may nominate to be validly appointed (by procuring the necessary board resolutions to be duly passed by the Completion Date) as directors of the Company, subject to their being acceptable to the Stock Exchange, with effect from the earliest time permitted under (or pursuant to any dispensation from) the Takeovers Code or by the SFC, and as directors of the other members of the Group with effect from the Completion Date;

6.2.4

cause (by procuring the necessary board resolutions to be duly passed by the Completion Date):

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6.2.4.1

any director, officer or employee of any member of the Group as the Parties may agree to resign from the relevant member of the Group with effect from the earliest time permitted under (or pursuant to any dispensation from) the Takeovers Code or by the SFC (or, where the Parties otherwise agree, cause such director, officer or employee to agree not later than the Completion Date to resign with effect from a later reasonable date as the Parties may agree);

6.2.4.2

such persons as the Purchaser may nominate to be validly appointed as the company secretary and the auditors of any member of the Group and upon such appointment forthwith cause the existing company secretary and the existing auditors of each such member of the Group to resign from their respective offices and as an employee in the case of the company secretary (if applicable) with effect from the Completion Date (or, where the Parties otherwise agree, cause such company secretary and auditors to agree not later than the Completion Date to resign with effect from a later reasonable date as the Parties may agree), provided that the resignation of the auditors shall only be effective after they have completed the annual audit of the Group for the year ended 31 December 2007,

and cause (a) any person so resigning as director or secretary to deliver to the Purchaser a letter under seal or otherwise executed as a deed addressed to the relevant member of the Group in the form set out in Schedule 4 and (b) any person so resigning as auditors to deliver to the Purchaser a letter of resignation addressed to the relevant member of the Group such resignation to contain a statement that there are no circumstances up to and including the Completion Date and connected with their resignation which they consider should be brought to the attention of the members or creditors of the relevant member of the Group; and

6.2.5

procure, with effect from the effective date of the changes referred to in Clause 6.2.3, the revocation of all authorities to the bankers of each member of the Group relating to bank accounts and procure the giving of authority to such persons as the Purchaser may nominate to operate the same.

6.3 At Completion, the Purchaser shall, subject to the Vendor having performed its obligations under Clause 6.2 in accordance with the terms thereof and the Purchaser receiving satisfactory evidence from its designated CCASS participant that the transfer of ownership of the 61,604,688 Shares out of the Sale Shares has been properly effected through CCASS:

6.3.1 deliver to the Vendor a bankers’ draft drawn on a prime bank in Hong Kong for the remaining balance of the Purchase Price (after deducting the amount of Earnest Money in accordance with Clause 3.2 and, where applicable, the amount of deposit referred to in Clause 3.3) in favour of the Vendor, being the Vendor’s nominee, whose receipt shall be an absolute discharge therefor; and

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6.3.2 deliver to the Vendor a counterpart Deed of Indemnity duly executed by the Purchaser.

6.4 The Vendor shall procure that:

6.4.1	all arrangements and agreements between any member of the Group on the one hand and the Vendor or any of its associates on the other hand (including, without prejudice to the generality of the foregoing, all agreements between any of such parties relating to the management of any member of the Group, but excluding those arrangements or agreements set out in Schedule 5); and
6.4.2	any agreement or arrangement relating to the affairs of any member of the Group between the Vendor or any of its associates on the one hand and any officer or employee of any member of the Group on the other hand,

	shall in each case be terminated on or before the Completion Date by mutual agreement between the respective parties thereto but without further liability on the part of the relevant member of the Group and on approved terms.
6.5	Without prejudice to any other remedies available to the Purchaser, if in any respect the provisions of Clause 6.2 or 6.4 are not complied with by the Vendor on the Completion Date, the Purchaser may:

6.5.1	defer Completion to a date not more than 21 days after the Completion Date (and so that the provisions of Clauses 6.1 to 6.4 shall apply to Completion as so deferred); or
6.5.2	proceed to Completion so far as practicable (without prejudice to the Purchaser’s rights hereunder); or
6.5.3	rescind its obligations under this Agreement and, where the Purchaser has paid the deposit to the Vendor in accordance with Clause 3.3, the Vendor shall forthwith return the whole of such deposit to the Purchaser in cash without any interest.

6.6 Notwithstanding anything to the contrary in this Agreement, in the event that Completion cannot take place in the absence of any default of the Vendor on or before the Latest Announcement Date (in the case where no approval from the Purchaser’s shareholders in a general meeting is required) or the Latest Approval Date (in the case where approval from the Purchaser’s shareholders in a general meeting is required), the Vendor may (without prejudice to other rights which the Vendor may have against the Purchaser):

6.6.1	defer Completion to a date as agreed with the Purchaser in writing; or
6.6.2	rescind its obligations under this Agreement.

6.7 Where this Agreement is terminated or rescinded pursuant to Clause 4.3 or Clause 6:

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6.7.1

(in the absence of any default of the Vendor) the Vendor shall forthwith return 50% of the Earnest Money (being HK$500,000) to HKE (through the Purchaser) in cash without any interest, cost or compensation, and the Vendor shall be entitled (without prejudice to other rights which the Vendor may have against the Purchaser) to forfeit absolutely the remaining balance of the Earnest Money (being HK$500,000) paid to the Vendor under the Exclusivity Agreement; and

6.7.1

(due to a default of the Vendor) the Vendor shall forthwith return the whole of the Earnest Money (being HK$1,000,000) to HKE (through the Purchaser) in cash without any interest, cost or compensation.

7.	Further Undertakings
7.1	The Vendor will procure that:

7.1.1	the business of each member of the Group is operated in a manner consistent with past practices during the period between the date hereof and the Completion Date and in the best interests of the Group;
7.1.2	on or before the Completion Date, all guarantees given by any member of the Group in favour of third parties in respect of the performance of the obligations of the Vendor or any of its associates are released or assumed by the Vendor or an associate; and
7.1.3	on or before the Completion Date, all loans or other indebtedness due or owing to any member of the Group by the Vendor or the directors of all members of the Group (other than in the capacity as employees) or their respective associates are repaid in full;

7.2 Pending Completion the Vendor shall not:

7.2.1	do, allow or procure any act or omission which would constitute a material breach of any of the Warranties; or
7.2.2	sell, assign or transfer or purport to sell, assign or transfer any of the Sale Shares or create or permit to be created any third party right or interest therein.

7.3 Pending Completion and save as contemplated by this Agreement or in the ordinary course of the business of the Group, the Vendor shall procure that each member of the Group will not, without the prior written consent of the Purchaser, engage in the following activities if and to the extent that any of such activities will have a material adverse effect on the general affairs of the Group as a whole:

7.3.1	do, allow or procure any act or omission which would constitute a breach of any of the Warranties;
7.3.2	create or permit to arise any lien, charge, encumbrance, pledge, mortgage or other third party right or interest on or in respect of any of its undertaking,

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property or assets;

7.3.3	pass any shareholders’ resolution other than a resolution for approving this Agreement or the transactions contemplated herein;
7.3.4	enter into, or amend any existing, arrangements, agreements and contracts (otherwise than in the ordinary course of business) including but not limited to agreements with any of the directors or officers or employees;
7.3.5	issue or agree to issue any shares, warrants or other securities or loan capital or grant or agree to grant any option over or right to acquire or convert into any share or loan capital;
7.3.6	take any action which would result in the Purchaser acquiring on Completion a percentage interest in the Company (on a fully diluted basis) lower than that contemplated in this Agreement or the Company reducing its interest in any Subsidiary;
7.3.7	declare, pay or make any dividends or other distributions;
7.3.8	appoint any director, company secretary or auditor (other than the appointments referred to in Clauses 6.2.3 and 6.2.4.1);
7.3.9	carry on any business which constitutes a material deviation from the business currently carried on by it;
7.3.10	incorporate any subsidiary or permit the disposal or dilution of its interest, directly or indirectly, in any subsidiary or acquire shares in any company or dispose of any shares in any company or acquire or dispose of any loans or loan capital;
7.3.11	consolidate or merge with or acquire any other business;
7.3.12	enter into any partnership or joint venture arrangement;
7.3.13	make any loan or advance or give any credit (other than trade credits in the ordinary course of business);
7.3.14	give any guarantee or indemnity for or otherwise secure the liabilities or obligations of any person save and except the Company and the Subsidiaries;
7.3.15	sell, transfer, lease, assign or otherwise dispose of any material part of its undertaking, property or assets (or any interest therein) or contract so to do;
7.3.16	make any capital expenditure in excess of HK$1,000,000;
7.3.17	hire or change the terms of employment of any employee or terminate the employment of any employee (other than as contemplated in Clauses 6.2.4 and 6.4);

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7.3.18	take any action in relation to pensions, retirement schemes or share option schemes (including but not limited to the grant of options under the Share Option Scheme);
7.3.19	take any action in relation to profit-sharing or bonus schemes or any other executive or employee benefits;
7.3.20	alter its financial year end;
7.3.21	amend the accounting policies or reporting practices previously adopted by it;
7.3.22	settle or compromise any major claims in relation to Tax;
7.3.23	commence, settle or take any action relating to any litigation, arbitration or other proceedings concerning the Group’s business or assets (other than the existing litigation disclosed in the Disclosure Letter); and/or
7.3.24	make, amend or terminate any long-term, unusual or onerous contract (long-term meaning a contract under which the obligations of any party thereto may remain outstanding for more than one year) or take any action which could, as a consequence of any action taken by another party, result in any of the same.

