Document:

<PAGE>

                                                                    EXHIBIT 4.12

Private & Confidential

                        Dated the 15th day of April 2004

                            NAM TAI ELECTRONICS INC.

                                  in favour of

                NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

                                       and

                                THE SUBSIDIARIES
                               (as defined herein)

                                DEED OF INDEMNITY
                         relating to the Global Offering
      of 200,000,000 shares (subject to over-allotment option) of each of
                Nam Tai Electronic & Electrical Products Limited

[JOHNSON STOKES & MASTER LOGO]

<PAGE>

                                    CONTENTS
DEED OF INDEMNITY

<TABLE>
<CAPTION>
Clause      Heading                         Page
<S>         <C>                             <C>
1           Definitions and Interpretation   1
2           Conditions ...................   4
3           Estate Duty Indemnity ........   4
4           Taxation Indemnity ...........   5
5           Payment ......................   7
6           Conduct of Claims ............   7
7           Repayments and Refunds .......   8
8           Successors and Assigns .......   8
9           Rights and Remedies ..........   8
10          Notices ......................   9
11          Miscellaneous ................  10
SCHEDULE    Subsidiaries .................  12

EXECUTION.................................  13
</TABLE>

                                                                          Page i

<PAGE>

THIS DEED OF INDEMNITY is dated 15 April, 2004 and is made by:

(1)   NAM TAJ ELECTRONICS INC., a company incorporated under the laws of the
      British Virgin Islands, having its registered office at McNamara Chambers,
      P. 0, Box 3342, Road Town, Tortola, British Virgin Islands (the
      "INDEMNIFIER")

IN FAVOUR OF:

(2)   NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED, a company incorporated
      under the laws of the Cayman Islands whose registered office is at Century
      Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand
      Cayman, British West Indies (the "Company"); and

(3)   The companies whose names are set out in Schedule 2 being subsidiaries of
      the Company (together the "SUBSIDIARIES").

BACKGROUND

(A)   It is proposed that 200,000,000 shares (subject to over-allotment option)
      of HK$0.01 each in the capital of the Company be offered for sale by way
      of a global offering (the "SHARE OFFER") on and subject to the terms and
      conditions set out in a prospectus proposed to be dated on or around 16
      April, 2004 (the "PROSPECTUS") and the Company has applied for listing of
      and permission to deal in the whole of its issued share capital on The
      Stock Exchange of Hong Kong Limited.

(B)   The Indemnifier has agreed to give certain indemnities in favour of the
      Company, for itself and as trustee for each of the Subsidiaries, subject
      to the terms and in accordance with the conditions set out in this Deed.

 THIS DEED WITNESSES AND IT IS AGREED as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   In this Deed, unless the context otherwise requires:

      "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
      banks in Hong Kong are open to the public for business;

      "COMPANIES" means the Company and the Subsidiaries;

      "HONG KONG" means the Hong Kong Special Administrative Region of the
      People's Republic of China;

      "PRC" means the People's Republic of China and, for the purposes of this
      Deed, excluding Hong Kong, Macau and Taiwan;

                                                                          Page 1

<PAGE>

      "MACAO" means the Macao Special Administrative Region of the People's
      Republic of China;

      a "RELEVANT TRANSFER" in relation to any person means a transfer made by
      that person of any property other than an interest limited to cease on his
      death or property which he transferred in a fiduciary capacity being a
      transfer made on or before the date on which the Share Offer becomes
      unconditional. A transfer made by a person of any property other than an
      interest limited to cease on his death, or property which he transferred
      in a fiduciary capacity, means a transaction of the kind described by the
      words "a transfer of any property other than an interest limited to cease
      on his death or property which he transferred in a fiduciary capacity" in
      section 35 of the Estate Duty Ordinance interpreted in accordance with the
      provisions contained in section 3 of the Estate Duty Ordinance;

      "RELIEF" includes any relief, allowance, set off or deduction in computing
      profits, right to repayment or credit granted by or pursuant to any
      legislation or otherwise relating to all forms of Taxation;

      "REPRESENTATIVE" means such one or more of the Companies as the
      Indemnifier shall reasonably consider appropriate to take such action as
      is provided in Clause 6;

      "TAXATION" means:

      (i)   any liability to any form of taxation whenever created or imposed
            and whether of Hong Kong, the PRC, the Cayman Islands, Macau 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 Hong Kong, the PRC, the Cayman Islands, Macau
            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 taxation which is the subject of the
            indemnity given by the Indemnifier pursuant to Clause 3.1 or Clause
            4.1 to the extent that the same is/are payable or suffered by the
            Companies or any of them;

      "TAXATION CLAIM" includes any claim, counterclaim, assessment, notice,
      demand or other documents issued or action taken by or on behalf of the
      Inland Revenue Department or any equivalent authority of Hong Kong, the
      PRC, the

                                                                         Page 2

<PAGE>

      Cayman Islands, Macau or any other statutory or governmental authority
      whatsoever in Hong Kong, the PRC, the Cayman Islands, Macau or any other
      part of the world from which it appears that the Companies or any of them
      is/are liable or is/are sought to be made liable for any payment of any
      form of Taxation or to be deprived of any Relief, which Relief would, but
      for the Taxation Claim, have been available to the Companies or any of
      them; and

      "HK$" means Hong Kong dollars.

1.2   CONSTRUCTION OF REFERENCES

In this Deed, unless the context requires otherwise:

      (a)   any reference to a Clause or Schedule is a reference to a Clause of
            or the Schedules to this Deed;

      (b)   any reference to a person includes an individual, a body corporate,
            a partnership, any other unincorporated body or association of
            persons and any state or state agency;

      (c)   references to provisions of the Estate Duty Ordinance or the Inland
            Revenue Ordinance are references to the Estate Duty Ordinance and
            Inland Revenue Ordinance respectively of Hong Kong as in force at
            the date of this Deed but in the event of any repeal or amendment of
            such provisions such references shall be read as including any
            provisions to the like effect respectively replacing or amending the
            same, and "ESTATE DUTY" means Hong Kong estate duty; and

      (d)   in the event of any loss, reduction, modification, cancellation or
            deprivation of Relief, there shall be treated as an amount of
            Taxation for which a liability has arisen the amount of such Relief,
            applying the relevant rates of taxation in force in the period or
            periods in respect of which Relief would have applied or (where the
            rate has at the relevant time not been fixed) the last known rate
            and assuming that the Companies or any of them (as the case may be)
            had sufficient profits or gains against which Relief might be set or
            given.

1.3   INTERPRETATION

      In this Deed, unless the context otherwise requires:

(a)   words importing the plural include the singular and vice versa;

(b)   words importing a gender include every gender; and

(c)   the words "OTHER", "INCLUDING" and "IN PARTICULAR" do not limit the
      generality of any preceding words and are not to be construed as being
      limited to the same class as the preceding words where a wider

                                                                          Page 3

<PAGE>

            construction is possible.

1.4   HEADINGS AND CONTENTS

      The headings and the tables of contents in this Deed do not affect its
      interpretation.

1.5   SCHEDULE

      This Deed includes its Schedule.

2. CONDITIONS

      This Deed is conditional on the conditions set out in the section headed
      "Structure and Conditions of the Global Offering" in the Prospectus being
      fulfilled. If such conditions are not fulfilled as mentioned in the
      section headed "Structure and Conditions of the Global Offering" in the
      Prospectus, this Deed shall become null and void and cease to have effect.

3.    ESTATE DUTY INDEMNITY

3.1   The Indemnifier shall indemnify and at all times keep each of the
      Companies fully and effectively indemnified from and against any depletion
      in or reduction in value of its respective assets as a consequence of, and
      in respect of any amount which any of the Companies may hereafter become
      liable to pay, being:

      (a)   any duty which is or hereafter becomes payable by the Companies or
            any of them by virtue of section 35 of the Estate Duty Ordinance
            under the provisions of section 43 of the Estate Duty Ordinance by
            reason of the death of any person and by reason of the assets of the
            Companies or any of them being deemed for the purpose of estate duty
            to be included in the property passing on his or her death by reason
            of that person making or having made a relevant transfer to the
            Companies or any of them;

      (b)   any amount recovered against the Companies or any of them under the
            provisions of section 43(7) of the Estate Duty Ordinance in respect
            of any duty payable under section 43(one)(c) or 43(6) of the Estate
            Duty Ordinance by reason of the death of any person and by reason of
            the assets of the Companies or any of them being deemed for the
            purpose of estate duty to be included in the property passing on his
            death by reason of that person making or having made a relevant
            transfer to the Companies or any of them;

      (c)   any amount of duty which the Companies or any of them is obliged to
            pay by virtue of section 43(one)(c) of the Estate Duty Ordinance in
            respect of the death of any person in any case where the assets of
            another company are deemed for the purpose of estate duty to be

                                                                          Page 4

<PAGE>

            included in the property passing on that person's death by reason of
            that person making or having made a relevant transfer to that other
            company and by reason of the Companies or any of them having
            received any distributed assets of that other company on their
            distribution within the meaning of the Estate Duty Ordinance, but
            only to the extent to which the Companies or any of them is unable
            to recover an amount or amounts in respect of that duty from any
            other person under the provisions of section 43(7)(a) of the Estate
            Duty Ordinance; and

      (d)   all costs (including all legal costs), expenses, interests,
            penalties, fines, charges or other liabilities which any of the
            Companies may properly incur in connection with:

            (i)   the investigation, assessment or the contesting of any claim
                  under Clause 3.1 (a) to (c);

            (ii)  the settlement of any claim under Clause 3.1 (a) to (c);

            (iii) any legal proceedings in which any of the Companies claim
                  under or in respect of Clause 3.1 (a) to (c) and in which
                  judgment is given for any of the Companies; or

            (iv)  the enforcement of any such settlement or judgments.

3.2   Notwithstanding any other provision of this Deed, the Indemnifier will not
      be liable for any penalty imposed on the Companies or any of them under
      section 42 of the Estate Duty Ordinance by reason of the relevant company
      defaulting in any obligation to give information to the Commissioner under
      section 42(1) of the Estate Duty Ordinance (provided that any such
      obligations on the part of the Companies or any of them to give
      information do not go beyond the extent of the actual knowledge of the
      relevant company), but the Indemnifier shall be liable for any interest on
      unpaid estate duty.

4.    TAXATION INDEMNITY

4.1   The Indemnifier shall indemnify and at all times keep each of the
      Companies fully and effectively indemnified against:

      (a)   Taxation falling on any of the Companies resulting from or by
            reference to any income, profits or gains earned, accrued or
            received (or deemed to be so earned, accrued or received) on or
            before the date on which this Deed becomes unconditional or any
            transactions, matters, things, event, act or omission occurring or
            deemed to occur on or before such date, whether alone or in
            conjunction with any other transaction, matter, thing, event, act,
            omission or circumstance whenever occurring, and whether or not such
            Taxation is chargeable against or attributable to any other person,
            firm or company;

                                                                          Page 5

<PAGE>

      (b)   all costs (including all legal costs), expenses, interests,
            penalties, fines, charges or other liabilities which any of the
            Companies may properly incur in connection with:

            (i)   the investigation, assessment or the contesting of any claim
                  under Clause 4.1(a);

            (ii)  the settlement of any claim under Clause 4. l(a);

            (iii) any legal proceedings in which any of the Companies claim
                  under or in respect of Clause 4.1 (a), and in which judgment
                  is given for any of the Companies; or

            (iv)  the enforcement of any such settlement or judgments.

