Exhibit 4.18
 [Letterhead of HSBC Bank (China) Company Limited]
 CONFIDENTIAL
 
 
    BANKING FACILITIES (S/N: 090714)
 such later
date as determined by the Lender at its sole discretion.
 Borrower :
    
    Namtai Electronic (Shenzhen) Company Limited(CHINESE CHARACTER)Lender :
    
    HSBC Bank (China) Company Limited, Shenzhen BranchFacility
/Amount :
    
    For avoidance of doubt, each and all the facilities set
out below are of the revolving nature, i.e. any utilised
but repaid amount under any such facility is available
for re-utilisation, subject to the terms and conditions
of this Facility Letter.Import Facilities up to USD5,000,000.-Documentary Credit 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.
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Within whichGoods under your control and/or Trust Receipts up to USD5,000,000.-Facility(ies) will only be made available subject to availability of
funding.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.Purpose :
    
    To finance the Borrowers working capital requirementThe Borrower shall apply the loan proceeds for the purpose as set out above
and shall comply with the requirements of the relevant PRC laws and
regulations. The Borrower shall not apply the loan proceeds for any other
purpose, including but not limited to, applying the loan proceeds for
equity investments, applying the loan proceeds for speculation in the stock
market, the futures market, the real estate market or other similar market
speculation.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) 30 July 2010,
subject to review and renewal at the Lenders sole
discretion and as unilaterally advised by the Lender
from time to time.Market Disruption /
Increased Costs :
    
    Without prejudice to our overriding right of
suspension, withdrawal and repayment on demand, we
would reserve our right to renegotiate any of the
interest margins, fees and the applicable period of
PBOC base rate detailed herein (in case there is any
Loan denominated in RMB) in the event of any change
occurring in any applicable law or regulation (or its
interpretation) or in PRCs financial markets or the
need to comply with any requirement of any
regulatory/governmental authority (whether or not
having the force of law), which resulted, in our
opinion, in an increase of the cost of advancing,
maintaining or funding any facilities, a change on
the basis to calculate the interest margins,
deviation from the RMB interest rate regime permitted
by PRC laws or regulations (or its interpretation),
and/or a reduction in the net return to us from the
facilities outlined herein. Before the renegotiated
interest margins, fees or applicable base rate is
agreed, the Bank has the sole discretion to charge
the Borrower the revised interest and fees with a
notice to the Borrower. However, if such change in
applicable laws and regulations or the requirements
of relevant regulatory/governmental authorities have
retrospective effect, the Customer shall indemnify
the Bank against the increase of cost and/or the
reduction in the net return suffered by the Bank in
respect of relevant period affected by such
retrospective effect within 5 Business Days upon
receipt of written notice from the Bank. The Banks
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written notice setting out its claim for such indemnity shall be the conclusive
evidence for the indemnity amount payable to the Bank by the Customer, unless
the Banks claim conflicts with relevant laws, regulations,
regulatory/governmental requirements in the PRC.Commission/Interest :
    
    Import Facility Interest RateThe Applicable Interest Rate for Import Loans
hereunder shall be 0.55% per annum over Singapore
Interbank Money Market Offer Rate (SIBOR)/ London
Interbank Money Market Offer Rate (LIBOR)/ Hongkong
Interbank Money Market Offer Rate (HIBOR) of
USD/JPY/HKD for 1, 2 or 3 months or any other
interest period as may be determined by the Lender
and the principal and all accrued interests shall be
paid on the due date of each drawing to the debit of
your account.SIBOR: SIBOR shall be determined as the United States Dollar interest rates
quoted on the Reuters Screen page SIBOR as of 11:30 a.m. (Singapore Time),
two Singapore business days prior to the first day of each Interest Period.LIBOR: LIBOR shall be determined as the JPY interest rates quoted on the
Reuters Screen page LIBOR as of 11:00 a.m. (London Time), two London
business days prior to the first day of each Interest Period.HIBOR: HIBOR shall be determined as the HKD interest rates quoted on the
Reuters Screen page HIBOR as of 11:30 a.m. (Hong Kong Time), two Hong Kong
business days prior to the first day of each Interest Period.ALL the above provisions shall not be read as excluding both parties
entering into any agreement in writing on any other applicable interest
rates and/or other interest rate modification mechanism in respect of all
or any part of the above mentioned facilities in whatever currencies. Such
otherwise agreed Applicable Interest Rate shall be specified in the
relevant drawdown request of the Borrower.Documentary Credits opening commission for each validity of 90 days
or part thereof to be charged as below with minimum charge of USD24.- and
payable in full at the time of issuance of all Documentary Credits.
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Documentary Credits Amount
    
    CommissionFor Documentary Credits amount below USD100,000.- or its
equivalent
    
    
    0.10
    %For Documentary Credits amount between USD100,000.-
(USD100,000.- inclusive) and USD250,000.- or its equivalent
    
    
    0.08
    %For Documentary Credits amount between USD250,000.-
(USD250,000.- inclusive) and USD400,000.- or its equivalent
    
    
    0.06
    %For Documentary Credits amount above USD400,000.- (USD400,000.-
inclusive) or its equivalent
    
    
    0.04
    %
 Export Documentary Credits / Non- Documentary Credits Bill Handling
Commission:
 Export Documentary Credits / Non- Documentary Credits Bill
    
    CommissionFirst USD75,000.- (inclusive) or equivalent
    
    
    0.125
    %Between USD75,000.- and USD300,000.- (inclusive) or its
equivalent
    
    
    0.0625
    %Balance in excess of USD300,000.-
    
    
    0.03125
    %
 Commission in lieu of exchange: Waived
 Default 
Interest :
    
    Please note Default 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 follows:Overdue or overlimit sums: Default interest is charged at 3% p.a.
over the stipulated interest rate of this facility, subject to fluctuation
at the lenders discretion.Loan amount used for purposes other than stated in this letter:Default interest is charged at 5% p.a. over the stipulated interest rate of
this facility, subject to fluctuation at the lenders discretion.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
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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. Break Funding Cost: 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 shall require:A Corporate Guarantee for USD5,000,000.- from Nam Tai Electronics Inc.
(the Guarantor) supported by a board resolution and legal opinion issued
by lawyer acceptable to the bank, which shall replace the existing
Corporate guarantee for USD5,000,000.- from Nam Tai Electronic & Electrical
Products Limited upon Nam Tai Electronic & Electrical Products Limited s
formal delisting.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.
 ConditionsPrecedent :
    
    
    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
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(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.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
    )
    
    Half-yearly and 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 90 days and 120 days from the
financial half-year-ends and year-ends respectively.4
    )
    
    Other financial or operational information of
the Borrower as from time to time reasonably requested by the Lender.
 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,
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execution and enforcement of this facility shall be borne by the Borrower.Taxation andDeduction :
    
    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 branch(es) (if any).Governing Law :
    
    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):
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For and on behalf of
    
    Accepted byHSBC Bank (China) Company Limited
    
    Namtai Electronic (Shenzhen) Company LimitedShenzhen Branch
    
    (CHINESE CHARACTER)
 /s/ Faye Zhou
    
    
    
    /s/ [Signature Illegible]Faye Zhou
    
    [Chop Impressed]
    
    Authorized Signature(s) &Vice President
    
    
    
    Company Chop [Chop Impressed]Commercial Banking
    
    
    
    Date:
 /s/ Barry Yiu

Barry YiuSenior Vice PresidentCommercial Banking
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