7.4	Where any member of the Group proposes to enter into any transaction, agreement or arrangement (or any series of transactions, agreements or arrangements) other than its monthly payroll which involves a transaction amount (or the amount of that member’s commitment or liability) that will exceed HK$1,000,000 in a single transaction, agreement or arrangement or HK$1,000,000 on an annual basis, the Vendor’s obligations in Clauses 7.1, 7.2 and/or 7.3 shall not be deemed to have been fulfilled unless the relevant member of the Group has obtained the Purchaser’s prior written approval to such proposal.
7.5	The Vendor shall assist, and shall procure that the Company and its directors, officers and employees assist, the Purchaser in all negotiations and exchanges of correspondence with the SFC and the Stock Exchange in connection with all requests by such regulatory authorities.
7.6	The Vendor undertakes to indemnify and keep indemnified the Purchaser (for itself and as trustee for each member of the Group) against any claims which may be brought by the directors and any other persons who resign or are intended to resign pursuant to Clause 6.2.4 or Clause 6.4.3.
7.7	The Purchaser undertakes that it shall use its best endeavours to:

7.7.1	prepare and clear the joint announcement of the Purchaser and the Company in relation to this Agreement and the General Offer by the Latest Announcement Date (or such other date as the Parties may otherwise agree in writing) , and allow the Vendor to make reasonable comments;
7.7.2	(where the Purchaser’s shareholders’ approval on the Agreement and the transactions contemplated hereunder is required) provide all information and

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respond to the Stock Exchange in a timely manner with a view to obtaining a waiver from convening the Purchaser’s general meeting under Chapter 14 of the Listing Rules;

7.7.3

(where the waiver referred to in Clause 7.7.2 is granted) obtain written shareholders’ approval of the Purchaser on this Agreement and the transactions contemplated herein on or before the Latest Announcement Date; and

7.7.4

(where the Purchaser is required to convene a general meeting) obtain irrevocable voting instructions of more than 50% of the Purchaser’s shareholders approving this Agreement and the transactions contemplated herein no later than the business day immediately after the joint announcement referred to in Clause 7.7.1 has been published, and seek the Purchaser’s shareholders approval in general meeting for such purpose on or before the Latest Approval Date.

7.8	The Vendor undertakes to provide to the Purchaser within three business days from the date hereof a copy of the duly signed termination agreement in relation of the Consultancy Agreement dated 18 June 2007 and entered into between the Company and Keizo Kitahara.
8.	Warranties
8.1	The Vendor hereby represents, warrants and undertakes to the Purchaser (to the intent that the provisions of this Clause shall continue to have full force and effect notwithstanding Completion) that each of the statements set out in Schedule 2 is now and will at Completion be true and accurate and acknowledge that the Purchaser in entering into this Agreement is relying on such Warranties and has been induced by them to enter into this Agreement.
8.2	The Warranties are given subject to the matters fairly disclosed in the Disclosure Letter but no other information relating to any member of the Group of which the Purchaser has knowledge (actual or constructive) and no investigation by or on behalf of the Purchaser shall prejudice any claim made by the Purchaser under such Warranties or under the indemnity contained in Clause 8.5 or operate to reduce any amount recoverable and it shall not be a defence to any claim against the Vendor that the Purchaser knew or ought to have known or had constructive knowledge of any information (other than as disclosed in the Disclosure Letter) relating to the circumstances giving rise to such claim.
8.3	The Warranties set out in each paragraph of Schedule 2 shall be separate and independent and save as expressly provided shall not be limited by reference to or inference from any other paragraph or anything in this Agreement or the Schedules nor anything in the Disclosure Letter which is not expressly referenced to the Warranty concerned.
8.4	The Warranties set out in each paragraph of Schedule 2 shall be deemed to be given on the date of this Agreement and on the Completion Date as if all references therein

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to the date of this Agreement were (save where the context precludes) references to the Completion Date.

8.5	The Vendor hereby undertakes to indemnify and keep indemnified the Purchaser (for itself and as trustee for each member of the Group) against any costs, expenses and liability properly and reasonably incurred by the Purchaser in connection with any breach of any Warranties by the Vendor; and the indemnity contained in this Clause shall be without prejudice to any other rights and remedies of the Purchaser in relation to any such breach of Warranties and all such other rights and remedies are hereby expressly reserved to the Purchaser.
8.6	Where any statement in the Warranties is qualified as being subject to the knowledge of the Vendor, that statement shall be deemed to include an additional statement that it has been made after due and careful enquiry by the Vendor so as to ensure that it is true and accurate and is not misleading, whether by reason of an omission or otherwise.
8.7	The Vendor hereby agrees with the Purchaser (for itself and as trustee for the Company and each of the Subsidiaries) to waive any rights which it may have in respect of any misrepresentation or inaccuracy in, or omission from, any information or advice supplied or given by the Company or its Subsidiaries or its or their officers, employees or advisers in connection with the giving of the Warranties and the preparation of the Disclosure Letter.
8.8	If any sum payable by the Vendor under this Agreement shall be subject to Tax (whether by way of deduction or withholding or direct assessment of the person entitled thereto) such payment shall be increased by such an amount as shall ensure that after deduction, withholding or payment of such Tax the recipient shall have received a net amount equal to the payment otherwise required hereby to be made.
8.9	Any liability of the Vendor in respect of a breach of the Warranties or a breach of any obligation under this Agreement or the Deed of Indemnity shall survive Completion.
8.10	The Vendor will not be liable under any of the Warranties unless notice of a claim under the Warranties specifying in reasonable detail and to the extent possible the event or default to which the claim relates and the nature of the breach and amount claimed has been received by the Vendor not later than the expiry of the period of three years following Completion.
8.11	Any claim in respect of which notice has been given in accordance with Clause 8.10 will be deemed to have been irrevocably withdrawn and lapsed if (not having been previously satisfied, settled or withdrawn) proceedings in respect of such claim have not been issued and served on the Vendor not later than the expiry of the period of six months after the date of such notice.
8.12	The Vendor will only be liable in respect of any one claim under the Warranties (except the Warranty set out in paragraph 17 of Schedule 2 to which the thresholds in Clauses 8.12.1 and 8.12.2 shall not apply) if:

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8.12.1	the amount finally adjudicated or agreed as being payable in respect of one claim is in excess of HK$1,000,000 (provided however that claims arising out of the same subject matter will for the purposes of this Clause be construed as one claim); and
8.12.2	the aggregate amount finally adjudicated or agreed as being payable in respect of all such claim or claims is in excess of HK$5,000,000 in which event, the Vendor will be liable for the whole amount and not merely for the excess.

8.13	The total liability of the Vendor for claims made under the Warranties will not exceed HK$271.4 million.
8.14	The Vendor will not be liable under the Warranties to the extent that any depletion, diminution or reduction in the value or amount of any of the assets of the Company or any member of the Group occurs as a result of or is otherwise attributable to any legislation not in force at the date of this Agreement or any change of law or administrative practice which takes effect retroactively or occurs as a result of any increase in the rates of Tax in force at the date of this Agreement.
8.15	The Vendor will not be liable for a breach of any of the Warranties to the extent that the loss suffered by the Purchaser or any member of the Group also gives rise to an equivalent claim under the Deed of Indemnity and the Vendor has satisfied such equivalent claim. The Vendor will not be liable for a claim under the Deed of Indemnity to the extent that an equivalent claim has been made under the Warranties and the Vendor has satisfied such equivalent claim.
8.16	Upon its becoming aware of any matter which is a breach of or inconsistent with any of the Warranties or may give rise to a claim under any of the Warranties:

8.16.1

the Purchaser shall as soon as reasonably practicable give notice to the Vendor of the matter; and

8.16.2

in relation to a claim by a third party (the “Third Party Claim”) against any member of the Group and/or the Purchaser which may give rise to a claim under any of the Warranties, the Vendor shall at its own costs take such action, give assistance and institute such proceedings as may be reasonably requested by the Purchaser to (a) avoid, dispute, resist, mitigate, settle, compromise, defend, remedy or appeal the Third Party Claim and (b) enforce against any person the rights of the Purchaser or the Company in relation to the Third Party Claim.

8.17

Where the Purchaser or any member of the Group is at any time entitled to recover from some person other than the Vendor any sum in respect of any matter giving rise to a claim under the Warranties, the Purchaser shall promptly take all reasonable steps available to it to enforce such recovery. In the event that the Purchaser or the Group shall recover any amount from such other person, the amount of the Purchaser’s claim against the Vendor shall be reduced by the amount recovered.

8.18

If the Purchaser receives from the Vendor an amount in respect of any claim under the Warranties and the Purchaser or the Group subsequently becomes entitled to recover

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from some other person (whether under any provision of applicable law, insurance policy or otherwise howsoever) any sum which is directly referable to such claim, then:

8.18.1

the Purchaser shall as soon as practicable take all reasonable steps available to it to enforce such recovery; and

8.18.2

the Purchaser shall as soon as practicable pay to the Vendor any sum it receives from such other person to the extent that the aggregate of the sum received from the Vendor and the sum received from such other person exceeds the aggregate of (i) the amount of the loss suffered by the Purchaser or the Group with respect to such claim; and (ii) any cost and expenses incurred by the Purchaser or the Group in obtaining recovery from such other person.

8.19	The Purchaser shall procure that all reasonable steps are taken and all reasonable assistance is given to avoid or mitigate any losses which, in the absence of mitigation, might give rise to a liability in respect of any claim for breach of any Warranty by the Vendor under this Agreement.
8.20	Any limitation to the Vendor’s liabilities in this Clause 8 shall not apply to any breach of Warranties or any liabilities of the Vendor which is arisen from or is attributable to any fraud, wilful concealment or dishonesty on the part of the Vendor.
9.	Restriction on Announcements and Disclosure
9.1	None of the Parties hereto shall, without the prior written consent of the other Party, disclose the terms of, or any matters referred to in, this Agreement except to its professional advisers and senior management whose province is to know such terms or matters and to those persons to whom it may be necessary to disclose such terms or matters for the purpose of or in connection with this Agreement or the General Offer and subject as required by law or by the SFC and/or the Stock Exchange or by virtue of the Takeovers Code, the Listing Rules or of any other regulatory requirements.
9.2	Subject as provided in Clause 9.3, none of the Parties shall make any public announcement in relation to the transactions the terms of which are set out in this Agreement or the transactions or arrangements hereby contemplated or herein referred to or any matter ancillary hereto or thereto without the prior written consent of the other Party (which consents shall not be unreasonably withheld or delayed).
9.3	This Clause 9 shall not apply to any announcement required to be made pursuant to the Takeovers Code or the Listing Rules as to the contents of which the Party making the same shall have consulted and agreed with the other Party and obtained approval from the SFC and/or the Stock Exchange as may be required.
9.4	Each of the Parties hereto undertakes that prior to Completion and thereafter it will not (save as required by law, any regulatory requirement, the Stock Exchange or the SFC) make any announcement in connection with this Agreement or the transactions or arrangements contemplated hereunder or referred to herein unless the other Party

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hereto shall have given its consent to such announcement (which consent may not be unreasonably withheld or delayed and may be given either generally or in a specific case or cases and may be subject to conditions).