4.2   Clause 4.1 (a) does not cover, and the Indemnifier shall be under no
      liability in respect of, Taxation:

      (a)   to the extent that provision has been made for such Taxation in the
            audited accounts of the Companies or any of them for an accounting
            period ended on or before 31 December, 2003;

      (b)   falling on any of the Companies in respect of any accounting period
            commencing on or after 1 January, 2004 unless liability for such
            Taxation would not have arisen but for some act or omission of, or
            transaction entered into by, the Indemnifier, the Companies or any
            of them (whether alone or in conjunction with some other act,
            omission or transaction, whenever occurring), otherwise than in the
            ordinary course of business, or in the ordinary course of acquiring
            or disposing of capital assets, on or before the date on which this
            Deed becomes unconditional;

      (c)   to the extent that such Taxation arises or is incurred as a
            consequence of any change in the law, rules or regulations, or the
            interpretation or practice thereof by the Inland Revenue Department
            or any other statutory or governmental authority (in Hong Kong, the
            PRC, the Cayman Islands, Macau or elsewhere) having retrospective
            effect coming into force after the date on which this Deed becomes
            unconditional or to the extent that such Taxation arises or is
            increased by an increase in rates of Taxation after the date on
            which this Deed becomes unconditional with retrospective effect
            (except the imposition of or an increase in the rate of Hong Kong
            profits tax or any tax of the PRC, the Cayman Islands, Macau or
            anywhere else in the world on the profits of companies for the
            current or any earlier financial period);

      (d)   to the extent that such Taxation is discharged by another person who
            is not any of the Companies and that none of the Companies is
            required

                                                                          Page 6

<PAGE>

            to reimburse such person in respect of the discharge of the
            Taxation; or

      (e)   to the extent of any provision or reserve made for Taxation in the
            audited accounts referred to in Clause 4.2(a) which is finally
            established to be an over-provision or an excessive reserve,
            provided that the amount of any such provision or reserve applied to
            reduce the liability of the Indemnifier or any of them in respect of
            Taxation shall not be available in respect of any such liability
            arising thereafter.

  5.       PAYMENT

5.1   All payments made by the Indemnifier under this Deed shall be made gross,
      free of any rights of counterclaim or set-off and without any deductions
      or withholdings of any nature. In the event that any deductions or
      withholdings are required by law, or that any payments made by or due from
      the Indemnifier under this Deed are liable for Taxation or the subject of
      a Taxation Claim (in the hands of or against the Companies or any of them
      or otherwise) then the Indemnifier will be liable to pay to the Companies
      or that one of the Companies to whom the payments are made or due (by
      virtue of Clauses 3 or 4 above) such further sums as will ensure that the
      aggregate of the sums paid or payable under this Clause and Clauses 3 or 4
      shall, after making all deductions or withholdings from, or deducting
      liabilities to Taxation or the amount of any Taxation Claims in respect
      of, such sums, leave the Companies or the relevant one of the Companies
      with the same amount as it would have been entitled to receive under
      Clauses 3 or 4 in the absence of any such deductions or withholdings,
      Taxation or Taxation Claims.

5.2   Any payments due by the Indemnifier under this Deed shall be increased to
      include such interest on unpaid tax as the Companies or any of them shall
      have been required to pay pursuant to section 71(5) or section 7l(5A) of
      the Inland Revenue Ordinance or similar legislation elsewhere or
      otherwise.

6.    CONDUCT OF CLAIMS

      In the event of any of the Companies becoming aware of any Taxation Claim,
      the Company or the relevant Companies shall by way of covenant, but not as
      a condition precedent to the liability of the Indemnifier hereunder, give
      or procure that notice thereof is as soon as reasonably practicable given
      to the Indemnifier in the manner provided in Clause 10. As regards any
      Taxation Claim the Representative shall, at the request of the
      Indemnifier, take such action as the Indemnifier may reasonably request by
      notice to the Representative (provided that the Indemnifier make such
      request within a reasonable time of receipt by the Indemnifier of the
      Company's notice) to cause the Taxation Claim to be withdrawn, or to
      dispute, resist, appeal against, compromise or defend the Taxation Claim
      and any determination in respect thereof, but subject to the
      Representative being indemnified and secured to its or their reasonable
      satisfaction by the Indemnifier against all losses (including additional
      taxation), costs, damages and expenses which may be thereby

                                                                          Page 7

<PAGE>

      incurred, provided that the Indemnifier shall not make any settlement of
      the Taxation Claim nor agree any matter in the course of disputing any
      Taxation Claim likely to affect the amount thereof or the future taxation
      liability of the Companies or any of them without the prior written
      approval of the Company (such approval not to be unreasonably withheld or
      delayed).

7.    REPAYMENTS AND REFUNDS

      If after the Indemnifier has made any payment pursuant to Clause 4 or
      Clause 5, any of the Companies shall receive a refund of all or part of
      the relevant Taxation (whether pursuant to section 79 of the Inland
      Revenue Ordinance or similar legislation elsewhere or otherwise) the
      Company (if it shall receive such refund) shall repay or (if another of
      the Companies shall receive such refund) shall procure repayment by such
      other of the Companies to the Indemnifier a sum corresponding to the
      amount of such refund less:

      (a)   any expenses, costs and charges properly incurred by the Companies
            or any of them in recovering such refund; and

      (b)   the amount of any additional Taxation which shall not have been
            taken into account in calculating any other payment made or to be
            made under this Clause but which is suffered by any of the Companies
            in consequence of such refund.

8.    SUCCESSORS AND ASSIGNS

8.1   This Deed shall bind the successors of the Indemnifier and shall enure for
      the benefit of each party's successors or permitted assigns.

8.2   The whole or any part of the benefit of this Deed may be assigned by the
      Companies or any of them, but not by the Indemnifier.

9.    RIGHTS AND REMEDIES

9.1   In the event that any payment is required or due to be made hereunder by
      the Indemnifier and is not made within 14 days following such payment
      falling due, the Company shall be entitled in respect of all and any
      dividends payable thereafter to the Indemnifier to set the same aside and
      place them in a separate account in trust for the benefit of that one or
      more of the Companies to whom the relevant payment under this Deed is due.
      Any sums transferred to such account shall thereafter be paid to such one
      or more of the Companies as is due the relevant payment under this Deed
      unless such payment under this Deed is the subject of a bona fide dispute
      with the relevant taxation authorities, in which event it shall be held in
      escrow on such terms as shall then be agreed between the parties until
      such dispute is resolved.

9.2   No delay or omission by any of the Companies in exercising any right,
      power or privilege hereunder shall impair such right, power or privilege
      or be

                                                                          Page 8

<PAGE>

      construed as a waiver thereof, and any single or partial exercise of any
      such right, power or privilege shall not preclude the further exercise of
      any right, power or privilege. The rights and remedies of the Companies or
      any of them provided in this Deed are cumulative and not exclusive of any
      rights and remedies provided by law.

9.3   In the event that any claim subject to the indemnities hereunder is or has
      been discharged by the Companies or any of them, the indemnities given
      hereunder shall take effect as covenants by the Indemnifier forthwith to
      reimburse the Companies or such of them as have so discharged the claim
      for any loss or payment so discharged.

10.   NOTICES

10.1  Any notice, request or other communication given or made under or in
      connection with the matters contemplated by this Deed shall be in writing
      and in English.

10.2  Any such notice or other communication shall be addressed as provided in
      Clause 10.3 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, three days after the date of posting; and

      (c)   if sent by facsimile, upon receipt of transmission being received by
            the sender.

10.3  The relevant address, facsimile number and contact person of each party
      hereto for the purposes of this Deed, subject to Clause 10.4 are:

      TO the Indemnifier:

      Nam Tai Electronics Inc.

      Fax: (852) 22631223
      Attn: Mr. Koo Ming Kown

      To the Company/Companies:

      Nam Tai Electronic & Electrical Products Limited

      Fax: (852) 22631223
      Attn: Ms. Wong Kuen Ling

10.4  A party may notify the other party to this Deed of a change to its
      relevant

                                                                          Page 9

<PAGE>

      address, facsimile number or contact person for the purposes of Clause
      10.3 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 7 days
            after the date on which notice is given, the date falling 7 days
            after notice of any such change has been given.

11.   MISCELLANEOUS

11.1  The Company shall bear the legal and professional fees, costs and expenses
      incurred in relation to the negotiation and preparation of this Deed.

11.2  The Indemnifier undertakes to each of the Companies that it will on demand
      do all such acts and things and execute all such deeds and documents as
      may be necessary to carry into effect or to give legal effect to the
      provisions of this Deed and the transaction hereby contemplated.

11.3  This Deed sets forth the entire agreement and understanding between the
      parties or any of them in relation to the subject matter of this Deed and
      supersedes and cancels in all respects all previous agreements, letters of
      intent, correspondence, understandings, agreements and undertakings (if
      any) between the parties hereto with respect to the subject matter hereof,
      whether such be written or oral.

11.4  This Deed may be executed in any number of counterparts and by different
      parties on separate counterparts, each of which is an original, but
      together, they constitute one and the same Deed.

11.5  This Deed is governed by and will be construed in accordance with Hong
      Kong law. The parties submit to the non-exclusive jurisdiction of the Hong
      Kong courts and each party waives any objection to proceedings in Hong
      Kong on the grounds of venue or inconvenient forum.

11.6  Time shall be of the essence as regards any date or period mentioned in
      this Deed or any date or period substituted for the same by the agreement
      of the parties or otherwise.

11.7  The Indemnifier hereby irrevocably appoints Mr. Jackie Wah of 15th Floor,
      China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central,
      Hong Kong to receive, for and on its behalf, service of process in any
      proceedings in Hong Kong. Such service shall be deemed completed on
      delivery to the process agent (whether or not it is forwarded to and
      received by the Indemnifier). If for any reason the process agent ceases
      to be able to act as such or no longer has an address in Hong Kong, the
      Indemnifier irrevocably agrees to appoint forthwith a substitute process
      agent acceptable to the Company, and to deliver to the Company

                                                                         Page 10

<PAGE>

      a copy of the new agent's acceptance of that appointment, within 7 days of
      such appointment.

11.6  The sendee of any process connected with proceedings in the Hong Kong
      courts and relating to this Deed will be deemed to have been validly
      served on a party if they are served on the process agent whose name and
      present address are set out below against the name of that party, and
      service will be deemed to have been acknowledged by that party if it is
      acknowledged by that process agent:

      Party                      Process Agent

      Indemnifier                Mr. Jackie Wah of 15th Floor, China Merchants
                                 Tower, Shun Tak Centre, 168-200 Connaught Road
                                 Central, Hong Kong

      Company                    Ms. Wong Kuen Ling of 15th Floor, China
                                 Merchants Tower, Shun Tak Centre, 168-200
                                 Connaught Road Central, Hong Kong

                                                                         Page 11

<PAGE>

                                 SCHEDULE

                                 SUBSIDIARIES

Name                             Place of Incorporation
Namtai Electronic (Shenzhen)     the PRC
Company Limited

Nam Tai Investments Consultant   Macau
(Macao Commercial Offshore)
Company Limited

                                                                         Page 12
<PAGE>

EXECUTED as a deed by the parties on the date first above written.

SEALED with the COMMON SEAL of                 )
NAME TAI ELECTONICS INC.                       )
and SIGNED by /s/ Li Shi Yuen. Joseph          ) /s/ Li Shi Yuen. Joseph [SEAL]

in the presence of:                            )

                      Tammie Mei Fung Tam
                      Johnson Stokes & Master
                      Solicitor, Hong Kong SAR

SEALED with the COMMON SEAL of                 )
NAME TAI ELECTRONICS & ELECTRICAL              )
PRODUCTS LIMITED                               )
and SIGNED by /s/ Li Shi Yuen. Joseph          ) /s/ Li Shi Yuen. Joseph [SEAL]

in the presence of:                            )
                                               )

                      Tammie Mei Fung Tam
                      Johnson Stokes & Master
                      Solitor, Hong Kong SAR<PAGE>

                                                                    EXHIBIT 4.13

                               Dated 15 April 2004

                NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED

                                       and

                            NAM TAI ELECTRONICS, INC.

