<PAGE>
                                                                    Exhibit 10.2


                         [MCW. TODMAN & CO. LETTERHEAD]


Our Ref: MC 69/97

Your Ref:  MC/TB/110198                                        February 10, 2003

Messrs. Grant Thornton
13th Floor Gloucester Tower
11 Pedder Street
Central Hong Kong

Attn: Mr. Tim Borzell

Dear Sirs:

We refer to your email to Mr. Jackie Wah of Nam Tai Electronics, Inc. of
February 8, 2003.

You are aware that on January 21, 2003, the High Court in the British Virgin
Islands delivered its decision on the application filed by the Liquidator of
Tele-Art Inc. on February 4, 1999 and made the following Orders: (i) that all
company property withheld by the Nam Tai either before or during the winding up
is wrongful and should be handed over to the Company in liquidation; (ii) that
the redemption and set off of dividends of the 138,500 Tele-Art Shares be set
aside and that those shares be handed over to the Company in liquidation; (iii)
that Nam Tai should pay costs in the sum of $15,000 to the Company in
liquidation.

On February 4, 2003, Nam Tai filed an application for leave to appeal against
the Order.  Included in the application is the draft Notice of Appeal against
the Order which specifies 8 grounds of appeal.  A copy of this draft Notice of
Appeal is attached hereto.

The essence of the grounds of appeal is that Nam Tai is of the view that the
High Court Judge did not properly consider the evidence and submissions made
before her.

Firstly the Judge seems to have started on the premise that Nam Tai was seeking
to enforce its position as a secured creditor by virtue of a charging Order by
the Court.  On the contrary this charging Order had been discharged by the court
since 1997 and Nam Tai was asserting its rights under the equitable charge
created by the lien over the shares for the indebtedness of Tele-Art as a
shareholder.
<PAGE>
The second and third grounds of appeal deal with the fact that Bank of China
stated that it is a secured creditor by virtue of share charges entered by
Tele-Art and Robert Yuen. However, Bank of China has never confirmed the extent
of its debt to the Court and the purported statement that was referred to in
the evidence during the hearing was not admitted into evidence. Additionally
Bank of China has not proven that the share charges are valid in accordance
with their proper law i.e. the law of Hong Kong. In the absence of such proof,
the Court should not have accepted that Bank of China is a secured creditor
with priority over Nam Tai's equitable charge.

The fourth and fifth grounds of appeal assume that Bank of China's charge is
valid according to the laws of Hong Kong and that there is a debt due to the
Bank from Tele-Art. Under the laws of the BVI, the status of a charge over
shares may be legal or equitable. If legal, the charge prevails over all other
charges, save those of which the chargee had notice at the time of the
creation of the legal charge. In order to create a legal charge over shares,
the chargee must have himself registered in the register of members of the
company. Bank of China did not do so. Therefore our submission is that the
charge could at best be no more than an equitable charge and therefore subject
to all prior equitable charges such as that arising under the lien in the
Articles of Association. Further we will submit that as an equitable chargee,
Bank of China could be in no better position than Tele-Art in respect of
alterations in the Articles of Association which constitute a contract between
the shareholders and the company. Therefore Bank of China would be bound by the
alterations made to the Articles of Association in 1998.

Ground six of the grounds of appeal deal with the acceptance and consideration
by the Judge of a statement appearing in the skeleton submissions of Nam Tai's
Counsel in 1998 that Bank of China has a secured charge and Nam Tai is
unsecured. In our view, that statement was taken out of context as the priority
of charges was not in issue in that application.

The final ground of appeal deals with the refusal of the Judge to apply the
doctrine of marshalling in the circumstances. This doctrine allows the court to
compel a secured creditor who has security for his debt over more than one
asset that is sufficient to satisfy his debt to apply those assets that do not
also constitute security for another creditor so that both creditors may be
able to have their debts satisfied. Bank of China states that it has security
over real property as well as the shares whereas Nam Tai's lien extends only to
the shares. In the circumstances, Nam Tai should be allowed to exercise its
security over the shares and Bank of China should exercise its security over
the real property.

We trust that this clarifies our position in the matter.

Yours sincerely,


/s/ McW. Todman & Co.
McW. TODMAN & CO.