10.	Access to Information
10.1	As from the date of this Agreement, the Vendor shall give and shall procure that the Purchaser and any persons authorised by it will be given all such information relating to each member of the Group and such access to the premises and all books, title deeds, records, accounts and other documentation of each member of the Group as the Purchaser may request and be permitted to take copies of any such books, deeds, records, accounts and other documentation and that the officers and employees of each member of the Group shall be instructed to give promptly all such information and explanations to any such persons as aforesaid as may be requested by it or them.
10.2	The Purchaser hereby undertakes that it will not prior to Completion, save as required by law, the SFC or the Stock Exchange, divulge any confidential information relating to the Group obtained by it or its representatives pursuant to this Clause 10 to any person other than its own officers, employees or professional advisers.
11.	Restriction of Vendor
11.1	The Vendor undertakes with the Purchaser (for itself and as trustee for the Company and each of the Subsidiaries) that, except with the consent in writing of the Purchaser, if, in connection with the business or affairs of any member of the Group, it shall have obtained trade secrets or other confidential information belonging to any third party under an agreement purporting to bind any member of the Group which contained restrictions on disclosure, it will not without the previous written consent of the board of directors of the Purchaser at any time infringe or take any action which would or might result in an infringement of such restrictions;
11.2	The Vendor will procure that its subsidiaries will observe the restrictions contained in the foregoing provisions of this Clause 11.
11.3	While the restrictions contained in this Clause 11 are considered by the Parties to be reasonable in all the circumstances, it is recognised that restrictions of the nature in question may fail for technical reasons and accordingly it is hereby agreed and declared that if any of such restrictions shall be adjudged to be void as going beyond what is reasonable in all the circumstances for the protection of the interests of the Purchaser but would be valid if part of the wording thereof were deleted or the periods thereof reduced or the range of activities or area dealt with thereby reduced in scope the said restriction shall apply with such modifications as may be necessary to make it valid and effective.

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12.	Miscellaneous
12.1	Each Party shall pay its own costs and disbursements of and incidental to this Agreement and the sale and purchase hereby agreed to be made. All stamp duty payable on the instruments of transfer and bought and sold notes in respect of the sale and purchase of the Sale Shares shall be borne in equal share by the Vendor and the Purchaser.
12.2	Each notice, demand or other communication given or made under this Agreement shall be in writing and delivered or sent to the relevant Party at its address or facsimile number set out below (or such other address or facsimile number as the addressee has by five (5) days’ prior written notice specified to the other Party):

To the Vendor:	Address: c/o Suites 1506-1508, 15/F., One Exchange Square, 8 Connaught Place, Central, Hong Kong
	Facsimile No.: 852-22631223
	Attention: Mr. John Qunito Farina
To the Purchaser:	Address: 9th Floor, Tower 1, South Seas Centre, 75 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong
	Facsimile No.: 852-27310069
	Attention: Mr. Kirk Tsang

	Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered: (a) if given or made by personal delivery or prepaid registered post, when actually delivered to the relevant address; and (b) if given or made by facsimile, when despatched subject to machine-printed confirmation of receipt being received by the sender.
12.3	No failure or delay by a Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by a Party of any breach by the other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.
12.4	This Agreement shall not be assignable unless otherwise agreed by the other Party.
12.5	This Agreement (together with any documents referred to herein) constitutes the whole agreement between the Parties hereto and it is expressly declared that no variations hereof shall be effective unless made in writing.
12.6	The provisions of this Agreement including the Warranties herein contained, insofar as the same shall not have been fully performed at Completion, shall remain in full force and effect notwithstanding Completion.

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12.7	Any right of rescission conferred upon the Purchaser hereby shall be in addition to and without prejudice to all other rights and remedies available to it.
12.8	The Vendor and the Purchaser shall do and execute or procure to be done and executed all such further acts, deeds, things and documents as may be necessary to give effect to the terms of this Agreement and to place control of the Company and each member of the Group in the hands of the Purchaser.
12.9	This Agreement may be executed in one or more counterparts, and by the Parties on separate counterparts, but shall not be effective until every party has executed at least one counterpart and each such counterpart shall be an original of this Agreement but all the counterparts shall together constitute one and the same instrument.
13.	Governing Law and Jurisdiction
13.1	This Agreement shall be governed by and construed in accordance with the laws of Hong Kong and the Parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of the Hong Kong courts for the purpose of enforcing any claim arising hereunder.
13.2	The Vendor hereby irrevocably appoints Wilkinson & Grist of 6th Floor, Prince’s Building, 10 Charter Road, Central, Hong Kong as its agent to receive and acknowledge on its behalf service of any writ, summons, order, judgment or other notice of legal process in Hong Kong. If for any reason the agent named above (or its successor) no longer serves as agent of the Vendor for this purpose, the Vendor shall promptly appoint a successor agent satisfactory to the Purchaser, notify the Purchaser thereof and deliver to the Purchaser a copy of the new process agent’s acceptance of appointment Provided that until the Purchaser receives such notification, it shall be entitled to treat the agent named above (or its said successor) as the agent of the Vendor for the purposes of this Clause 13.2. The Vendor agrees that any such legal process shall be sufficiently served on it if delivered to such agent for service at its address for the time being in Hong Kong whether or not such agent gives notice thereof to the Vendor.

IN WITNESS WHEREOF this Agreement has been executed by the abovenamed Parties on the day and year first above written.

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SCHEDULE 1 — PART A

Particulars of the Company

The Company

Date and place of incorporation: 8 January 2002; The Cayman Islands

Address of registered office: Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands

Authorised share capital: HK$26,000,000 being comprised of 2,600,000,000 shares of HK$0.01 each

Issued share capital: HK$7,635,347.55 being comprised of 763,534,755 Shares of HK$0.01 each

Directors:
Executive Director:
Liu Xue Qing

Non-Executive Director:
Koo Ming Kown

Independent Non-Executive Directors
Cham Yau Nam
Leung Wai Hung
Choi Man Chau Michael

Secretary: Chan Bo Shan

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

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SCHEDULE 1 — PART B

Particulars of the Subsidiaries

Name of Subsidiary: J.I.C. (Macao Commercial Offshore) Company Limited

Date and place of incorporation: 12 November 2004; Macau

Address of registered office: Unit D, 17^th Floor, Edificio Comercial Rodrigues, 599 da Avenida da Praia Grande, Macau

Authorised share capital: MOP 100,000

Issued share capital: One quota each MOP 100,000

Registered shareholders and beneficial owners and shareholding: J.I.C. Technology Company Limited

Directors: Koo Ming Kown and Chui Kam Wai

Secretary: Nil

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

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Name of Subsidiary: Best Whole Holdings Limited

Date and place of incorporation: 13 November 2007; Hong Kong

Address of registered office: Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong

Authorised share capital: HK$10,000 divided into 10,000 shares of HK$1 each

Issued share capital: 1 ordinary share of HK$1

Registered shareholders and beneficial owners and shareholding: Joy Holdings Limited — 1 share

Directors: Koo Ming Kown, Wong Kuen Ling Karene and John Quinto Farina

Secretary: Wong Long Kee

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

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Name of Subsidiary: Joy Holdings Limited

Date and place of incorporation: 2 November 2007; British Virgin Islands

Address of registered office: P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands

Authorised share capital: US$50,000 divided into 50,000 shares of a single class each with a par value of US$1

Issued share capital: 1 ordinary share of US$1

Registered shareholders and beneficial owners and shareholding: J.I.C. Technology Company Limited — 1 share

Directors: Koo Ming Kown, Wong Kuen Ling Karene and John Quinto Farina

Secretary: Nil

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

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Name of Subsidiary: J.I.C. Enterprises (Hong Kong) Limited

Date and place of incorporation: February 18, 1983; Hong Kong

Address of registered office: Suite 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong

Authorised share capital: HK$500,000 divided into 500,000 ordinary shares of HK$1.00 each

Issued share capital: 500,000 ordinary shares of HK$1.00 each

Registered shareholders and beneficial owners and shareholding:

J.I.C. Technology Company Limited — holds 499,999 shares
Chui Kam Wai — holds 1 share on behalf of J.I.C. Technology Company Limited

Directors: Nomitor Limited

Willserve Limited

Secretary: Wilgrist Nominees Limited

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

Status: inactive, has no assets or liabilities other than those disclosed in its balance sheet as at 31 December 2005, and has no material change in assets and liabilities since 31 December 2005

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Name of Subsidiary: Shenzhen Namtek Company Limited

Date and place of incorporation: December 20, 1995; PRC

Address of registered office:

Registered capital: US$800,000

Registered shareholders and beneficial owners and shareholding: Best Whole Holdings Limited

Directors: Kazuhiro Asano
Koo Ming Kown
Liu Xue Qing
Wong Kuen Ling, Karene

Secretary: Nil

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

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Name of Subsidiary: Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Co., Ltd.)

Date and place of incorporation: 30 June 2003; Japan

Address of registered office: 6^th Floor, Sakura-Masamune, Higashi-Nihonbashi Building 3-12-12 Higashi-Nihonbashi, Chuo-Ku, Tokyo

Authorised share capital: JAP 50,000,000 divided into 500,000 shares

Issued share capital: 100,000 shares of JPY 100 each

Registered shareholders and beneficial owners and shareholding: J.I.C. Technology Company Limited

Directors: Kazuhiro Asano
Toshiaki Sunahara
Koo Ming Kown
Lei Lai Fong, Patinda
Wong Kuen Ling, Karene

Secretary: Nil

Annual accounts date: 31 December

Auditors: Deloitte Touche Tohmatsu

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SCHEDULE 2

Warranties

In this Schedule, unless the context otherwise indicates, each of the Warranties in relation to the Company shall be deemed to be repeated mutatis mutandis in relation to each of the other members of the Group and in such repeated Warranties references to the Company shall be deemed to be references to such other member of the Group.