                                       and

                             THE EXECUTIVE DIRECTORS
                              (AS DEFINED HEREIN)

                                       and

                  THE HONGKONG AND SHANGHAI BANKING CORPORATION
                                     LIMITED

                                       and

                          THE PUBLIC OFFER UNDERWRITERS
                               (AS DEFINED HEREIN)

                       PUBLIC OFFER UNDERWRITING AGREEMENT

                      relating to a Public Offer consisting
initially of 20,000,000 Shares (subject to adjustment) of nominal value HK$0.01
                             each in the capital of
                Nam Tai Electronic & Electrical Products Limited

LINKLATERS

10th Floor, Alexandra House
Chater Road
Hong Kong

Telephone (852) 2842 4888
Facsimile (852) 2810 8133/2810 1695

Ref: L-065038-05-001/DWLT/KKLC

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                CONTENTS                            PAGE
<S>                                                                 <C>
 1   INTERPRETATION .............................................     2

 2   THE GLOBAL OFFERING ........................................    10

 3   THE PUBLIC OFFER ...........................................    14

 4   COSTS, EXPENSES, FEES AND COMMISSIONS ......................    21

 5   REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS ...............    23

 6   FURTHER UNDERTAKINGS .......................................    25

 7   INDEMNITY ..................................................    32

 8   CONTRIBUTION ...............................................    35

 9   TERMINATION IN EXCEPTIONAL CIRCUMSTANCES ...................    36

10   GENERAL PROVISIONS .........................................    38

SCHEDULE 1 The Public Offer Underwriters ........................    47

SCHEDULE 2 The Executive Directors ..............................    48

SCHEDULE 3 The Reorganisation Documents .........................    49

SCHEDULE 4 The Conditions Precedent Documents ...................    50

SCHEDULE 5 Advertising Arrangements .............................    52

SCHEDULE 6 Professional Investor Treatment Notice ...............    53

SCHEDULE 7 The Warranties .......................................    55

SIGNATURE PAGE ..................................................    75
</TABLE>

                                     - i -

<PAGE>

THIS AGREEMENT is made on 15 April 2004

BETWEEN:

(1)   NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED, a company incorporated
      under the laws of the Cayman Islands whose registered office is at Century
      Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand
      Cayman, British West Indies (the "COMPANY");

(2)   NAM TAI ELECTRONICS, INC., a company incorporated under the laws of
      British Virgin Islands whose registered office is at McW. Todman & Co.,
      McNamara Chambers, PO Box 3342, Road Town, Tortola, British Virgin Islands
      (the "SELLING SHAREHOLDER");

(3)   THE EXECUTIVE DIRECTORS (as hereinafter defined);

(4)   THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a company
      incorporated under the laws of Hong Kong whose registered office is at 1
      Queen's Road Central, Hong Kong ("HSBC"); and

(5)   THE PUBLIC OFFER UNDERWRITERS (as defined herein).

RECITALS:

(A)   The Company was incorporated in the Cayman Islands with limited liability
      on 9 June 2003 under the Companies Law and has submitted a valid
      application (together with all necessary supporting documents) to the
      Registrar of Companies in Hong Kong to be registered as an oversea company
      in Hong Kong under Part XI of the Companies Ordinance on 19 March 2004;

(B)   As at the date of this Agreement, the authorised share capital of the
      Company is HK$20,000,000 divided into 2,000,000,000 Shares, of which
      800,000,000 Shares have been allotted and issued and are fully paid or
      credited as fully paid;

(C)   As at the date of this Agreement, the Selling Shareholder is the legal and
      beneficial owner of 800,000,000 Shares representing 100% of the existing
      issued share capital of the Company;

(D)   The Selling Shareholder has agreed to offer for sale the Public Offer
      Shares pursuant to the Public Offer at the Offer Price (as defined
      herein);

(E)   The Company, the Selling Shareholder and the International Underwriters
      (as defined herein) are expected to enter into the International
      Underwriting Agreement (as defined herein) providing for the International
      Underwriters to purchase or procure the purchase of the International
      Placing Shares (as defined herein) on the terms and subject to the
      conditions set out therein;

(F)   The Selling Shareholder is expected to grant to HSBC, exercisable at the
      sole and absolute discretion of HSBC, the Over-allotment Option (as
      defined herein) to require the Selling Shareholder to sell up to an
      aggregate of 30,000,000 additional Shares, subject to and on the terms of
      the International Underwriting Agreement;

(G)   Immediately upon completion of the Global Offering (as defined herein) and
      assuming the Over-allotment Option (as defined herein) will not be
      exercised, the Selling Shareholder will own 600,000,000 Shares
      representing 75% of the existing issued share capital of the Company or,
      if the Over-allotment Option (as defined herein) expected to be granted is

                                       1
<PAGE>

      fully exercised, the Selling Sharehofder will own 570,000,000 Shares
      representing 71.25% of the existing issued share capital of the Company;

(H)   At a meeting of the board of Directors held on 8 April 2004, resolutions
      were passed pursuant to which, inter alia, Directors were authorised to
      agree and sign on behalf of the Company this Agreement and all the other
      relevant documents in connection with the Global Offering;

(I)   The Public Offer Underwriters have severally agreed to underwrite the
      Public Offer, on the terms and subject to the conditions set out herein;

(J)   The Executive Directors are the executive directors of the Company;

(K)   The Company has appointed HSBC to act as the sponsor in respect of the
      listing of the Share on the Stock Exchange;

(L)   The Selling Shareholder has appointed HSBC to act as the global
      coordinator, lead manager and bookrunner of the Global Offering;

(M)   The Selling Shareholder proposes to appoint HSBC to act as the Receiving
      Banker for the Public Offer;

(N)   The Company proposes to appoint Computershare Hong Kong Investor Services
      Limited to act as its Hong Kong branch share registrar and transfer
      office;

(O)   HSBC, on behalf of the Company, has submitted an application to the Stock
      Exchange for listing of and permission to deal in the Shares in issue and
      the Shares to be issued as described in the Prospectus; and

(P)   The Warrantors have agreed to give the representations, warranties and
      undertakings contained in this Agreement.

IT IS HEREBY AGREED as follows:

1     INTERPRETATION

1.1   DEFINITIONS

      in this Agreement (including the Recitals and the Schedules), the
      following expressions shall, unless defined otherwise or the context
      otherwise requires, have the following meanings:

      "ACCEPTANCE DATE"         the date on which the Application Lists close in
                                accordance with the provisions of Clause 3.1.2;

      "ACCEPTED PUBLIC OFFER    Public Offer Applications which have been
      APPLICATIONS"             accepted (whether in whole or in part)
                                pursuant to the provisions of Clause 3.1.3;

      "ACCOUNTS DATE"         31 December 2003;

                                       2
<PAGE>

"AFFILIATE"                   in relation to a particular company, any company
                              or other entity which is its holding company or
                              subsidiary, or any subsidiary of its holding
                              company or which directly or indirectly through
                              one or more intermediaries, controls or is
                              controlled by, or is under common control with,
                              the company specified. For the purposes of this
                              definition, the term "control" (including
                              the terms "controlling", "controlled by" and
                              "under common control with") means the possession,
                              direct or indirect, of the power to direct or
                              cause the direction of the management and policies
                              of a person, whether through the ownership of
                              voting securities, by contract, or otherwise;

"AGREEMENT AMONG PUBLIC       the agreement expected to be entered into on the
OFFER UNDERWRITERS"           date hereof between HSBC and the other Public
                              Offer Underwriters governing certain rights and
                              obligations as between the Public Offer
                              Underwriters in relation to the Public Offer;

"APPLICATION FORMS"           the application forms on which Public Offer
                               Appliations may be made, which are in agreed form
                              (as amended or supplemented pursuant to Clause 6.1
                              .1 (x));

"APPLICATION LISTS"           the application lists referred to in Clause 3.1.2;

"APPROVALS"                   includes all approvals, sanctions, orders,
                              franchises, clearances, declarations,
                              qualifications, licences, permits, certificates,
                              consents, permissions, authorisations, filings and
                              registrations and "APPROVAL" shall be construed
                              accordingly;

"ARTICLES OF ASSOCIATION"     the articles of association of the Company
                              conditionally adopted on 8 April 2004;

"BOARD"                       the board of directors of the Company;

"BROKERAGE"                   brokerage per Share of 1% of the Offer Price;

"BROKERAGE, FEE AND           the Brokerage, the Trading Fee, the Transaction
LEVIES"                       Levy and the Investor Compensation Levy;

"BUSINESS DAY"                a day that is not a Saturday, Sunday or public
                              holiday in Hong Kong;

"CCASS"                       the Central Clearing and Settlement System
                              established and operated by Hong Kong Securities
                              Clearing Company Limited;

"COMPANIES LAW"               the Companies Law, Cap. 22 (Law 3 of 1961, as
                              consolidated and revised) of the Cayman Islands;

"COMPANIES ORDINANCE"         the Companies Ordinance (Chapter 32 of the Laws of
                              Hong Kong) (as amended);

"CONDITIONS"                  the conditions set out in Clause 2.1.1;

"CONDITIONS PRECEDENT         the documents listed in Schedule 4;
DOCUMENTS"

                                       3
<PAGE>

"CONTINUING BUSINESSES"       the businesses carried out by the Group in the
                              three years ended 31 December 2003, except for the
                              Discontinued Businesses;

"DEED OF INDEMNITY"           the deed of indemnity dated 15 April 2004 provided
                              in connection with the Global Offering entered
                              into between the Selling Shareholder and the
                              Company;

"DIRECTORS"                   the directors of the Company whose names are set
                              out in the section headed "Directors, Senior
                              Management and Staff" in the Prospectus;

"DISCONTINUED                 the Group's discontinued businesses related to the
BUSINESSES"                   trading and manufacturing of essential components
                              and subassemblies for mobile phones in the three
                              years ended 31 December 2003;

"ENCUMBRANCE"                 any pledge, charge, lien, mortgage, security
                              interest, claim, pre-emption rights, equity
                              interest, third party rights or interests or
                              rights similar to the foregoing;

"EXECUTIVE DIRECTORS"         the executive directors of the Company whose names
                              and addresses are listed in Schedule 2;

"FINAL OFFERING CIRCULAR"     the final offering circular expected to be issued
                              by the Company in connection with the
                              International Placing (as amended or supplemented
                              pursuant to Clause 6.1.1 (x));

"FORCE MAJEURE EXPIRY         the Listing Date;
DATE"

"FORMAL NOTICE"               the formal notice to be published in connection
                              with the Public Offer, which is in agreed form (as
                              amended or supplemented pursuant to Clause 6.1.1
                              (x));

"GLOBAL OFFERING"             the Public Offer and the International Placing;

"GOVERNMENTAL AUTHORITY"      any public, regulatory, taxing, administrative or
                              governmental, agency or authority (including,
                              without limitation, the Stock Exchange and the
                              SFC), other authority and any court at the
                              national, provincial, municipal or local level;

"GROUP"                       the Company, NTSZ and NTIC or, where the context
                              so requires, in respect of the period before the
                              Reorganisation is completed, the Continuing
                              Businesses operated by NTSZ and the businesses
                              operated by NTIC and the sales co-ordination and
                              marketing activities operated by NTEEPHK;

"HK DOLLAR" AND "HK$"         Hong Kong dollar, the lawful currency of Hong
                              Kong;

"HOLDING COMPANY"             has the meaning ascribed thereto in section 2 of
                              the Companies Ordinance;

"HONG KONG"                   the Hong Kong Special Administrative Region of the
                              PRC;

"INDEMNIFIED PARTY"           has the meaning ascribed thereto in Clause 7.1;

                                       4
<PAGE>

"INDEMNIFYING PARTY"          has the meaning ascribed thereto in Clause 7.1;

"INTERNATIONAL PLACING"       the conditional placing of the International
                              Placing Shares on and subject to the terms of the
                              Placing Documents and the International
                              Underwriting Agreement;

"INTERNATIONAL PLACING        the 180,000,000 Shares initially to be offered for
SHARES"                       sale by the Selling Shareholder and placed under
                              the International Placing, subject to adjustment
                              as provided in the International Underwriting
                              Agreement;

"INTERNATIONAL PLACING        the underwriters identified in the International
UNDERWRITERS"                 Underwriting Agreement as being the several
                              underwriters of the International Placing;

"INTERNATIONAL                an international underwriting agreement expected
UNDERWRITING AGREEMENT"       to be entered into on the Price Determination Date
                              among the Company, the Selling Shareholder, the
                              Executive Directors, HSBC and the International
                              Placing Underwriters in substantially agreed form;

"INVESTOR COMPENSATION        SFC investor compensation levy per Share of 0.002%
LEVY"                         of the Offer Price;

"LAWS"                        include all laws, rules, statutes, ordinances,
                              regulations, guidelines, opinions, notices,
                              circulars, orders, judgements, decrees or rulings
                              of any Governmental Authority and "LAW" includes
                              any one of them;

"LISTING COMMITTEE"           the listing committee of the Stock Exchange;

"LISTING DATE"                the day on which dealings in the Shares commence
                              on the Stock Exchange;

"LISTING RULES"               the Rules Governing the Listing of Securities on
                              The Stock Exchange of Hong Kong Limited;

"MACAO"                       the Macao Special Administrative Region of the
                              PRC;

"NOMINEE"                     HSBC Nominees (Hong Kong) Limited;

"NTEEPHK"                     Nam Tai Electronic & Electrical Products Limited,
                              a company incorporated under the laws of Hong
                              Kong;

"NTIC"                        Nam Tai Investments Consultant (Macao Commercial
                              Offshore) Company Limited, a company incorporated
                              in Macao and wholly owned by the Company;

"NTSZ"                        Name in Chinese (Namtai Electronic (Shenzhen)
                              Company Limited), a wholly foreign owned
                              enterprise established under the laws of the PRC
                              and wholly owned by the Company;

"OFFER DOCUMENTS"             the Public Offer Documents and the Placing
                              Documents;

                                       5
<PAGE>

"OFFER PRICE"                 the final Hong Kong dollar price per Offer Share
                              (exclusive of the Brokerage, Fee and Levies) at
                              which the Public Offer Shares are to be offered as
                              determined in accordance with the provisions of
                              Clause 2.5;

"OFFER SHARES"                the Public Offer Shares and the International
                              Placing Shares;

"OPERATIVE DOCUMENTS"         the Reorganisation Documents, the Deed of
                              Indemnity, the Price Determination Agreement, the
                              Receiving Banker Agreement, the Registrars
                              Agreement and the Sub-Registrars Agreement;

"OVER-ALLOTMENT OPTION"       the option expected to be granted by the Selling
                              Shareholder to HSBC, exercisable by HSBC, to
                              require the Selling Shareholder to sell up to an
                              aggregate of 30,000,000 additional Shares pursuant
                              to the international Underwriting Agreement;

"OVER-ALLOTMENT SHARES"       the additional Shares which the Selling
                              Shareholder may be required to sell at the Offer
                              Price pursuant to the Over-allotment Option;

"PENSION SCHEMES"             the provident fund, retirement and welfare fund
                              schemes of members of the Group as described in
                              the section headed "Directors, Senior Management
                              and Staff" of the Prospectus;

"PLACING DOCUMENTS"           the Preliminary Offering Circular and the Final
                              Offering Circular;

"PRC"                         the People's Republic of China (which shall for
                              the purposes of this Agreement, unless otherwise
                              indicated, exclude Hong Kong, Macao and Taiwan);

"PRE-IPO SHARE OPTION         the share option scheme adopted by the sole
SCHEME"                       shareholder of the Company by way of written
                              resolution dated 22 March 2004, the principal
                              terms of which are summarised in the paragraph
                              headed "Pre-IPO Share Option Scheme" in Appendix V
                              of the Prospectus;

"PRELIMINARY OFFERING         the preliminary offering circular dated 12 April
CIRCULAR"                     2004 and prepared in respect of the International
                              Placing and circulated to the Public Offer
                              Underwriters (as amended or supplemented pursuant
                              to Clause 6.1.1 (x));

"PRICE DETERMINATION          the agreement expected to be entered into on the
AGREEMENT"                    Price Determination Date between the Company, the
                              Selling Shareholder and HSBC (on behalf of the
                              Public Offer Underwriters) to record their
                              agreement of the Offer Price;

"PRICE DETERMINATION          means the date on which the Offer Price is fixed
DATE"                         for the  purposes of the Public Offer in
                              accordance with the Public Offer Documents and
                              Clause 2.5;

"PROFESSIONAL INVESTOR        the notice from HSBC in the form set out in
TREATMENT NOTICE"             Schedule 6;

                                       6
<PAGE>

"PROPERTY VALUERS"            LCH (Asia-Pacific) Surveyors Limited;

"PROSPECTUS"                  the prospectus to be issued by the Company in
                              connection with the Public Offer (as amended or
                              supplemented pursuant to Clause 6.1.1(x));

"PROSPECTUS DATE"             the date of issue of the Prospectus, which is
                              intended to be on or about 16 April 2004;

"PUBLIC OFFER"                the offer of the Public Offer Shares for sale on
                              and subject to the terms and conditions set out in
                              the Public Offer Documents;

"PUBLIC OFFER                 valid applications for Public Offer Shares made on
APPLICATIONS"                 Application Forms (including, without limitation
                              and for the avoidance of doubt, applications made
                              on white Application Forms by HKSCC Nominees
                              Limited on behalf of applicants who have given
                              electronic application instructions) and
                              accompanied by cheques or cashier's orders for the
                              full amount payable on application which are
                              honoured on first (or, at HSBC's option,
                              subsequent) presentation and otherwise in
                              compliance with the terms of the Public Offer
                              Documents;

"PUBLIC OFFER APPLICATION     application moneys received in respect of Public
MONEYS"                       Offer Applications;

"PUBLIC OFFER DOCUMENTS"      the Prospectus and the Application Forms;

"PUBLIC OFFER SHARES"         the 20,000,000 Shares initially being offered for
                              sale by the Selling Shareholder pursuant to the
                              Public Offer, as adjusted in accordance with
                              Clauses 2.3 and 2.4;

"PUBLIC OFFER OVER-           a situation where the aggregate number of Public
SUBSCRIPTION"                 Offer Shares being applied for under Public
                              Offer Applications is greater in number than the
                              aggregate number of the initial Public Offer
                              Shares;

"PUBLIC OFFER UNDER-          has the meaning attributed thereto in Clause
SUBSCRIPTION"                 3.4.2;

"PUBLIC OFFER                 the underwriters whose names and addresses are
UNDERWRITERS"                 listed in Schedule 1, being the several
                              underwriters of the Public Offer;

"PUBLIC OFFER UNDERWRITING    in relation to a Public Offer Underwriter, the
COMMITMENT"                   maximum number of Public Offer Shares the
                              application for which such Public Offer
                              Underwriter has agreed to underwrite pursuant to
                              the terms of this Agreement, as calculated by
                              applying the percentages set out in Clause
                              3.4.2(a) to the number of initial Public Offer
                              Shares, subject to adjustment as set out in Clause
                              2.4;

                                       7
<PAGE>

"RECEIVING BANKER"            HSBC, in its capacity as the bank appointed to
                              hold the application monies received in connection
                              with the Public Offer pursuant to the Receiving
                              Banker Agreement;

"RECEIVING BANKER             the agreement to be entered into by the Selling
AGREEMENT"                    Shareholder, the Nominee, HSBC, which is in the
                              agreed form;

"REFERENCE PUBLIC OFFER       the amount obtained by A x (B - C) where A = the
AMOUNT"                       Offer Price, B = the initial number of Public
                              Offer Shares, C = the number of unsubscribed
                              Public Offer Shares which are reallocated to the
                              International Placing in accordance with Clause
                              2.4;

"REGISTRARS"                  Bank of Butterfield International (Cayman) Ltd.,
                              being the principal share registrar of the
                              Company;

"REGISTRARS AGREEMENT"        the registrars and transfer agent agreement to be
                              entered into between the Company and the
                              Registrars in agreed form;

"RELEVANT PUBLIC OFFER        in relation to any Public Offer Underwriter, a
APPLICATION"                  Public Offer Application made or procured to be
                              made by such Public Offer Underwriter, the number
                              of Public Offer Shares comprised in which is
                              applied to reduce the Public Offer Underwriting
                              Commitment of such Public Offer Underwriter
                              pursuant to the provisions of Clause 3.4.1 ;

"REORGANISATION"              the corporate reorganisation of the Group in
                              preparation for the listing of the Shares on the
                              Stock Exchange as defined and described in the
                              Prospectus;

"REORGANISATION               the documents referred to in Schedule 3;
DOCUMENTS"

"REPORTING ACCOUNTANTS"       Deloitte Touche Tohmatsu;

"SFC"                         the Securities and Futures Commission of Hong
                              Kong;

"SHARE OPTION SCHEME"         the share option scheme conditionally adopted by
                              the sole shareholder of the Company at an
                              extraordinary general meeting held on 8 April
                              2004, the principal terms of which are summarised
                              in the paragraph headed "Share Option Scheme" in
                              Appendix V of the Prospectus;

"SHARE(S)"                    ordinary shares of nominal value HK$0.01 each in
                              the share capital of the Company;

"STOCK EXCHANGE"              The Stock Exchange of Hong Kong Limited;

"SUB-REGISTRARS"              Computershare Hong Kong Investor Services Limited,
                              being the Hong Kong branch share registrar of the
                              Company;

"SUB-REGISTRARS               the branch registrar agreement to be entered into
AGREEMENT"                    between the Company and the Sub-Registrars, which
                              is in agreed form;

                                       8
<PAGE>

      "SUBSIDIARIES"           the Subsidiaries of the Company named in the
                               accountants' report, the text of which is set out
                               in Appendix 1 to the Prospectus, and "SUBSIDIARY"
                               means any or a specific one of them;

      "SUBSIDIARIES"           has the meaning ascribed thereto in the Companies
                               Ordinance;

      "TRADING FEE"            Stock Exchange trading fee per Share of 0.005% of
                               the Offer Price;

      "TRANSACTION"            any transaction, act, event, omission or
                               circumstance existing of whatever nature;

      "TRANSACTION LEVY"       SFC transaction levy per Share of 0.005% of the
                               Offer Price;

      "UNDERWRITERS"           the Public Offer Underwriters and the
                               International Placing Underwriters;

      "UNDERWRITING DOCUMENTS" this Agreement, the Price Determination Agreement
                               and the International Underwriting Agreement;

      "US" AND "UNITED STATES" the United States of America, its territories,
                               its possessions, any State of the United States
                               and the District of Columbia;

      "US SECURITIES ACT"      the United States Securities Act of 1933 (as
                               amended or supplemented);

      "VERIFICATION NOTES"     the verification notes dated 15 April 2004
                               prepared by Linklaters in connection with the
                               verification of the Prospectus;

      "WARRANTIES"             the representations, warranties, agreements and
                               undertakings to be given by the Warrantors in
                               Schedule 7; and

      "WARRANTORS"             the Company and the Selling Shareholder.

1.2   OTHER INTERPRETATION

      In this Agreement, unless otherwise specified:

      1.2.1 references to "RECITALS", "SECTIONS", "CLAUSES", "PARAGRAPHS" and
            "SCHEDULES" are to recitals, sections, clauses, paragraphs of and
            schedules to this Agreement;

      1.2.2 a reference to any statute or statutory provision shall be construed
            as a reference to the same as it may have been, or may from time to
            time be, amended, modified or re-enacted;

      1.2.3 references to a "COMPANY" shall be construed so as to include any
            company, corporation or other body corporate, whenever and however
            incorporated or established;

      1.2.4 references to a "PERSON" shall be construed so as to include any
            individual, firm, company, government, state or agency of a state or
            any joint venture, association or (whether or not
            having separate legal personality);

                                       9
<PAGE>

     1.2.5  references to writing shall include any modes of reproducing words
            in a legible and non-transitory form;

     1.2.6  references to times of the day are, unless otherwise specified, to
            Hong Kong time;

     1.2.7  headings to Clauses, sections and Schedules are for convenience only
            and do not affect the interpretation of this Agreement;

     1.2.8  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;

     1.2.9  references to documents being "IN AGREED FORM" are to the form of
            the draft or final or executed version thereof signed for
            identification by or on behalf of the Company and HSBC with such
            alterations as may be agreed between the Company and HSBC but such
            documents in agreed form do not form part of this Agreement;

     1.2.10 references to "best knowledge, information, belief and/or
            awareness" of any person or similar terms shall be treated as
            including but not limited to any knowledge, information, belief and
            awareness which the person would have had if such person had made
            due and careful enquiries; and

     1.2.11 words in the singular shall include the plural (and vice versa) and
            words importing one gender shall include the other two genders.

2     THE GLOBAL OFFERING

2.1   CONDITIONS PRECEDENT

      2.1.1 OBLIGATIONS CONDITIONAL

            The obligations of the Public Offer Underwriters under this
            Agreement are conditional upon:

            (i)   HSBC, on behalf of the Public Offer Underwriters, receiving
                  from the Company and the Selling Shareholder (as the case may
                  be) the Conditions Precedent Documents not later than 6:00
                  p.m. on the Business Day before the Prospectus Date;

            (ii)  the Registrar of Companies in Hong Kong registering one copy
                  of the Prospectus certified by two Directors (or by their
                  agents duly authorised in writing) as having been approved by
                  resolution of the Board and having endorsed thereon or
                  attached thereto all necessary consents and other documents as
                  required by the provisions of section 342C of the Companies
                  Ordinance not later than the Business Day before the
                  Prospectus Date;

            (iii) the Listing Committee granting listing of and permission to
                  deal in the Shares in issue and to be issued pursuant to the
                  Pre-IPO Share Option Scheme and the Share Option Scheme
                  (subject only to despatch of the share certificates in respect
                  thereof and such other normal conditions acceptable to the
                  Company and HSBC, on behalf of the Underwriters) not later
                  than 16 May 2004 and such listing and permission not
                  subsequently having been revoked prior to the commencement of
                  dealings in the Shares on the Stock Exchange;

                                      10
<PAGE>

            (iv)  the Offer Price being duly determined as provided in Clause
                  2.5 and the Price Determination Agreement having been executed
                  by the Selling Shareholder and HSBC (on behalf of the Public
                  Offer Underwriters);

            (v)   the execution and delivery of the International Underwriting
                  Agreement on or before the Price Determination Date; and

            (vi)  the International Underwriting Agreement; to the extent that
                  it is subject to any specific conditions, becoming
                  unconditional in accordance with its terms (other than any
                  condition for the other Underwriting Documents to become
                  unconditional) and not having been terminated in accordance
                  with its terms or otherwise.