1.	Corporate Matters
1.1	The Company has been duly incorporated and is validly existing under the laws of its place of incorporation and the Shares are listed and traded on the Stock Exchange. No order has been made or petition presented or resolution passed for the winding up of the Company and no distress, execution or other process has been levied on any of its assets. The Company is not insolvent nor unable to pay its debts as referred to in section 178 of the Companies Ordinance, no receiver or receiver and manager has been appointed by any person of its business or assets or any part thereof, no power to make any such appointment has arisen, the Company has taken no steps to enter liquidation and there are no grounds on which a petition or application could be based for the winding up or appointment of a receiver of the Company.
1.2	The Vendor is the beneficial owner of the Sale Shares, free and clear of any lien, charge, option, right of pre-emption or other encumbrance or third party right whatsoever and the Company has not exercised any lien over any of its issued shares and there is outstanding no call on any of the Sale Shares and all of the Sale Shares are fully paid and rank pari passu with other existing Shares in all respects.
1.3	The Sale Shares constitute all the issued shares in the Company that are owned by the Vendor and no issued Shares in the Company are owned by any associates of the Vendor. The Sale Shares represent approximately 74.99 per cent of all of the issued shares in the capital of the Company.
1.4	The Company has no subsidiary or shares in or stock of any company or a direct or indirect interest in any entity other than the Subsidiaries listed in Part B or Schedule 1. All of the details shown in Parts A and B of Schedule 1 are accurate and not misleading. The Company is not a director or other officer of any other company or entity.
1.5	The Company does not have any place of business or branch or permanent establishment outside Hong Kong or its jurisdiction of incorporation, nor has it carried on any trading activities outside such jurisdictions.
1.6	There are no options or other agreements outstanding which call for the issue of or accord to any person the right to call for the issue of any shares in the capital of the Company (whether of not under the Share Option Scheme) or the right to require the creation of any mortgage, charge, pledge, lien or other security or encumbrance over the Sale Shares or any of the assets of the Company.

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1.7	The copies of the Memorandum and Articles of Association or Bye-Laws (as may be applicable) of the Company provided or to be provided to the Purchaser are accurate and complete in all respects and have attached to them copies of all resolutions and agreements which are required to be so attached. The Company has complied with its Memorandum and Articles of Association or Bye-Laws (as may be applicable) in all material respects, has full power, authority and legal right to own its assets and carry on its business and, to the best of the knowledge of the Vendor, none of the activities, agreements, commitments or rights of the Company is ultra vires or unauthorised.
1.8	The Register of Members and all other statutory books of the Company are up to date (save for Completion matters) and contain true full and accurate records of all matters required to be dealt with therein and the Company has not received any notice of any application or intended application under the Companies Ordinance or any other applicable legislation or regulations for rectification of the Company’s register, and all annual or other returns required to be filed with the Companies Registry or any other relevant authority have been properly filed within any applicable time limit and all legal requirements relating to the formation of the Company and the issue of shares and other securities by the Company have been complied with.
2.	The Accounts
2.1	The Accounts have been prepared in accordance with the requirements of all relevant laws and applicable statements of standard accounting practice and with good and generally accepted accounting principles and practice consistently applied, are complete and accurate in all material respects, show a true and fair view of the state of affairs of the Company and of its results and profits for the financial period ending on the Accounting Date and disclose and make proper provision or reserve for all liabilities (whether actual or contingent and whether quantified or disputed or otherwise) in accordance with the statutory requirements and the applicable generally accepted accounting principles applicable to the Company.
2.2	The Accounts contain proper provision for all Tax including deferred or provisional taxation liable to be assessed on the Company for the accounting period ended on the Accounting Date or for any subsequent period (on the basis of the rates of Tax and taxation statutes in force at the Accounting Date) in respect of any transaction, event or omission occurring or any income or profits or gains earned, accrued or received by the Company on or prior to the Accounting Date or for which the Company is accountable up to such date and all contingent liabilities for Tax have been provided for or disclosed in the Accounts in accordance with the statutory requirements and the applicable generally accepted accounting principles applicable to the Company.
2.3	Except as disclosed in the Disclosure Letter, there are no loans, guarantees, pledges, mortgages, charges, liens, debentures, encumbrances or unusual liabilities given, made or incurred by or on behalf of the Company (and, in particular but without limiting the foregoing, no loans have been made by or on behalf of the Company to any directors or shareholders of the Company or to any associate of any such directors or shareholders) and no person has given any guarantee of or security for any liability of the Company.

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3.	Tax, Records and Returns
3.1	No event, act, transaction or omission has occurred or shall occur between the Accounting Date and Completion which could give rise to a claim under the terms of the Deed of Indemnity and since the Accounting Date no liability or contingent liability for Tax has arisen otherwise than as a result of trading activities in the ordinary course of business of the Company.
3.2	The Company has filed all returns, computations, notices and information required to be made or provided by the Company for any Tax purpose and the same have been made or given within the requisite periods and on a proper basis and when made were true and accurate and are up to date and none of them is or is likely to be the subject of any dispute with any Tax authority.
3.3	The Company has paid when due, and has withheld, deducted and accounted to the relevant Tax authorities for, all Tax, including provisional taxation, which it has become liable to pay, withhold, deduct or account for on or before the date hereof and within the period of seven years prior to the date hereof neither the Company nor any director or officer of the Company has paid or become liable to pay any fine, penalty, surcharge or interest in relation to Tax.
3.4	No payments of rents, interest, annuity, royalties, annual payments, emoluments, remuneration, compensation for loss of office or other sums of an income or revenue nature made or payable by the Company or which the Company is under an obligation to pay in the future have been, are or (under the law as presently in force) may be wholly or partially disallowable as deductions or charges in computing profits or against profits for Tax purposes and no payments have been made since the Accounting Date for which no relief will be received, whether as a deduction or otherwise, for Tax purposes.
3.5	No act or transaction has been or will be effected by the Company, the Vendor or any other person (including the sale of the Sale Shares), in consequence of which the Company is or may be held liable for Tax primarily chargeable against some other person.
3.6	The Company has not entered into or been engaged in or been a party to any transaction which is artificial or fictitious or any transaction or series of transactions or scheme or arrangement of which the main or dominant purpose or one of the main or dominant purposes was the avoidance or deferral of or reduction in the liability to Tax of the Company.
3.7	The Company has not appropriated any trading stock to fixed assets or vice versa, all assets are correctly shown in the Accounts as trading stock/current assets or fixed assets and any property under development is held and shown in the Accounts as fixed assets.
3.8	None of the assets of any member of the Group have been purchased at an under value or been given to any member of the Group in circumstances where the gift or element of under value (including (without limitation) any gift or element of under value which might be regarded as property passing on the death of a deceased

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	pursuant to the provisions of section 6(1)(c) of the Estate Duty Ordinance) might be subject to or give rise to any form of Estate Duty chargeable or assessable against any member of the Group or on any of its assets.
3.9	There is no unsatisfied liability to estate duty attached or attributable to the Sale Shares or any asset of the Company, there has been no transfer of any property to the Company which has given or may give rise to any claim, assessment or demand in relation to estate duty under section 35 of the Estate Duty Ordinance (Chapter 111 of the Laws of Hong Kong), there is no charge or potential charge on any property or assets of the Company under section 18 or section 43(6) of the Estate Duty Ordinance and no person is liable to estate duty attributable to the value of any of the Sale Shares or any asset of the Company.
3.10	All documents to which the Company is a party or which form part of the Company’s title to any asset or in the enforcement of which the Company is or may be interested which are subject to stamp or similar duty have been duly stamped and, where appropriate or necessary, adjudicated.
3.11	No member of the Group has ceased to be associated (within the meaning of section 45(2) of the Stamp Duty Ordinance) with another company or body corporate in circumstances which might give rise to a liability to stamp duty pursuant to section 45(5A) of the Stamp Duty Ordinance where such stamp duty has not been paid in full prior to the date hereof and no member of the Group will prior to or at Completion, whether by virtue of this Agreement or otherwise, cease to be associated (within the meaning of section 45(2) of the Stamp Duty Ordinance) with another company or body corporate in circumstances which might give rise to a liability to stamp duty pursuant to section 45(5A) of the Stamp Duty Ordinance. No member of the Group has entered into a transaction within the period of two years prior to the date hereof in relation to which relief has been claimed pursuant to section 45 of the Stamp Duty Ordinance.
3.12	The information given by the Company to the Customs and Excise Department and all other authorities (whether of Hong Kong or otherwise) in connection with the import or export of any goods was when given true and accurate and the Company has complied with all legislation, regulations, orders, directions or conditions (whether of Hong Kong or otherwise) relating to the import and export of goods and to all customs and excise matters, and all customs duties and tariffs payable by the Company have been paid in full within the applicable time limits.
4.	Trading and General Commercial Matters
4.1	The Company has good title to (with full power to sell) all property and assets as are necessary to enable it properly to conduct its business as such business has been conducted prior to the date hereof and to all stocks used in its business. All such assets and stocks are free from any liens, mortgages, charges, encumbrances or other third party rights and are in the possession or under the control of the Company. The stock is in good condition and of merchantable quality and capable of being sold by the Company in the ordinary course of business to a purchaser in accordance with its list prices without rebate or allowance and all other assets owned or used by the

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	Company are in good repair and capable of being used for the purposes for which they are designed, acquired or used by the Company.
4.2	The Company is not a party to:

4.2.1	any unusual or onerous contract, any contract not entered into in the ordinary course of business or not on arm’s length terms, nor any contract which cannot be terminated without penalty or other compensation on less than twelve months’ notice;
4.2.2	any contract restricting the Company’s freedom of action in relation to its business activities or materially and adversely affecting its business or assets;
4.2.3	any contract for the purchase or use by the Company of materials, supplies, property or equipment which is in excess of the requirements of the Company for its normal operating purposes;
4.2.4	any agency, distribution, marketing, purchasing, franchising, licensing (whether by or to the Company), consulting, management, joint venture, shareholders’ or partnership arrangement or agreement or similar arrangement other than those entered into in the ordinary course of business;
4.2.5	any agreement or arrangement in which any of the Vendor or any of its directors or associates or the directors of the Company is interested (except employment agreements).