      2.1.2 UNDERTAKING BY THE COMPANY, THE SELLING SHAREHOLDER AND THE
            EXECUTIVE DIRECTORS

            Each of the Company, the Selling Shareholder and the Executive
            Directors undertakes to use its best endeavours to procure that the
            Conditions are fulfilled by the times and dates stated therein, and
            in particular shall furnish such information, supply such documents,
            pay such fees, give such undertakings and do all such acts and
            things as may be required by HSBC (on behalf of the Public Offer
            Underwriters), the Stock Exchange, the Registrar of Companies in
            Hong Kong, the SFC and any relevant Governmental Authority in
            connection with the application for the listing of and permission to
            deal in the Shares on the Stock Exchange or the fulfilment of the
            Conditions.

      2.1.3 HSBC'S WAIVER

            HSBC may, for itself and on behalf of the other Public Offer
            Underwriters, in its sole and absolute discretion, by giving notice
            to the Company and the other Public Offer Underwriters on or before
            the respective latest times on which the relevant Condition may be
            fulfilled:

            (i)   extend the deadline for the fulfilment of any or all
                  Conditions by such number of days and/or hours and/or in such
                  manner as HSBC may determine on behalf of the Public Offer
                  Underwriters but in any event no later than 16 May 2004; or

            (ii)  waive (conditionally or unconditionally) the Condition under
                  Clause 2.1.1(i) on behalf of the Public Offer Underwriters.

      2.1.4 TERMINATION

            If any of the Conditions is not fulfilled, or waived in accordance
            with Clause 2.1.3, this Agreement shall terminate with immediate
            effect except that the provisions of Clause 9.2 shall apply.

2.2   STABILIZATION

      2.2.1 HSBC is hereby appointed as stabilizing manager in connection with
            the Global Offering and may (but shall not be obliged) and not as
            agent for the Company or the Selling Shareholder, to the extent
            permitted by applicable Law of Hong Kong or elsewhere, over allocate
            or effect any other transactions (in the market or otherwise and
            whether in Hong Kong or elsewhere) with a view to supporting the
            market price of the Shares at a level higher than that which might
            otherwise prevail

                                      11
<PAGE>

            in the open market for a limited period after the commencement of
            trading in the Shares ("STABILIZING ACTION").

      2.2.2 HSBC may, in its sole and absolute discretion, appoint any of its
            Affiliates or any other person(s) to be its agent(s) for the
            purposes of taking any stabilizing action, with such authorities and
            rights as HSBC has pursuant to Clause 2.2.1.

      2.2.3 Stabilizing action, if taken, may be discontinued at any time.

      2.2.4 Any liability, expenses and any loss resulting from such stabilizing
            action shall be borne, and any profit arising from such stabilizing
            action shall be beneficially retained, by HSBC.

      2.2.5 Each of the Warrantors and the Public Offer Underwriters (other than
            HSBC) undertakes to the Public Offer Underwriters (including HSBC)
            that it will not take or cause or authorise any other person to
            take, and the Warrantors shall cause their respective affiliates,
            agents and/or subsidiaries not to take, directly or indirectly, any
            stabilizing action or any action which is designed to or which
            constitutes or which might be expected to cause or result in the
            stabilization or manipulation, in violation of applicable Laws, of
            the price of any security of the Company, provided that the granting
            of the Over-allotment Option under the International Underwriting
            Agreement shall not constitute a breach of this Clause 2.2.5.

2.3   CLAWBACK FROM INTERNATIONAL PLACING TO PUBLIC OFFER AND POOLS

      2.3.1 The aggregate number of the initial Public Offer Shares shall be
            increased in the following manner: if the number of Shares validly
            applied for in Accepted Public Offer Applications represents (i) 15
            times or more but less than 50 times (ii) 50 times or more but less
            than 100 times or (iii) 100 times or more, of the number of Shares
            initially available for purchase under the Public Offer, then Shares
            will be reallocated to the Public Offer from the International
            Placing, so that the total number of Shares available under the
            Public Offer will be increased to such number as represents
            approximately 30% (in the case of (i)) or 40% (in the case of (ii))
            or 50% (in the case of (iii)), respectively, of the number of Offer
            Shares initially available under the Global Offering (before taking
            into account any exercise of the Over-allotment Option).

      2.3.2 In the event of a reallocation of Offer Shares from the
            International Placing to the Public Offer pursuant to Clause 2.3.1,
            the relevant number of International Placing Shares shall be
            withdrawn from the International Placing and made available as
            additional Public Offer Shares offered for sale pursuant to the
            Public Offer, provided always that for the avoidance of doubt, any
            such reallocation shall have no effect on obligations of the Selling
            Shareholder to pay the commission due to the Public Offer
            Underwriters which shall be determined pursuant to Clause 4.1.

      2.3.3 The total number of Shares initially available under the Public
            Offer (after taking into account any reallocation pursuant to this
            Clause 2.3) shall be divided equally into two pools for allocation
            purposes: pool A and pool B. The Shares in pool A will be allocated
            by HSBC in its sole and absolute discretion on an equitable basis to
            applicants who have applied for Shares with a total amount of HK$5
            million (excluding the Brokerage, Fee and Levies payable) or less.
            The Shares in pool B will be allocated by HSBC in its sole and
            absolute discretion on an equitable basis to applicants who have
            applied for Shares with a total amount of more than HK$5

                                      12
<PAGE>

            million (excluding the Brokerage, Fee and Levies payable). HSBC
            shall in its sole and absolute discretion determine the allocation
            ratio for the two pools described above subject to the provisions
            relevant thereto set out in the section headed "Structure and
            Conditions of the Global Offering" in the Prospectus. Any Shares
            which are reallocated from the International Placing to the Public
            Offer pursuant to this Clause 2.3 shall, subject to the provisions
            of this paragraph, be allocated in such manner as HSBC may, in its
            sole and absolute discretion, determine.

2.4   ALLOCATION OF PUBLIC OFFER UNDER-SUBSCRIPTION TO INTERNATIONAL PLACING

      If a Public Offer Under-Subscription shall occur, HSBC, at its sole and
      absolute discretion, may (but shall not be obliged to) reallocate all or
      any of the Public Offer Shares comprised in any such Public Offer
      Under-Subscription from the Public Offer to the International Placing and
      the Public Offer Underwriting Commitment of the relevant Public Offer
      Underwriter or the Public Offer Underwriters, as the case may be, shall be
      correspondingly automatically reduced in the same proportion as the
      aggregate amount of Public Offer Shares is reduced as a result of any such
      reallocation.

2.5   PRICE DETERMINATION

      The Offer Price shall be fixed by agreement between the Selling
      Shareholder (after consultation with the Company) and HSBC (on behalf of
      the Public Offer Underwriters) in Hong Kong dollars after market demand
      for the International Placing has been determined, which price (net of
      Brokerage, Fee and Levies) shall not exceed HK$4.20. It is expected that
      the Offer Price will be determined on or around the 22 April 2004,
      provided that such determination shall in any event be made no later than
      26 April 2004.

2.6   APPOINTMENT OF SPONSOR, GLOBAL COORDINATOR, BOOKRUNNER, LEAD MANAGER AND
      PUBLIC OFFER UNDERWRITERS

      2.6.1 Subject to the terms and conditions of this Agreement:

            (i)   the Company hereby appoints, to the exclusion of all others,
                  HSBC as its sponsor in respect of the listing of the Shares on
                  the Stock Exchange;

            (ii)  the Selling Shareholder hereby appoints, to the exclusion of
                  others, HSBC as the global coordinator, bookrunner and lead
                  manager to manage the Global Offering; and

            (iii) the Selling Shareholder hereby appoints, to the exclusion of
                  others, the Public Offer Underwriters as underwriters for the
                  Public Offer,

            and HSBC and other Public Offer Underwriters relying on the
            representations, warranties, agreements, undertakings and
            indemnities herein contained and subject as hereinafter mentioned,
            accept their respective appointments hereunder.

      2.6.2 Each such appointment is made on the basis, and upon terms, that the
            appointee is irrevocably authorised to delegate all or any of its
            relevant rights, duties, powers and discretions in such manner and
            on such terms or subject to such conditions as it thinks fit (with
            or without formality and without prior notice of any such delegation
            being required to be given to the Company or the Selling
            Shareholder) to any one or more of its Affiliates.

      2.6.3 Each of the Company and the Selling Shareholder hereby confirms that
            the foregoing appointments confer on each appointee and its
            Affiliates all rights,

                                      13
<PAGE>

            powers, authorities and discretions on behalf of the Company and the
            Selling Shareholder which are necessary for, or incidental to, the
            performance of its roles contemplated by this Agreement and hereby
            agree to ratify and confirm everything which such appointee and its
            Affiliates have done or shall do in the exercise of such rights,
            powers, authorities and discretions.

3     THE PUBLIC OFFER

3.1   PUBLIC OFFER

      3.1.1 OFFER OF PUBLIC OFFER SHARES

            The Selling Shareholder will, subject to the determination of the
            Offer Price pursuant to Clause 2.5, offer the Public Offer Shares
            for purchase by the public at the Offer Price plus Brokerage, Fee
            and Levies which is payable in full on application in Hong Kong
            dollars, on and subject to the terms and conditions set out in the
            Public Offer Documents and this Agreement. HSBC will, subject to
            registration of the Public Offer Documents in accordance with
            Clauses 2.1.1 (ii) and 2.1.1(iii), cause the Formal Notice to be
            published in the newspapers and publications and on the date(s) set
            out in Schedule 5 (or such other newspapers, publications and/or
            date(s) as the Company, the Selling Shareholder and HSBC may agree).

      3.1.2 APPLICATION LISTS

            The application lists for the Public Offer Shares will, subject as
            mentioned below, open at 11:45 a.m. on 21 April 2004 and will close
            at 12:00 noon on the same day. In the event of a tropical cyclone
            warning signal number 8 or above or a "black" rainstorm warning
            signal (in any such case, a "SIGNAL") being in force in Hong Kong at
            any time between 9:00 a.m. and 12:00 noon on 21 April 2004 then the
            application lists will open at 11:45 a.m. and close at 12:00 noon on
            the next Business day. All references in this Agreement to the time
            of opening and closing of the application lists shall be construed
            accordingly.

      3.1.3 BASIS OF ALLOCATION

            The Selling Shareholder agrees that HSBC shall have the sole and
            exclusive right, in its sole and absolute discretion, on and subject
            to the terms and conditions set out in the Public Offer Documents
            and this Agreement, to accept or reject (in whole or in part) any
            Public Offer Application and, where the number of Public Offer
            Shares being applied for exceeds the total number of the Public
            Offer Shares, to determine the basis of allocation of the Public
            Offer Shares.

            Each of the Company and the Selling Shareholder (as the case may be)
            shall, and shall procure (and insofar as it is able) that the
            Receiving Banker and the Sub-Registrars shall, as soon as
            practicable and in no event later than 10:00 p.m. on the Acceptance
            Date provide to HSBC with such information and assistance as HSBC
            may require for the purposes of determining;

            (i)   in respect of a Public Offer Over-Subscription, the basis of
                  allocation of the Public Offer Shares; or

                                      14
<PAGE>

            (ii)  in respect of a Public Offer Under-Subscription, the number of
                  Public Offer Shares in respect of which Accepted Public Offer
                  Applications have not been received.

      3.1.4 RECEIVING BANKER; NOMINEE

            The Selling Shareholder will appoint the Receiving Banker to act as
            receiving banker in connection with the receiving of Public Offer
            Applications and the Nominee in connection with the receiving and
            holding of Public Offer Application Moneys and any interest accruing
            thereon, in both cases on and subject to the terms and conditions of
            the Receiving Banker Agreement.

      3.1.5 REGISTRARS AND SUB-REGISTRARS

            The Company and the Selling Shareholder will appoint the Registrars
            and the Sub-Registrars to provide services in connection with the
            processing of Public Offer Applications on and subject to the terms
            and conditions of the Registrars Agreement and the Sub-Registrars
            Agreement.

      3.1.6 FURTHER ASSURANCE

            Without prejudice to the foregoing obligations, each of the Company,
            the Selling Shareholder and the Executive Directors undertakes with
            the Public Offer Underwriters that it will give all such assistance
            and provide all such information and do (or procure to be done) all
            such other acts and things as may be required by HSBC to implement
            the Public Offer and this Agreement and that it will comply with all
            requirements so as to enable listing of and permission to deal in
            the Shares to be granted by the Listing Committee, such dealing to
            commence on or before 16 May 2004 and to enable such listing to be
            maintained thereafter, including in particular, effecting all
            necessary registrations and/or filings with the Stock Exchange, the
            SFC and the Registrar of Companies in Hong Kong, and the Executive
            Directors and the Company will take all steps to ensure that each of
            the Directors shall duly sign or cause to be duly signed on their
            behalf all documents required to be signed by them as Directors for
            the purpose of or in connection with any such registrations and/or
            filings or the obtaining of listing of and permission to deal in the
            Shares on the Stock Exchange.

3.2   PUBLIC OFFER DOCUMENTS

      The Company will, on the Prospectus Date, issue the Public Offer Documents
      and will cause such number of copies as HSBC directs of the Public Offer
      Documents to be delivered to HSBC or as HSBC directs.

3.3   SALE OF PUBLIC OFFER SHARES

      3.3.1 No later than 8:30 a.m. on the day which is two Business Days after
            the Acceptance Date, the Selling Shareholder will deliver the
            relevant share certificates for the Public Offer Shares together
            with instruments of transfer and/or any other documents required to
            effect the transfer of the Public Offer Shares under the applicable
            Laws to the Sub-Registrars. The Selling Shareholder agrees to give
            all consents and do all acts and things and execute all and any
            documents which in the sole and absolute discretion of HSBC are
            deemed necessary or desirable to effect the sale of the Public Offer
            Shares. The Selling Shareholder shall sell each Public Offer Shares
            free from any Encumbrance and with the benefit of all rights

                                      15
<PAGE>

            attached thereto and thereafter accruing thereto including the right
            to receive all dividends or other distributions which may declared,
            paid or made thereon at or after the date of the transfer of the
            Public Offer Shares pursuant to Clause 3.3.3.

      3.3.2 Upon receipt by the Sub-Registrars of the Application Forms for the
            Accepted Public Offer Applications, the Company shall (and the
            Selling Shareholder shall procure that the Company) as soon as
            practicable thereafter and in no event by later than 8:30 a.m. on
            the fourth Business Day after the Acceptance Date:

            {i)   procure that the Sub-Registrars shall, conditional upon the
                  fulfilment of the Conditions, effect the cancellation of the
                  relevant share certificates for the Public Offer Shares and
                  the transfer of the public offer shares to the successful
                  applicants;

            (ii)  procure that the names of the successful applicants (or, where
                  appropriate, HKSCC Nominees Limited) shall be entered in the
                  register of members of the Company accordingly (without
                  payment of any registration fee); and

            (iii) procure that share certificates in respect thereof (each in a
                  form complying with the Listing Rules and in such number and
                  denominations as directed by HSBC) shall be issued and
                  despatched, or delivered or released to successful applicants
                  (or where appropriate, Hong Kong Securities Clearing Company
                  Limited for immediate credit to such CCASS stock accounts as
                  shall be notified by HSBC to the Company for such purpose), or
                  made available for collection (as applicable) as provided for
                  in the Public Offer Documents and this Agreement.

3.4   UNDERWRITING OF THE PUBLIC OFFER

      3.4.1 PUBLIC OFFER UNDERWRITERS' SET OFF

            In relation to each Public Offer Application made or procured to be
            made by any of the Public Offer Underwriters otherwise than pursuant
            to the provisions of Clause 3.4.2, the Public Offer Underwriting
            Commitment of such Public Offer Underwriter shall, subject to the
            Application Form relating to such Public Offer Application having
            been duly completed and marked with the name of such Public Offer
            Underwriter (or any sub-underwriter of such Public Offer Underwriter
            and designated as such) and to such Public Offer Application having
            been accepted (whether in whole or in part) pursuant to the
            provisions of Clause 3.1.3, be reduced pro tanto by the number of
            Public Offer Shares comprised in such Public Offer Application to
            the extent that such Public Offer Application has been accepted
            until the Public Offer Underwriting Commitment of such Public Offer
            Underwriter is reduced to zero. Application Forms and cheques or
            cashier's orders for the full amount payable on application in
            respect of Public Offer Applications to which this Clause 3.4.1
            applies may be submitted in the manner provided for in the Public
            Offer Documents with delivery of a copy to HSBC, on or before 10:00
            a.m. on the Acceptance Date,

      3.4.2 SEVERAL UNDERWRITING COMMITMENTS

            On and subject to the terms and conditions of this Agreement and in
            reliance upon the Warranties, if and to the extent that, by 12:00
            noon on the Acceptance Date, there shall remain any Public Offer
            Shares which have not been validly applied for pursuant to Accepted
            Public Offer Applications or in respect of which payment has

                                       16
<PAGE>

            not been cleared (a "PUBLIC OFFER UNDER-SUBSCRIPTION"), the Public
            Offer Underwriters (other than any Public Offer Underwriter whose
            Public Offer Underwriting Commitment has been reduced by Relevant
            Public Offer Applications to zero pursuant to Clause 3.4.1) shall,
            subject as provided in Clause 3.4.7, apply or procure applications
            for such Public Offer Shares at the Offer Price in accordance with
            the terms and conditions set out in the Public Offer Documents
            (other than as to the deadline for making Public Offer Applications
            and the terms of payment) and shall pay or procure to be paid the
            full amount payable on application (plus Brokerage, Fee and Levies)
            in accordance with Clause 3.4.6, provided that the obligations of
            the Public Offer Underwriters in respect of such Public Offer Shares
            under this Clause 3.4.2 shall be several (and not joint or joint and
            several) on the basis that each Public Offer Underwriter shall apply
            or procure applications for the number of such Public Offer Shares
            up to but not exceeding the number of Public Offer Shares calculated
            by applying the percentage set opposite the name of such Public
            Offer Underwriter in column (II) below to the total number of Public
            Offer Shares finally determined, subject to adjustment as referred
            to in Clauses 2.3 and 2.4 (if applicable) and each Public Offer
            Underwriter's obligations in respect of such Public Offer Shares
            shall be borne in the proportion which:

            (a)   the number of Public Offer Shares calculated by applying the
                  percentage set opposite the name of such Public Offer
                  Underwriter in column (II) below to the total number of Public
                  Offer Shares finally determined:

                  (I)                                                (II)
                  NAME OF UNDERWRITER                                   %
                  HSBC                                                 71
                  BNP Paribas Peregrine Capital Limited                10
                  Nomura International (Hong Kong) Limited             10
                  Cazenove Asia Limited                                 3
                  DBS Asia Capital Limited                              3
                  VC CEF Capital Limited                                3

                  less the number of Public Offer Shares comprised in Relevant
                  Public Offer Applications of such Public Offer Underwriter
                  bears to

            (b)   the aggregate number of Public Offer Shares less the aggregate
                  number of Public Offer Shares comprised in Relevant Public
                  Offer Applications of all Public Offer Underwriters.

            The obligations of the Public Offer Underwriters determined pursuant
            to this Clause 3.4.2 may be rounded, as determined by HSBC in its
            sole and absolute discretion, to avoid fractions and odd lots. The
            determination of HSBC shall be final and conclusive.

      3.4.3 ACCEPTANCE OF APPLICATIONS

            The Selling Shareholder agree with the Public Offer Underwriters
            that all duly completed Application Forms received prior to the
            Application Lists being closed and accepted by HSBC pursuant to
            Clause 3.1.3, either in whole or in part, will, if accompanied with
            a remittance which has been duly cleared, be accepted by the

                                       17
<PAGE>

            Selling Shareholder before calling upon the Public Offer
            Underwriters or any of them to perform the obligations imposed on it
            by this Clause 3.4.

      3.4.4 CALCULATION OF PUBLIC OFFER SHARES APPLIED FOR

            Following the closing of the Application Lists, the Company and the
            Selling Shareholder shall procure that the Receiving Banker and the
            Sub-Registrars shall as soon as possible, and in any event not later
            than 5:00 p.m. on the second Business Day following the Acceptance
            Date, to calculate the number of Public Offer Shares for which duly
            completed Application Forms have been received and to complete the
            processing of the Public Offer Applications and in the event of a
            Public-Offer Under-Subscription, to notify HSBC forthwith of the
            number of the unsubscribed Public Offer Shares.

      3.4.5 NOTIFICATION TO THE PUBLIC OFFER UNDERWRITERS

            Subject to Clause 2.4, in the event of a Public Offer
            Under-Subscription so that the Public Offer Underwriters are obliged
            to apply for or procure applicants for the Public Offer Shares
            representing the shortfall, HSBC on behalf of the Selling
            Shareholder will, subject to receiving notification from the
            Receiving Banker and Sub-Registrars pursuant to Clauses 3.1.3 and
            3.4.4, cause the Receiving Banker as soon as possible and in any
            event by 9:00 p.m. on the Acceptance Date (such Business Day being
            hereinafter referred to as the "Shortfall Notification Date") to
            notify the Public Offer Underwriters of the number of Public Offer
            Shares falling to be taken up pursuant to Clause 3.4.2 (subject to
            adjustment taking into account applications rejected due to
            application cheques which were dishonoured upon first presentation
            (the "BOUNCED CHEQUES")). HSBC on behalf of the Selling Shareholder
            will, subject to receiving notification from the Receiving Banker
            and Sub-Registrars pursuant to Clauses 3.1.3 and 3.4.4, cause the
            Receiving Banker as soon as possible and in any event by 5:00 p.m.
            on the second Business Day following the Acceptance Date to notify
            the Public Offer Underwriters of the number of Public Offer Shares
            falling to be taken up pursuant to Clause 3.4.2, having taken into
            account the Bounced Cheques. If there is no Public Offer
            Under-Subscription, then the obligations of the Public Offer
            Underwriters in relation to the Public Offer pursuant to this Clause
            3.4 shall cease.

      3.4.6 PUBLIC OFFER UNDERWRITERS' PURCHASE OBLIGATIONS

            As soon as practicable, and in any event not later than 2:00 p.m. on
            the third Business Day which falls immediately after the Shortfall
            Notification Date and subject to the Conditions having been
            fulfilled or waived by HSBC (on behalf of the Public Offer
            Underwriters) pursuant to Clause 2.1, each of the Public Offer
            Underwriters will:

            (i)   deliver to HSBC duly completed Application Form(s) for such
                  number of Public Offer Shares as fall to be taken up by it
                  pursuant to Clause 3.4.2 specifying the names and addresses of
                  the applicants and the number of Public Offer Shares to be
                  allocated to each such applicant; and

            (ii)  pay, or procure to be paid, to the Nominee the aggregate
                  amount payable on application in respect of the Offer Price
                  for such Public Offer Shares as fall to be taken up by it
                  pursuant to Clause 3.4.2 (which shall include all

                                       18
<PAGE>
                  amounts on account of Brokerage, Fee and Levies in accordance
                  with the terms of the Public Offer),

            and the Selling Shareholder will, as soon as practicable after such
            payment and in no event later than 8:30 a.m. on the fourth Business
            Day after the Shortfall Notification Date, duly transfer to the said
            applicants the Public Offer Shares to be taken up as aforesaid and
            procure the Sub-Registrars to duly issue and deliver the share
            certificates in relation to such Public Offer Shares, in each case
            on the basis set out in Clause 3.3.