4.3

There are no contracts or obligations, agreements, arrangements or concerted practices involving the Company and no practices in which the Company is engaged, which are void, illegal, unenforceable, registrable or notifiable under or which contravene any fair trading or anti-trust legislation or regulations anywhere in the world nor has the Company received any threat or complaint or request for information or investigation in relation to or in connection with any such legislation or regulations.

4.4

With respect to each contract, commitment, arrangement, understanding, tender and bid involving the Company:

4.4.1	the Company has duly performed and complied with each of its obligations thereunder;
4.4.2	the Company is under no obligation which cannot readily be fulfilled, performed or discharged by it on time and without undue or unusual expenditure or effort or loss;
4.4.3	there are no grounds for rescission, avoidance, repudiation or termination and the Company has not received any notice of rescission or termination; and

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4.4.4 none of the other parties thereto is in default thereunder.

4.5	The execution, delivery and performance of this Agreement will not result in the breach, cancellation or termination of any of the terms or conditions of or constitute a default under any agreement, commitment or other instrument affecting the Company or its property or assets or result in the acceleration of any obligation under any loan agreement or in the loss of the benefit of or in liability to refund or repay any grant or any financial or Tax concession or relief or violate any law or any rule or regulation of any administrative agency or governmental body or any order, writ, injunction or decree of any court, administrative agency or governmental body affecting the Company.
4.6	Except as disclosed in the Disclosure Letter, there are no agreements concerning the Company which can be terminated or which have been terminated or under which the rights of any person are liable to be materially adversely affected as a result of a change in the shareholding of or the control of the Company or in the composition of the board of directors of the Company.
4.7	There are no circumstances whereby, following a change in the control of the Company or in the composition of the board of directors of the Company, any of the principal customers of or suppliers or licensors to the Company would have the right to, or would, cease to remain customers or suppliers or licensors to the same extent and of the same nature as prior to the date hereof.
4.8	The Company has no capital commitments in excess of HK$1,000,000.
4.9	The Company has no liabilities except liabilities arising in the ordinary course of business under contracts for service, purchase orders, supply contracts or sale contracts, nor does it have any other liabilities direct or indirect, absolute or contingent, not required by generally accepted accounting principles to be referred to in the Accounts, including, but not limited to, off balance sheet financing arrangements.
4.10	The Company is not the subject of any official investigation or inquiry and, to the best of the knowledge of the Vendor, there are no facts which are likely to give rise to any such investigation or inquiry.
4.11	To the best of the knowledge of the Vendor, the Company is not in material default under any provision of any contract or agreement to which it is a party or by which it is bound and no event has occurred which constitutes a material default, or which with the giving of notice or the passage of time or otherwise, would constitute a default under such contract or agreement or which would require the premature repayment of any loans or other amounts due thereunder or which would result in a material adverse change in the rights or privileges which the Company would otherwise have or enjoy or which would result in a material increase in the liabilities or obligations of the Company and no party with whom the Company has entered into any agreement is in material default thereunder.
4.12	The Company has at all times carried on its business in compliance with all applicable laws and regulations in all material respects. To the best of the knowledge of the

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	Vendor, neither the Company, nor any of its directors or officers, has committed any criminal offence or any tort or any breach of the requirements or conditions of any statute, treaty, regulation, bye-law or other obligation relating to the Company or the carrying on of its business and the Company has obtained and complied with all registrations, licences and consents necessary or advisable for the carrying on of its business in all material respects, and all such registrations, licences and consents are valid and subsisting and, to the best of the knowledge of the Vendor, there is no reason why any of them should be suspended, cancelled or revoked (whether as a result of the sale and purchase of the Sale Shares pursuant to this Agreement or otherwise).
4.13	The Company has given no powers of attorney and no other authority express, implied or ostensible which is still outstanding or effective to any person to enter into any contract or commitment to do anything on its behalf other than the authority of employees to enter into routine trading contracts in the normal course of their duties.
4.14	The Company does not have any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process whether computerised or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership or direct control of the Company.
4.15	The Company has security procedures in place to prevent unauthorised access, amendment or damage to the Company’s data or the data of third parties held, recorded, stored, maintained or operated by the Company or on behalf of the Company by any third party, and, to the best of the knowledge of the Vendor, no unauthorised access, amendment or damage to such data has taken place during the six year period preceding the date hereof.
4.16	No act or transaction has been effected by or on behalf of the Company involving the making or authorising of any payment, or the giving of anything of value, to any government official, political party, party official or candidate for political office for the purpose of influencing the recipient in his or its official capacity in order to obtain business, retain business or direct business to the Company or any other person or firm.
4.17	In the event that Completion takes place on or before the Latest Announcement Date, the amount of Total Cash as at the Completion Date is not less than the relevant Warranted Cash Level. For the avoidance of doubt, if Completion takes place after the Latest Announcement Date, there is no warranty on the Warranted Cash Level as at the Completion Date.
5.	Intellectual Property Rights, including confidential information
5.1	The Company does not use any processes and is not engaged in any activities which involve the misuse of any know-how, lists of customers or suppliers, trade secrets, technical processes or other confidential information (“Confidential Information”) belonging to any third party. There has been no actual or alleged misuse by any person of any of the Company’s Confidential Information. The Company has not disclosed to any person any of its Confidential Information except where such

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	disclosure was properly made in the normal course of the Company’s business and was made subject to an agreement under which the recipient is obliged to maintain the confidentiality of such Confidential Information and is restrained from further disclosing it or using it other than for the purposes for which it was disclosed by the Company.
5.2	The Company does not use any processes, and is not engaged in any activities, which infringe any Intellectual Property Rights of any third party. The Company is the beneficial owner or the licensee of all Intellectual Property Rights used in connection with its business and the same are valid and enforceable. The Company has taken all reasonable actions necessary to maintain its Intellectual Property Rights and there has been no attack or challenge on any grounds in respect of such Intellectual Property Rights. There has been no actual or alleged infringement of any such Intellectual Property Rights.
6.	Software Development
	With respect to all contracts, commitments, arrangements and understandings to which the Company is party or by which it is bound, or has during the period of six years prior to Completion been party or bound, for the design, writing, programming, development, supply or installation of computer software or the like:
6.1	all computer software has been designed, written, programmed and developed in accordance with computer methodologies that are generally recognised in the industry;
6.2	where the Company has the obligation to provide computer software that conforms to a particular specification, the Company has the technical and other capabilities and the human and material resources to produce computer software that satisfies such specifications;
6.3	where such contracts have been completed, all computer software that has been supplied or installed has been fully accepted, no money owing to the Company has been retained by any client or customer for any reason and no material complaint or claim has been received by the Company in relation to any computer software; and
6.4	all computer software that has been supplied or installed by the Company which performs or is or may be required to perform functions involving dates or the computation thereof has the programming, design and performance capabilities to ensure that it will not suffer or cause a malfunction.
7.	Computer Systems and Software
7.1	In this paragraph 7, subject to paragraph 7.9 below, the expression “Software” means all computer programs and software used and developed by the Company in connection with the business of the Company prior to the Completion Date (whether owned by the Company, licensed to the Company by a third party or sub-licensed by the Company pursuant to a licence agreement from a third party). A “malfunction” means failure (i) to accurately record, store, retrieve and process data input and date information, (ii) to function in a manner which does not create any ambiguity as to

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	century, or (iii) to accurately manage and manipulate single century and multi-century formulae, including leap year calculations.
7.2	The Company has title to or right to use each item of the Software including source code and object code, user and other manuals, tapes, indices, descriptive memoranda, original listings, development working papers, calculations and all other relevant documents, media and confidential information free of all encumbrances and adverse claims.
7.3	No property rights of the Company in such Software have been sold, assigned, licensed or disposed of to any party other than by the granting of licences to customers of the Company in the ordinary course of its business.
7.4	All source codes, tapes, indices, descriptive memoranda, original listings, development working papers, calculations and any other documents or media necessary conclusively to prove authorship and ownership of copyright in the Software are in the possession custody or control of the Company.
7.5	Where the Company is entitled to use and, where indicated, to grant sub-licences to third parties to use the Software pursuant to licences and/or consents granted to the Company by the owner or licensee of such Software, all royalties and other payments have been paid when due and, to the best of the knowledge of the Vendor, there has been no act or default by the Company or, where appropriate, its sub-licensees or any other person which may in any way result in such licences being terminated or the Company being unable to obtain any benefit under such licences.
7.6	The Company has not at any time had any dispute with any person relating to proprietary or other rights in or to the Software. All licences relating to the Software granted by the Company are in full force and effect and the Company after due and careful enquiry is not aware of any breach of any terms of any such licences.
7.7	The Software is fit in all material respects for its intended purpose, works in all material respects in accordance with its specifications and user or other manuals, does not contain any material defect or feature which does or may adversely affect its performance or the performance of any other software and is sufficient to fulfil all material commitments entered into by the Company to carry out its business. The Company has not at any time had any material dispute with any person relating to the functionality, quality or fitness for purpose of the Software or relating to its compliance with its specifications or with any warranties given by the Company or any other person relating to it.
7.8	The Company has taken all reasonable steps to ensure that the Software is free of any virus and there are no grounds for believing that any virus has or will come into contact with the Software.
7.9	In respect of any software that is used but not developed by the Company in connection with the business of the Company prior to the Completion Date, the Company has obtained valid licences to use such software and has complied with the terms of such licences in all material respects.