      3.4.7 HSBC'S OPTION

            If a Public Offer Under-Subscription shall occur, HSBC shall have
            the right (but shall not be obliged) to apply or procure
            applications for (subject to and in accordance with this Agreement)
            all or any of the Public Offer Shares which any Public Offer
            Underwriter is required to apply or procure applications for
            pursuant to Clause 3.4.2. Any application submitted or procured to
            be submitted by HSBC pursuant to this Clause 3.4.7 in respect of
            which payment is made in accordance with Clause 3.4.6, specifying
            the relevant Public Offer Underwriter whose obligations HSBC is
            thereby satisfying, shall satisfy pro tanto the obligation of the
            relevant Public Offer Underwriter under this Clause 3.4 and shall
            not affect any agreement or arrangement between the Public Offer
            Underwriters regarding the payment of underwriting commission.

3.5 DEFAULT OF A PUBLIC OFFER UNDERWRITER

      Subject to the provisions of the Agreement Between Public Offer
      Underwriters (which shall not be binding on or confer any rights upon any
      persons other than the parties thereto), none of HSBC or any of the Public
      Offer Underwriters will be liable for any failure on the part of any of
      the other Public Offer Underwriters to perform any of such other Public
      Offer Underwriter's obligations under this Agreement. Notwithstanding the
      foregoing, each of HSBC and the Public Offer Underwriters shall be
      entitled to enforce any or all of its rights under this Agreement either
      alone or jointly with any or all of the other Public Offer Underwriters.

3.6 PAYMENT OBLIGATIONS RELATING TO THE PUBLIC OFFER

      3.6.1 PAYMENT TO THE SELLING SHAREHOLDER

            The Public Offer Application Moneys held by the Nominee will, in
            accordance with the provisions of the Receiving Banker Agreement and
            subject to Clauses 3.6.2, 3.6.3 and 3.6.4, be paid over to the
            Selling Shareholder through Nam Tai Group Management Limited in Hong
            Kong dollars by 9:30 a.m. on the Listing Date by crediting the
            Designated Bank Account (as defined in this Clause 3.6.1), upon the
            Nominee receiving written confirmation from HSBC in accordance with
            the provisions of the Receiving Banker Agreement that, inter alia,
            the Conditions have been fulfilled and that the Sub-Registrars has
            despatched valid share certificates in the names of successful
            applicants or HKSCC Nominees Limited (as the case may be) for the
            Public Offer Shares provided that the Nominee will, in accordance
            with the provisions of the Receiving Banker Agreement, deduct from
            the amount so payable to the Selling Shareholder and pay to HSBC
            (where a person other than HSBC is entitled to any amount so paid,
            as agent on behalf of such person) or to such person as HSBC may
            instruct:

                                       19
<PAGE>

            (i)   the underwriting commission, the sponsorship and financial
                  advisory fee and other fees and expenses payable under Clauses
                  4.1 and 4.2; and

            (ii)  the whole or such portion of the fees, costs and expenses
                  which remain payable by the Selling Shareholder under Clauses
                  4.3 and 4.4 as HSBC may calculate and direct being an amount
                  representing HSBC's estimate of all such fees, costs and
                  expenses provided that:

                  (a)   without prejudice to the Selling Shareholder's
                        obligation under Clauses 4.3 and 4.4, any actual payment
                        by HSBC to such person who is entitled to payment under
                        Clauses 4.3 and 4.4 shall not be made without prior
                        consent of the Selling Shareholder;

                  (b)   if the amount deducted pursuant to this paragraph (ii)
                        is insufficient for purposes of covering such fees,
                        costs and expenses, the Selling Shareholder shall pay to
                        HSBC (where a person other than HSBC is entitled to any
                        amount so paid, as agent on behalf of such person)
                        and/or to such person as HSBC may instruct an amount
                        equal to such shortfall forthwith upon receipt of demand
                        for the same from HSBC and, in any event, no later than
                        five Business Days from the date of such demand); and

                  (c)   HSBC shall within three months of the date of this
                        Agreement pay to the Selling Shareholder through Nam Tai
                        Group Management Limited by crediting the Designated
                        Bank Account an amount equal to the balance of the
                        amount of fees, costs and expenses deducted under this
                        paragraph (ii), if any, after payment by HSBC on behalf
                        of the Selling Shareholder of the aforementioned fees,
                        costs and expenses, and

            such payment of the Public Offer Application Moneys (subject to the
            deductions to be made pursuant to this Clause 3.6.1) into the
            Designated Bank Account shall discharge the Public Offer
            Underwriters of any further payment obligations with respect to the
            Public Offer Shares.

            For the purpose this Clause 3.6.1, "DESIGNATED BANK ACCOUNT" means
            the following bank account of Nam Tai Group Management Limited, a
            wholly owned subsidiary of the Selling Shareholder and incorporated
            in Hong Kong:

            Holder of the Bank Account: Nam Tai Group Management Limited

            Bank Name: The Hongkong and Shanghai Banking Corporation Limited

            Account Number: 500-815287-001.

      3.6.2 PAYMENT OF BROKERAGE, FEE AND LEVIES

            HSBC, on behalf of the Public Offer Underwriters, will arrange for
            the payment by the Nominee to the persons entitled thereto of the
            Brokerage, Fee and Levies in respect of Accepted Public Offer
            Applications, such amounts to be paid out of the Public Offer
            Application Moneys.

                                       20
<PAGE>

      3.6.3 PAYMENT OF TRADING FEE, TRANSACTION LEVY AND INVESTOR COMPENSATION
            LEVY ON BEHALF OF THE SELLING SHAREHOLDER

            HSBC, on behalf of the Selling Shareholder, will arrange for the
            payment by the Nominee of the Trading Fee, the Transaction Levy and
            the Investor Compensation Levy payable by the Selling Shareholder in
            respect of Accepted Public Offer Applications to the Stock Exchange,
            such amounts to be paid out of the Public Offer Application Moneys.

      3.6.4 PAYMENT OF STAMP DUTY ON BEHALF OF THE SELLING SHAREHOLDER

            HSBC, on behalf of the Selling Shareholder, will arrange for the
            Nominee to transfer from the Public Offer Application Moneys such
            amount of the stamp duty payable by the Selling Shareholder and the
            purchasers of the Public Offer Shares in connection with the
            transfer of the Public Offer Shares, for payment by HSBC to the
            Inland Revenue Department of the Government of Hong Kong.

      3.6.5 REFUND OF PUBLIC OFFER APPLICATION MONEYS

            In accordance with the terms of the Receiving Banker Agreement and
            the Sub-Registrars Agreement, the Nominee will pay, and the
            Sub-Registrars will arrange for the distribution of cheques, to
            applicants under the Public Offer who are entitled to receive any
            refund of Public Offer Application Moneys in accordance with the
            terms of the Public Offer Documents.

      3.6.6 DISCHARGE FROM PUBLIC OFFER UNDERWRITER'S OBLIGATIONS

            As soon as the Public Offer Shares comprising the Public Offer
            Underwriting Commitment of a Public Offer Underwriter shall be
            purchased and paid for by the Public Offer Underwriter and/or
            purchasers procured by such Public Offer Underwriter and/or
            otherwise pursuant to this Agreement, such Public Offer Underwriter
            shall be discharged from all further liability under this Agreement
            save in respect of Clauses 10.8 and 10.9 and any antecedent breaches
            under this Agreement.

4 COSTS, EXPENSES, FEES AND COMMISSIONS

4.1 UNDERWRITING COMMISSIONS

      In consideration of the services of the Public Offer Underwriters under
      this Agreement, the Selling Shareholder will pay to HSBC (for itself and
      on behalf of the Public Offer Underwriters) an underwriting commission at
      the rate of 3.0% of the Reference Public Offer Amount, out of which the
      Public Offer Underwriters will meet all (if any) sub-underwriting
      commissions. For the avoidance of doubt, if the number of Public Offer
      Shares is reduced as provided in Clause 2.4, the Public Offer Underwriters
      shall not be entitled to the commission of 3.0% in relation to those
      unsubscribed Shares which are reallocated to the International Placing
      pursuant to Clause 2.4, and if the number of Public Offer Shares is
      increased as provided in Clause 2.3, the Public Offer Underwriters shall
      not be entitled to the commission of 3.0% in relation to those Shares
      reallocated from the International Placing to the Public Offer pursuant to
      Clause 2.3.

4.2 SPONSORSHIP AND FINANCIAL ADVISORY FEE AND OTHER FEES AND EXPENSES

      The Selling Shareholder will further pay to HSBC a combined sponsorship
      and financial advisory fee and such other fees and expenses of such
      amounts and in such manner as

                                       21
<PAGE>

      have been separately agreed between the Company (or any member of the
      Group) and/or the Selling Shareholder (or any member of its group) and
      HSBC.

4.3   PUBLIC OFFER UNDERWRITERS' EXPENSES

      The Selling Shareholder shall also pay to HSBC on behalf of the Public
      Offer Underwriters, all amount of costs, fees and expenses (including,
      without limitation, the costs of the Public Offer Underwriters' legal
      advisers and all travelling, telecommunications, postage and other
      out-of-pocket expenses) incurred by the Public Offer Underwriters or any
      of them or on their or its behalf under this Agreement or in connection
      with the Public Offer.

4.4   EXPENSES TO BE BORNE BY THE SELLING SHAREHOLDER

      The Selling Shareholder shall be responsible for all costs, fees and
      expenses arising from, in connection with or incidental to the Global
      Offering, which shall include but are not limited to the following:

      (a)   the stamp duty payable by the Selling Shareholder and purchasers of
            the Public Offer Shares in connection with the transfer of the
            Public Offer Shares in the Public Offer;

      (b)   any other capital duty, premium duty, tax, duty, levy and other
            fees, charges and expenses payable (including any fines or
            penalties), whether pursuant to any Law or otherwise in respect of
            the transfer of the Offer Shares, the Global Offering and all
            transactions contemplated thereunder, the execution and delivery of,
            and the performance of any of the provisions under, the Underwriting
            Documents save for any profit tax payable in Hong Kong by any of
            HSBC or the Underwriters, arising out of any commission or fees
            received by any of such parties pursuant to the Underwriting
            Documents;

      (c)   fees and expenses of the Reporting Accountants;

      (d)   fees and expenses of the Receiving Banker;

      (e)   fees and expenses of the Property Valuers;

      (f)   fees and expenses of the Registrars and the Sub-Registrars;

      (g)   fees and expenses of all legal advisers;

      (h)   fees and expenses of the public relations consultants;

      (i)   fees and expenses of the translators;

      (j)   fees and expenses of other agents and advisers of the Company and
            the Selling Shareholder;

      (k)   fees and expenses related to the application for listing of the
            Shares on the Stock Exchange and the maintenance of a listing on
            the Stock Exchange;

      (l)   fees and expenses related to the filing or registration of the
            Public Offer Documents and any amendments and supplements thereto
            with any relevant authority, including the Registrar of Companies in
            Hong Kong;

      (m)   costs and expenses relating to the launching of the Global Offering
            and the conducting of roadshows, syndicate analysts' briefing and
            video and other presentations relating to the Global Offering;

                                       22
<PAGE>

      (n)   printing and advertising costs;

      (o)   the costs of preparing, printing, delivery and distribution
            (including transportation, packaging and insurance) of documents of
            title to the Offer Shares; and

      (p)   costs of despatch and distribution of the Offer Documents and all
            amendments and supplements thereto in all relevant jurisdictions.

4.5   PAYMENT

      All amounts due hereunder shall be due and payable on or before the
      Listing Date and may be deducted from the Public Offer Application Moneys
      pursuant to Clause 3.6.

5     REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

5.1   REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY THE WARRANTORS

      The Warrantors jointly and severally represent, warrant, agree and
      undertake to the Public Offer Underwriters and each of them in the terms
      set out in Part 1 of Schedule 7. The Company represents, warrants, agrees
      and undertakes to the Public Offer Underwriters and each of them in the
      terms set out in Part 2 of Schedule 7. The Selling Shareholder further
      represents, warrants, agrees and undertakes to the Public Offer
      Underwriters and each of them in the terms set out in Part 3 of Schedule
      7. The Warrantors accept that each of the Public Offer Underwriters is
      entering into this Agreement in reliance upon each of such
      representations, warranties, agreements and undertakings.

5.2   RIGHTS IN RELATION TO THE WARRANTIES

      5.2.1 Each of the Warranties shall be construed separately and shall not
            be limited or restricted by reference to or inference from the terms
            of any other of the Warranties or any other term of this Agreement.

      5.2.2 The Warranties shall remain in full force and effect notwithstanding
            completion of the Global Offering.