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8.	Insurance
	All assets of the Company of an insurable nature have at all times been and are insured in amounts to the full replacement value thereof against such risks as are in accordance with good commercial practice normally insured against. The Company has at all times maintained such insurance as it is or has been required by any agreement to maintain and has at all times been adequately covered against accident, third party, public liability, product liability and other risks normally covered by insurance and nothing has been done or omitted to be done by or on behalf of the Company which would make any policy of insurance void or voidable or enable the insurers to avoid the same and there is no claim outstanding under any such policy and there are no circumstances likely to give rise to such a claim or result in an increased rate of premium.
9.	Litigation
	Neither the Company nor any person for whose acts or defaults the Company may be vicariously liable is or are engaged whether as plaintiff or defendant or otherwise in any civil, criminal or arbitration proceedings or any proceedings before any tribunal (save for debt collection by the Company in the ordinary course of business) other than those described in the Disclosure Letter, and, to the best of the knowledge of the Vendor, there are no proceedings threatened or pending against the Company or any such person including proceedings in respect whereof the Company is liable to indemnify any party concerned therein and there are no facts which are likely to give rise to any litigation or proceedings. There are no unfulfilled or unsatisfied judgments or orders against the Company or any of its assets.
10.	Employment Matters
10.1	There has been no past and there is no existing or (to the best of the knowledge of the Vendor) threatened or pending industrial or trade dispute involving the Company and any of its employees and there are no agreements or arrangements (whether oral or in writing or existing by reason of custom and practice) between the Company and any trade union or other employees’ representatives concerning or affecting the Company’s employees.
10.2	To the best of the knowledge of the Vendor, no circumstances have arisen under which the Company is likely to be required to pay damages for wrongful dismissal, to make any statutory severance, redundancy or long service payment or to make or pay any compensation for unreasonable dismissal or to make any other payment under any employment protection legislation or to reinstate or re-engage any former employee. To the best of the knowledge of the Vendor, no circumstances have arisen under which the Company is likely to be required to pay damages or compensation, or suffer any penalty or be required to take corrective action or be subject to any form of discipline under the Sex Discrimination Ordinance, the Disability Discrimination Ordinance, the Family Status Discrimination Ordinance or any other laws conferring protection against discrimination, harassment, victimisation or vilification by reason of age, gender, family circumstances, race, religion or disability. There are no current or (to the best of the knowledge of the Vendor) pending or threatened claims of any type against it by any existing or former employees.

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10.3	Except as disclosed in the Disclosure Letter, there are no existing service or other agreements or contracts between the Company and any of its directors or executives or employees which cannot be lawfully terminated by three calendar months’ notice or less without giving rise to any claim for damages or compensation other than a statutory redundancy or severance or long service payment, and the Company has complied with in all material respects its obligations under all ordinances, statutes and regulations, codes, orders and awards in connection with its employees and with all collective agreements with respect to trade unions or to employees of the Company.
10.4	The Company has at all relevant times complied with in all material respects its obligations under statute or otherwise concerning the health and safety at work of its employees, and, to the best of the knowledge of the Vendor, there are no claims capable of arising or threatened or pending by any employee or third party in respect of any accident or injury which are not fully covered by insurance.
10.5	No term of employment of any employee of the Company provides that a change in control of the Company (however change of control may be defined, if at all) shall entitle the employee to treat the change of control as amounting to a breach of the contract or entitling him to any payment or benefit whatsoever or entitling him to treat himself as redundant or otherwise dismissed or released from any obligation.
10.6	There are no occupational retirement schemes (within the meaning in section 2 of the Occupational Retirement Schemes Ordinance), retirement benefits, pension, provident, superannuation, share option (apart from the existence of the Share Option Scheme under which no options are outstanding), share incentive, life assurance, disability or similar schemes, arrangements or obligations for any employees or directors or former employees or directors of the Company or any of their spouses or dependants. Save the employer’s obligations under the Mandatory Provident Fund Schemes Ordinance, the Vendor and the Company have no obligation (whether legally binding or established by custom) to pay any pension, allowance or gratuity or make any other payment on termination of service, death or retirement or to make any payment for the purpose of providing any similar benefits to or in respect of any person who is now or has been an officer or employee of the Company or any spouse or dependant of any such person and are not a party to any scheme or arrangement having as its purpose or one of its purposes the making of such payments or the provision of such benefits. The Vendors and the Company have not announced any proposals to establish any such schemes, arrangements or obligations.
10.7	Except for the forms of employment contracts already disclosed to the Purchaser, the Company has no other forms of written contractual agreements/commitments with any employees or sub-contractors.
10.8	Where personnel has been seconded by other companies or persons to work for any member of the Group, the relevant member of the Group has fulfilled all the withholding obligations in relation to such secondees.
11.	The Properties

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11.1	The Company does not own any land, buildings and premises that are currently occupied or used by the Company.
11.2	The Company has exclusive possession and occupation of the Leased Properties and the leases in respect of the Leased Properties are valid and enforceable against the respective landlords.
11.3	The present use of the Leased Properties is in accordance with the relevant leased agreements for the Leased Properties.
11.4	The Vendor knows of no reason why the existing leases of Leased Properties will not be or are likely not to be renewed on their expiry on similar terms to those in the existing leases (save as regards reasonable commercial increases in rent).
11.5	There is no outstanding rent, management or service charge under any lease in respect of the Leased Properties.
12.	Arrangements with connected persons etc.
12.1	All amounts outstanding and appearing in the books of the Company as loan accounts or as due to directors or shareholders wholly represent money or money’s worth paid or transferred to the Company as the case may be or remuneration accrued due and payable for services rendered. All amounts outstanding between the Vendor or any of its associates and the Company are specifically disclosed in the Accounts.
12.2	There is not outstanding and there has not at any time been outstanding any contract or arrangement to which the Company is a party and in which any of the Vendor, its directors or officers or directors or officers of the Company is or has been interested, whether directly or indirectly, other than arm’s length service contracts and the Company is not a party to, nor have its profits or financial position at any time been adversely affected by, any contract or arrangement which is not of an entirely arm’s length nature, and there is not outstanding any connected transaction (as such term is defined in Chapter 14A of the Listing Rules) relating to the Company; save as aforesaid, there are no agreements or understandings (whether legally enforceable or not) between the Company and any person who is a shareholder or the beneficial owner of any interest in the Company or any other company controlled by any such person relating to the management of the Company’s business or the appointment or the removal of its directors or the ownership or otherwise howsoever relating to the Company or its affairs.
12.3	All costs incurred by the Company have been charged to the Company and not borne by the Vendor or its associates.
13.	Matters since the Accounting Date
	Since the Accounting Date:
13.1	there has been no interruption or alteration in the nature, scope or manner of the Company’s business which business has been carried on lawfully and in the ordinary and usual course of business as previously carried on and so as to maintain it as a

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	going concern;
13.2	there has been no material adverse change in the customer relations of the said business or in the financial condition or the position, prospects, assets or liabilities of the said business or the Company as compared with the position disclosed by the Accounts and there has been no material damage, destruction or loss (whether or not covered by insurance) affecting the said business or its assets;
13.3	no substantial customer or supplier of the Group for the accounting period ending on the Accounting Date has ceased or indicated that it is likely to cease trading with or supply to any member of the Group, or reduced or indicated that it is likely to reduce substantially its trading with or supplies to any member of the Group or changed or indicated that it is likely to change substantially the terms upon which it is prepared to trade with or supply any member of the Group (other than normal price and minor changes);
13.4	the Company has continued to pay its creditors in the ordinary course of business and no unusual trade discounts or other special terms have been incorporated into any contract entered into by the Company;
13.5	the Company has not cancelled, waived, released or discontinued any rights, debts or claims;
13.6	the Company has not incurred any capital expenditure or disposed of any fixed assets having a value of more than HK$1,000,000 in aggregate;
13.7	except as disclosed in the Disclosure Letter, the Company has not hired or dismissed any employee;
13.8	no sum or benefit has been paid, applied or voted to any officer or employee of the Company by way of remuneration, bonus, incentive or otherwise in excess of the amounts paid or distributed to them by the Company at the Accounting Date so as to increase their total remuneration and no new service agreements have been made or entered into by the Company since the Accounting Date and the Company is under no contractual or other obligation in respect thereof nor has the Company changed the terms of service of any officer or employee;
13.9	no dividends, bonuses or other distributions have been declared, paid or made in respect of any of the Shares.
13.10	no share or loan capital of the Company has been issued or agreed to be issued or any option or right thereover granted;
13.11	the Company has not undergone any capital reorganisation or change in its capital structure;
13.12	no resolutions have been passed by the Company and nothing has been done in the conduct or management of the affairs of the Company which would be likely to reduce the net asset value of the Company;

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13.13	the Company has not made any purchase or sale or introduced any method of management or operation in respect of the business undertaking or assets of the Company except in a manner consistent with proper prior practice;
13.14	the Company has not incurred or become subject to any liability or obligation (absolute or contingent) except current liabilities and obligations incurred under contracts entered into in the ordinary course of business;
13.15	the Company has not discharged or satisfied any lien or encumbrance or any other obligation or liability (absolute or contingent) other than liabilities disclosed in the Accounts as at the Accounting Date and current liabilities incurred since the Accounting Date in the ordinary course of business; and
13.16	the Company has not acquired or disposed of or granted any right or option or created any other encumbrance over any shares or securities of any member of the Group or any of the Properties or any land or buildings or any estate or interest therein or parted with possession of the whole or any part thereof or agreed to do any of the same.
14.	Accuracy of Information Provided
14.1	All information contained in this Agreement (including the Recitals and Schedule 1) is true and accurate in all respects and not misleading in any respect.
14.2	All information given to the Purchaser and its professional advisers by the Vendor and its officers and employees during the negotiations prior to this Agreement was when given and is at the date hereof true and accurate in all material respects.
14.3	All information contained in the Disclosure Letter is true and accurate in all material respects and fairly presented and there is no fact or matter which has not been disclosed in the Disclosure Letter which renders any such information untrue or misleading and there is no fact or matter concerning the Company and its business and affairs which has not on the basis of the utmost good faith been disclosed in the Disclosure Letter which would reasonably be expected to influence the decision of the Purchaser to proceed with the purchase of the Sale Shares on the terms of this Agreement.
15.	Listing Rules and Related Matters
15.1	The Company has at all times complied with its material obligations under the Listing Rules and each member of the Group has at all times complied with all laws, rules and regulations governing companies whose shares are listed on the Stock Exchange in all material respects.
15.2	The Company has not received any notice or warning from the SFC or the Stock Exchange alleging any breach or failure to comply, by it or any member of the Group, of or with any aspect of the Listing Rules or any rules, regulations or laws governing or applying to companies whose shares are listed on the Stock Exchange, and the Vendor knows of no reason why any such notice might be received or be imminent.

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15.3	No member of the Group and no director or other officer of any member of the Group is now or has in the preceding three years been involved in any dispute with or any investigation by the SFC or the Stock Exchange.
16.	Authority
16.1	The Vendor has the power or the corporate power to enter into and perform its obligations under this Agreement and to carry out the transactions contemplated hereby.
16.2	The Vendor has taken all necessary action or corporate action to authorise the entering into and performance of this Agreement and to carry out the transactions contemplated hereby, and this Agreement is a valid and binding obligation on it.
17.	Certain Specific Agreements and Arrangements
	Where the Group terminates the agreements and arrangements set out in Schedule 5 within three months from Completion, the aggregate amount payable by the Group under such agreements and arrangements (including, but not limited to, compensation for termination, if any) will not exceed HK$1,000,000.

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SCHEDULE 3

Deed of Indemnity

THIS DEED OF INDEMNITY is made on the           day of                               2008

BETWEEN:

(1)	NAM TAI ELECTRONICS, INC., a company incorporated in the British Virgin Islands, whose registered office is at McNamara Chambers, P.O. Box 3342, Road Town, Tortola, British Virgin Islands (the “Vendor”);
(2)	the companies whose particulars are set out in the Schedule hereto; and
(3)	HKC (HOLDINGS) LIMITED, a company incorporated in Bermuda, whose registered office is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda (the “Purchaser”).

WITNESSES as follows:

1. In this Deed unless the context otherwise requires:

1.1	the “Agreement” means the agreement made between the Vendor and the Purchaser on 26 February 2008 for the sale and purchase of the Sale Shares pursuant to which this Deed has been entered into;
1.2	“event” includes (without limitation) any omission, event, action or transaction whether or not the Company or any of the Subsidiaries is a party thereto, the death of any person, a change in the residence of any person for any Tax purpose, a failure to make sufficient dividend payments to avoid an apportionment or deemed distribution of income and the entering into and completion of the Agreement and references to the result of events on or before the date hereof shall include the combined result of two or more events one or more of which shall have taken place before the date hereof;
1.3	“relief” includes (without limitation) any relief, allowance, credit, set off, deduction or exemption for any Tax purpose;
1.4	reference to income or profits or gains earned, accrued or received shall include income or profits or gains deemed to have been or treated as or regarded as earned, accrued or received for the purposes of any legislation;
1.5	reference to any Tax liability shall include not only any liability to make actual payments of or in respect of Tax but shall also include the amount of tax losses which have been disclosed in the Accounts but would not be available after Completion;
1.6	reference to the “Company” includes a reference to each of the Subsidiaries;

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1.7	reference to a payment in respect of Tax includes (without limitation) a payment for the surrender or transfer of any relief, a repayment of any such payment and a payment by way of reimbursement, recharge, indemnity or damages;
1.8	words and expressions defined in the Agreement shall have the same meaning, and any provisions of the Agreement concerning matters of construction or interpretation shall apply, in this Deed; and
1.9	if there is a conflict between the Agreement and this Deed, this Deed prevails to the extent of the conflict.

2. Subject as hereinafter provided, the Vendor hereby covenants with and undertake to indemnify the Purchaser for itself and as trustee for its successors in title and the Company and the Subsidiaries and each of them and to keep them indemnified against 74.99% in respect of the Purchaser for itself and as trustee for its successors, or (if so elected by the Purchaser in which case the Purchaser shall cease to be entitled to pursue any claim hereunder for itself) 100% in respect of the Company and the Subsidiaries, of the following:

2.1	any Tax liability of the Company or any of the Subsidiaries resulting from or by reference to any income, profits or gains earned accrued or received on or before the Completion Date or any event on or before the Completion Date whether alone or in conjunction with other circumstances and whether or not such Tax is chargeable against or attributable to any other person; and
2.2	any Tax liability of the Company or any of the Subsidiaries referred to in Clause 2.1 and which is regarded as such pursuant to the provisions of Clause 1.5; and
2.3	any Tax liability of the Company or any member of the Group that arises after Completion as a result of an act, omission or transaction by a person other than the Company or any member of the Group (but who were otherwise under control of the Vendor) and which liability to Tax falls upon the Company or the relevant member of the Group as a result of its having been in the same group for Tax purposes as that person at any time before Completion; and
2.4	any Tax liability of the Company or any of the Subsidiaries that would not have been payable had there been no breach of any Tax Warranties and which is not the subject of the covenants in sub-Clauses 2.1, 2.2 and 2.3 above; and
2.5	all costs and expenses which are reasonably and properly incurred by the Purchaser or the Company or any member of the Group in connection with any of the matters referred to in this Clause 2 or in taking or defending any action under this Deed (including, without prejudice to the generality of the foregoing, all legal and other professional fees and disbursements).

3. The indemnities given by this Deed do not apply to any liability:

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3.1	to the extent that provision or reserve in respect thereof has been made in the Accounts or to the extent that payment or discharge of such liability has been taken into account therein;
3.2	in respect of which provision or reserve has been made in the Accounts which is insufficient only by reason of any increase in rates of Tax made after the date hereof with retrospective effect;
3.3	for which the Company is primarily liable as a result of transactions in the ordinary course of its business or normal day to day trading operations since the Accounting Date;
3.4	in respect of any matter to the extent that the same would not have occurred but for any matter or thing done or omitted to be done pursuant to and in compliance with the Agreement or otherwise at the request in writing or with the approval in writing of the Purchaser, or any act, omission or transaction of the Purchaser or its directors, officers, employees or agents or successors in title, after Completion, provided that no member of the Group has ceased to be associated (within the meaning of section 45(2) of the Stamp Duty Ordinance) with another company or body corporate in circumstances which might give rise to a liability to stamp duty pursuant to section 45(5A) of the Stamp Duty Ordinance where such stamp duty has not been paid in full prior to the date hereof and no member of the Group will prior to or at Completion, whether by virtue of the Agreement or otherwise, cease to be associated (within the meaning of section 45(2) of the Stamp Duty Ordinance) with another company or body corporate in circumstances which might give rise to a liability to stamp duty pursuant to section 45(5A) of the Stamp Duty Ordinance;
3.5	to the extent that it arises (or is increased) because of any claim, election, surrender or disclaimer made or notice or consent given or any other thing done on or after Completion by a member of the Group or the Purchaser or any of their respective representatives under the provisions of any legislation relating to Tax, other than such claim, election, surrender or disclaimer made or notice or consent related to an event as referred to in Clause 2 and the making, giving or doing of the same is with the concurrence of the Vendor;
3.6	to the extent that it arises (or is increased) because of a failure or omission on the part of a member of the Group on or after Completion to make any claim, election, surrender or disclaimer or give any notice or consent or do any other thing under the provisions of any legislation relating to Tax the making, giving or doing of which was taken into account in computing the provision for Tax in the Accounts;
3.7	to the extent that it arises in respect of accrued gains which relate to the Company’s period of ownership of the relevant chargeable asset prior to Completion where the gains are not realised until after Completion;
3.8	to the extent that it arises in consequence of a change in the date to which a member of the Group makes up its accounts or a change of any of its accounting policies, bases or practices in either case after Completion;

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3.9	to the extent that the Tax liability would not have arisen but for a disclaimer of capital allowances or any other relief or a revision to or revocation of a claim therefore where such revision or disclaimer is caused or made by the member of the Group after the Completion Date, other than with the concurrence of the Vendor;
3.10	to the extent that the Tax liability arises or is increased as a consequence of any failure by the Purchaser or a member of the Group to comply with any of their respective obligations under this Deed;
3.11	to the extent that the Tax liability arises or is increased as a result of any delay or default by the Purchaser or any member of the Group in paying over to any Tax authority any amount received from the Vendor under this Deed or for breach of the Tax Warranties;
3.12	to the extent that an amount in respect of the Tax liability has already been recovered by the relevant member of the Group from another person (not being the Purchaser or a member of the Group);
3.13	to the extent that it has been discharged before Completion;
3.14	to the extent that it has been made good by insurers or otherwise compensated for without cost to the Purchaser or the Group; or
3.15	to the extent that it would not have arisen but for a cessation of, or any changes in the conduct of, any trade carried on by a member of the Group at Completion, being a cessation or charge occurring on or after Completion.

4.

The limitations to the Vendor’s liabilities set out in Clauses 8.12 and 8.13 of the Agreement shall apply to this Deed, save that such limitations shall not apply to any Tax liability relating to J.I.C. Enterprises (Hong Kong) Limited.

5.

If the Purchaser shall become aware of any assessment, notice, demand or other document issued or action taken by or on behalf of any person, authority or body from which it appears that the Company or any of the Subsidiaries has or may have a liability in respect of which a claim could be made under this Deed, it shall give written notice thereof to the Vendor and shall (if the Vendor shall indemnify and secure the Purchaser and the Company and the Subsidiaries as applicable to the Purchaser’s reasonable satisfaction against any liabilities, costs, damages or expenses which may be reasonably and properly incurred thereby) take such action and procure that the Company and/or the relevant Subsidiary shall take such action as the Vendor may reasonably request to dispute, resist or compromise the liability; provided that neither the Company nor the relevant Subsidiary nor the Purchaser shall be required to take any such action which would adversely affect the future conduct of the business of the Purchaser or the Company or any of the Subsidiaries or any subsidiaries of the Purchaser to a material extent, or adversely affect the rights of any of them to a material extent, or adversely affect reputations of any of them.

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6.	The liability of the Vendor under this Deed shall cease after the date falling on the seventh anniversary hereof except in respect of matters which have been the subject of a written claim (stating in reasonable detail the specific matters and amount in respect of which such claim is made) made within the said period by the Purchaser, the Company and/or any of the Subsidiaries to the Vendor unless the claim in question has arisen by reason of fraud, wilful concealment or dishonesty on the part of the Vendor or, prior to the date hereof, the Company or any member of the Group or any of its officers in which event there shall be no contractual limit on the time period within which such claim may be brought.
7.	The Vendor will not be liable for a claim under this Deed to the extent that an equivalent claim has been made under the Warranties and the Vendor has satisfied such equivalent claim, and vice versa.
8.	If the Vendor has made a payment to the Purchaser under this Deed or under the Tax Warranties and any member of the Group is entitled to recover from any third party (including any Tax authority) any sum in consequence of any event to which the payment made by the Vendor relates, and the Vendor agrees to indemnify and secure the Purchaser and the Company and the Subsidiaries as applicable against any liabilities, costs, fees or expenses which may be reasonably and properly incurred thereby, the Purchaser shall and shall procure that each relevant member of the Group shall use all reasonable endeavours to effect such recovery and the Vendor may require the Purchaser by notice in writing to take and to procure that each relevant member of the Group takes such action as the Vendor reasonably requests to recover such sums.
9.	The due date for the making of payments under this Deed shall be:

9.1	where the payment relates to a liability of the Company or any of the Subsidiaries to make an actual payment of or in respect of Tax, the date which is seven days before the date on which such actual payment is due to be made to the relevant authority;
9.2	where the payment relates to a matter falling within Clause 1.5 (other than an actual payment), the date falling seven days after the Vendor has been notified by the Purchaser that the auditors for the time being of the Company or the relevant Subsidiary have certified at the request of the Purchaser or the Company or the relevant Subsidiary that the Vendor has a liability for a determinable amount under Clause 2;
9.3	in the case of costs and expenses within Clause 2.5 the date on which such costs and expenses are incurred; and
9.4	where the payment relates to a matter falling within Clause 8 and is required by the Vendor, within seven days after receipt of any sum so recovered by the Purchaser which any member of the Group actually recovers less any liabilities, costs, fees or expenses reasonably and properly incurred by the Purchaser or any member of the Group in respect of the matter in question.

10. If any payment due to be made under this Deed is not made on the due date for payment thereof the same shall carry interest from such due date of payment until

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	actual payment at the rate of Hong Kong Interbank Offer Rate from time to time of Hong Kong Bank compounded on the last days of March, June, September and December in each year.
11.	If any sum payable under this Deed shall be subject to Tax (whether by way of deduction or withholding or direct assessment of the person entitled thereto) such payment shall be increased by such an amount as shall ensure that after deduction, withholding or payment of such Tax the recipient shall have received an amount equal to the payment otherwise required hereby to be made.

12. The Vendor shall give all such assistance and provide such information as the Purchaser shall reasonably request from time to time for the purpose of enabling the Purchaser or the Company any member of the Group to make returns and provide information as required to any Tax authority and to negotiate any liability to Tax.

13. No delay or forbearance on the part of any such person in exercising any right power or privilege under this Deed shall impair such right power or privilege or be construed as a waiver thereof and any single or partial exercise of any such right power or privilege shall not preclude the further exercise thereof.

14. Any notice required to be given by any party hereto to any other shall be deemed validly served by hand delivery or by prepaid registered letter sent through the post (airmail if to an overseas address) or by facsimile transmission to its address given herein or such other address as may from time to time be notified for this purpose and any notice served by hand shall be deemed to have been served on delivery, any notice served by facsimile transmission shall be deemed to have been served when sent and any notice served by prepaid registered letter shall be deemed to have been served 48 hours (72 hours in the case of a letter sent by airmail to an address in another country) after the time at which it was posted and in proving service it shall be sufficient (in the case of service by hand and prepaid registered letter) to prove that the notice was properly addressed and delivered or posted, as the case may be, and in the case of service by facsimile transmission to prove that the transmission was confirmed as sent by the originating machine.

15. If any provision or part of a provision of this Deed shall be, or be found by any authority or court of competent jurisdiction to be, invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions or parts of such provisions of this Deed, all of which shall remain in full force and effect.

16. This Deed shall be governed by and construed in accordance with the laws of Hong Kong and the parties hereto irrevocably submit to the non exclusive jurisdiction of the Hong Kong Courts for the purposes of enforcing any claim arising hereunder.

17. The Vendor hereby irrevocably appoints Wilkinson & Grist of 6th Floor, Prince’s Building, 10 Chater Road, Central, Hong Kong as its agent to receive and acknowledge on its behalf service of any writ, summons, order, judgment or other notice of legal process in Hong Kong. If for any reason the agent named above (or its successor) no longer serves as agent of the Vendor for this purpose, the Vendor shall promptly appoint a successor agent satisfactory to the Purchaser, notify the Purchaser thereof and deliver to the Purchaser a copy of the new process agent’s acceptance of

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appointment Provided that until the Purchaser receives such notification, it shall be entitled to treat the agent named above (or its said successor) as the agent of the Vendor for the purposes of this Clause. The Vendor agrees that any such legal process shall be sufficiently served on it if delivered to such agent for service at its address for the time being in Hong Kong whether or not such agent gives notice thereof to the Vendor.

IN WITNESS whereof this Deed has been executed and is intended to be and is hereby delivered on the date appearing at the head hereof.

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SCHEDULE
Details of the Company and the Subsidiaries

1.	J.I.C. Technology Company Limited, a company incorporated in the Cayman Islands whose registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands
2.	J.I.C. (Macao Commercial Offshore) Company Limited, a company incorporated in Macau whose registered office is at Unit D, 17th Floor, Edificio Comercial Rodrigues, 599 da Avenida da Praia Grande, Macau
3.	Best Whole Holdings Limited, a company incorporated in Hong Kong whose registered office is at Suites 1506-1508, One Exchange Square, 8 Connaught Place, Hong Kong
4.	Joy Holdings Limited, a company incorporated in British Virgin Islands whose registered office is at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
5.	J.I.C. Enterprises (Hong Kong) Limited, a company incorporated in Hong Kong whose registered office is at Suites 1506-08, One Exchange Square, 8 Connaught Place, Central, Hong Kong
6.	Shenzhen Namtek Company Limited, a company incorporated in the PRC whose registered office is at
7.	Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Co., Ltd.), a company incorporated in Japan whose registered office is at 6th Floor, Sakura-Masamune, Higashi-Nihonbashi Building, 3-12-12 Higashi-Nihonbashi, Chuo-Ku, Tokyo

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THE COMMON SEAL of	)
NAM TAI ELECTRONICS, INC.	)
was hereunto affixed	)
in the presence of:	)
THE COMMON SEAL of	)
HKC (HOLDINGS) LIMITED	)
(for and on behalf of itself and	)
the companies set out in the	)
Schedule as trustee)	)
was hereunto affixed	)
in the presence of:	)

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SCHEDULE 4

Letter of Resignation under Seal

To: The Board of Directors of [•]

Dear Sirs,

[I/We] hereby resign as [a director]/[the company secretary] [and employee] of [•] with immediate effect and hereby confirm that [I/We] have no claim outstanding against [•] for compensation for loss of office or otherwise.

Dated this           day of                               2008.

SIGNED SEALED and DELIVERED	)
as a Deed by [name of person]	)
in the presence of:	)

The original of this letter of resignation has been posted to [or left] at the [registered office] / [principal place of business] of the company on [•].

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SCHEDULE 5

Agreements and arrangements relating to the employees or the affairs of the Group as referred to in
paragraph 17 of Schedule 2

The Company

1. The arrangement of sharing of total overheads of office space at Suites 1506-1508, 15^th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong (for an amount of US$24,000 per month) between the Company and ZPT, as approved in the Company’s board resolutions dated 23 December 2005.

2.	The Company’s sharing of costs incurred for Changeover Project with two other parties under a Consultancy Agreement entered into among the Hong Kong Productivity Council, ZPT and NTEEP, as approved in the Company’s board resolutions dated 28 May 2007.
3.	Employment agreements of two employees, namely, Chan Bo Shan and Yuen Yee Ling, Elaine.

Kabushiki Kaisha Namtek Japan (expressed in English as Namtek Japan Co., Ltd.) (“Namtek Japan”)

4. Retirement of Mr. Kazuhiro Asano (Namtek Japan shall not be liable to pay any amounts to Mr. Asano for such purpose apart from a severance pay which shall not be more than JPY2,925,000.)

54

SIGNED by John Farina		)
for and on behalf of		)	/s/ John Q. Farina
NAM TAI ELECTRONICS, INC.		)
in the presence of:		)
	Jeckle Chu
	JSM
	in association with Mayer Brown LLP
	and Mayer Brown International LLP
	Solicitor, Hong Kong SAR
SIGNED by Eric Oei		)
for and on behalf of		)	/s/ Eric Oei
HKC (HOLDINGS) LIMITED		)
in the presence of:		)
	James Chan
	/s/ James Chan

55

EX-12.1

Exhibit 12. 1

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

     I, Masaaki Yasukawa, certify that:

1. I have reviewed this annual report on Form 20-F of Nam Tai Electronics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

     Date: March 17, 2008

/s/ Masaaki Yasukawa                                                            
Masaaki Yasukawa
Chief Executive Officer
 

EX-12.2

Exhibit 12. 2

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

     I, John Q. Farina, certify that:

1. I have reviewed this annual report on Form 20-F of Nam Tai Electronics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

     Date: March 17, 2008

/s/ John Q. Farina                                                            
John Q. Farina
President and Chief Financial Officer
 

EX-13.1

Exhibit 13.1

CERTIFICATION PURSUANT TO
RULE 13A-14(B) AND 18 U.S.C. SECTION 1350

     In connection with the Annual Report of Nam Tai Communications, Inc. (the “Company”) on Form 20-F for the period ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on March 17, 2008, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his and her knowledge:

     1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Masaaki Yasukawa                                                          
Masaaki Yasukawa, Chief Executive Officer
 

/s/ John Q. Farina                                                                   
John Q. Farina, President and Chief Financial Officer
 

EX-25.1

Exhibit 25.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the incorporation by reference in Registration Statement No. 333-76940 on Form S-8 and Registration Statement No. 333-136653 on Form S-8 of our reports relating to the financial statements and the related schedule of Nam Tai Electronics, Inc. and the effectiveness of Nam Tai Electronics, Inc.’s internal control over financial reporting dated March 17, 2008, appearing in the annual report on Form 20-F of Nam Tai Electronics, Inc. for the year ended December 31, 2007.

/s/ Deloitte Touche Tohmatsu
DELOITTE TOUCHE TOHMATSU
Hong Kong
March 17, 2008