      5.2.3 The Warranties are given on and as at the date of this Agreement
            with respect to the facts and circumstances subsisting at the date
            of this Agreement. In addition, the Warranties shall be deemed to be
            given on and as at:

            (i)   the date on which the Public Offer Documents are registered by
                  the Registrar of Companies in Hong Kong as required by section
                  342C of the Companies Ordinance;

            (ii)  the Acceptance Date;

            (iii) the Price Determination Date; and

            (iv)  immediately prior to 8:00 a.m. on the Force Majeure Expiry
                  Date,

            in each case with reference to the facts and circumstances then
            subsisting. For the avoidance of doubt, nothing in this Clause 5.2.3
            shall affect the on-going nature of the Warranties.

      5.2.4 Each of the Warrantors undertakes to give notice to each of the
            Public Offer Underwriters forthwith of any matter or event coming to
            their respective attention at any time on or prior to the last date
            on which the Warranties are deemed to be

                                       23
<PAGE>

            given pursuant to the provisions of Clause 5.2.3 which shows any of
            the Warranties to be or to have been untrue or inaccurate or
            breached.

      5.2.5 If at any time on or prior to the date on which the Warranties are
            deemed to be given pursuant to the provisions of Clause 5.2,3, by
            reference to the facts and circumstances then subsisting, any matter
            or event comes to the attention of any of the Warrantors which:

            (i)   would or might result in any of the Warranties, if repeated
                  immediately after the occurrence of such matter or event,
                  being untrue or inaccurate or breached; or

            (ii)  would or might render untrue, inaccurate or misleading any
                  statement, whether of fact or opinion, contained in the Public
                  Offer Documents, the Formal Notice or the Preliminary Offering
                  Circular or any of them if the same were issued immediately
                  after the occurrence of such matter or event; or

            (iii) would or might result in the omission of any fact which is
                  material for disclosure or required by applicable Laws to be
                  disclosed in the Public Offer Documents, the Formal Notice or
                  the Preliminary Offering Circular or any of them (assuming
                  that the relevant documents were to be issued immediately
                  after occurrence of such matter or event); or

            (iv)  would or might result in any breach of the representations,
                  warranties or undertakings given by any of the Warrantors or
                  any circumstances giving rise to a claim under any of the
                  indemnities as contained in, or given pursuant to, this
                  Agreement,

            such Warrantor shall forthwith notify and consult the Company (for
            itself and on behalf of the Selling Shareholder) and HSBC (for
            itself and on behalf of the other Public Offer Underwriters) and
            shall take such steps as may be requested by HSBC (for itself and on
            behalf of the other Public Offer Underwriters) to remedy the same.

      5.2.6 If any matter or event referred to in Clause 5.2.5 shall have
            occurred, nothing herein shall prejudice any rights that HSBC or any
            of the Public Offer Underwriters may have in connection with the
            occurrence of such matter or event, including without limitation its
            rights under Clause 9.

      5.2.7 Each of the Company and the Selling Shareholder shall not, and shall
            procure that their respective Affiliates will not, and the Executive
            Directors and the Selling Shareholder shall procure that the Company
            will not:

            (i)   do or omit to do anything which may cause, and will use its
                  best efforts not to permit, any of the Warranties pursuant to
                  Clause 5.1 to be untrue or inaccurate or breached in any
                  respect at or prior to any time referred to in Clause 5.2.3
                  (assuming such Warranties to be repeated at such times with
                  reference to the facts and circumstances then subsisting); or

            (ii)  do or omit to do anything which could materially and adversely
                  affect the Global Offering.

                                       24
<PAGE>

      5.2.8 For the purpose of this Clause 5:

            (i)   the representations, warranties, agreements and undertakings
                  shall remain in full force and effect notwithstanding the
                  completion of the purchase of the Offer Shares, the completion
                  of the Global Offering and all other matters and arrangements
                  referred to or contemplated by this Agreement; and

            (ii)  if an amendment or supplement to the Public Offer Documents,
                  the Formal Notice or the Preliminary Offering Circular or any
                  of them is published after the date hereof pursuant to Clause
                  6.1.1(x), representations, warranties, agreements and
                  undertakings relating to any such documents given pursuant to
                  this Clause 5 shall be deemed to be repeated on the date of
                  publication of such amendment or supplement and when so
                  repeated, representations, warranties, agreements and
                  undertakings relating to such documents shall be read and
                  construed subject to the provisions of this Agreement as if
                  the references therein to such documents means such documents
                  when read together with such amendment or supplement.

6     FURTHER UNDERTAKINGS

6.1   FURTHER UNDERTAKINGS BY THE COMPANY, THE SELLING SHAREHOLDER AND THE
      EXECUTIVE DIRECTORS

      6.1.1 The Company undertakes to each of the Public Offer Underwriters that
            it will, and the Executive Directors and the Selling Shareholder
            shall procure that the Company will:

            (i)   maintain a listing for the Shares on the Stock Exchange for at
                  least one year after the Conditions have been fulfilled and to
                  pay all fees and supply all further documents, information and
                  undertakings and publish all advertisements or other material
                  as may be necessary or advisable for such purpose, except
                  following a withdrawal of such listing which has been approved
                  by the relevant shareholders of the Company in accordance with
                  the Listing Rules or following an offer (within the meaning of
                  the Hong Kong Code on Takeovers and Mergers) for the Company
                  becoming unconditional;

            (ii)  procure that no connected persons (as defined in the Listing
                  Rules) of the Company will itself (or through a company
                  controlled by it) apply or purchase any Offer Shares either in
                  its own name or through nominees unless permitted to do so
                  under the Listing Rules, and if any such application therefor,
                  or after due and careful enquiries, it becomes aware of any
                  indication of interest therefor, has been made by such
                  persons, it shall forthwith notify HSBC (on behalf of the
                  Public Offer Underwriters);

            (iii) procure that there shall be delivered to the Stock Exchange as
                  soon as practicable the declaration in the form set out in
                  Appendix 5, Form F of the Listing Rules;

            (iv)  procure that the audited accounts of the Company for its
                  financial year ending 31 December 2004 will be prepared on a
                  basis consistent with the accounting policies adopted for the
                  purposes of the financial statements

                                       25
<PAGE>

                  contained in the report of the Reporting Accountants set out
                  in Appendix I to the Prospectus;

            (v)   save as pursuant to any share option scheme of any member of
                  the Group, not without the prior written consent of HSBC (on
                  behalf of the Public Offer Underwriters) and unless in
                  compliance with the Listing Rules:

                  (a)   at any time after the date of this Agreement up to and
                        including the date falling six months after the date on
                        which dealings in the Shares first commence on the Stock
                        Exchange (the "FIRST SIX-MONTH PERIOD"):

                        (I)   offer, accept subscription for, pledge, issue,
                              sell, lend, mortgage, assign, charge, contract to
                              issue or sell, sell any option or contract to
                              purchase, purchase any option or contract to sell,
                              grant or agree to grant any option, right or
                              warrant to purchase or subscribe for, lend or
                              otherwise transfer or dispose of, either directly
                              or indirectly, conditionally or unconditionally,
                              any of the share capital or other securities of
                              the Company or any interest therein (including,
                              but not limited to, any securities that are
                              convertible into or exchangeable for, or that
                              represent the right to receive any such capital or
                              securities or any interest therein); or

                        (II)  enter into any swap or other arrangement that
                              transfers to another, in whole or in part, any of
                              the economic consequences of ownership of any such
                              capital or securities or any interest therein; or

                        (III) enter into any transaction with the same economic
                              effect as any transaction described in paragraphs
                              (I) or (II) above;

                        (IV)  agree or contract to, or publicly announce any
                              intention to enter into, any transaction described
                              in paragraphs (I), (II) or (III) above,

                        whether any such transaction described in paragraphs (I)
                        or (II) or (III) above is to be settled by delivery of
                        Shares or other securities, in cash or otherwise; and

                  (b)   enter into any of the foregoing transactions in
                        paragraphs (a)(I), (II) and (III) above, or agree or
                        contract to or publicly announce any intention to enter
                        into any such transaction, such that the Selling
                        Shareholder would cease to be a controlling shareholder
                        (as defined in the Listing Rules) of the Company during
                        the six-month period immediately following the First
                        Six-Month Period (the "SECOND SIX-MONTH PERIOD");

            (vi)  not, at any time after the date of this Agreement up to and
                  including the date on which all of the Conditions are
                  fulfilled (or waived) in accordance with this Agreement, amend
                  or agree to amend the Articles of Association save as
                  requested by Stock Exchange;

                                       26
<PAGE>

            (vii) until the date falling one year after the Listing Date,
                  without the prior written consent of HSBC, not enter into or
                  procure, or permit any member of the Group to enter into any
                  commitment or agreement or arrangement:

                  (a)   of an unusual or onerous nature or outside its ordinary
                        course of business, whether or not that contract,
                        commitment or arrangement would constitute a material
                        contract for the purposes of the Prospectus; and

                  (b)   which could materially and adversely affect the business
                        or affairs of the Company and the Group taken as a
                        whole;

            (viii) until the date falling six months after the Listing Date:

                  (a)   discuss with HSBC:

                        (I)   any major new developments in its sphere of
                              activity which are not public knowledge which may,
                              by virtue of the effect of those developments on
                              its assets and liabilities or financial position
                              or on the general course of its business, lead to
                              substantial movement in the price of its listed
                              securities;

                        (II)  any change in the Company's financial condition or
                              in the performance of its business or in the
                              Company's expectation of its performance which, if
                              made public, would be likely to lead to
                              substantial movement in the price of its listed
                              securities; and

                        (III) any proposals or circumstances which may lead to
                              any such developments or changes as described in
                              paragraphs (I) and (II) above,

                  (b)   forward to HSBC for perusal in draft all documents to be
                        sent to shareholders and all press announcements to be
                        issued by the Company to the Stock Exchange during such
                        period;

            (ix)  until the date falling six months after the Listing Date,
                  furnish to HSBC copies of all reports or other communications
                  furnished to shareholders, and deliver to HSBC (i) as soon as
                  they are publicly available, copies of any reports and
                  financial statements furnished to or filed with the Stock
                  Exchange or any securities exchange on which any class of
                  securities of the Company may be listed, and (ii) such
                  additional information concerning the business and financial
                  condition of the Company publicly available as HSBC may from
                  time to time request (such financial statements to be on a
                  consolidated basis to the extent the accounts of the Company
                  and its subsidiaries are consolidated in reports furnished to
                  its shareholders generally or to the Stock Exchange);

            (x)   without prejudice to any other rights of any party hereto, if
                  at any time until the completion of the Global Offering:

                  (a)   Clause 5.2.5 applies; or

                  (b)   any event shall have occurred as a result of which the
                        Offer Documents or the Formal Notice or any of them (as
                        then amended or

                                       27
<PAGE>

                        supplemented pursuant to the provisions of this Clause
                        6.1.1(x)) would include an untrue statement of a
                        material fact or omit to state any material fact
                        necessary in order to make the statements therein, in
                        the light of the circumstances under which they were
                        made when such document was issued, not misleading; or

                  (c)   if it shall be necessary to amend or supplement the
                        Offer Documents or the Formal Notice or any of them to
                        comply with applicable Law,

                  promptly notify HSBC of such event and, subject to the
                  provisions of this Clause 6.1.1(x), the Company (for itself
                  and on behalf of the Selling Shareholder) shall, at its own
                  expense, amend or supplement the Offer Documents, the Formal
                  Notice or any of them, as the case may be, and shall issue and
                  publish such other announcement, circular, document, material
                  or information and do such other act or thing as necessary or
                  advisable to correct such statement or omission or effect such
                  compliance with applicable Law or as may be requested by HSBC
                  and shall, without charge, supply HSBC or as such person(s) as
                  it shall direct with as many copies as HSBC may from time to
                  time request of the aforesaid documents, material or
                  information;

                  Except for the Offer Documents and the Formal Notice or except
                  as otherwise provided pursuant to the Underwriting Documents,
                  each of the Company and the Selling Shareholder undertakes
                  that it shall not, and each of the Executive Directors
                  undertakes to procure that the Company shall not, without the
                  prior written approval of HSBC (for itself and on behalf of
                  the Public Offer Underwriters), issue, publish, distribute or
                  otherwise make available any document (including any
                  prospectus or offering circular), announcement, material or
                  information in connection with the Public Offer (including any
                  supplement or amendment thereto).

                  The Company will advise HSBC promptly of any proposal to amend
                  or supplement the Offer Documents or the Formal Notice or any
                  of them, and will not effect such amendment or supplementation
                  without HSBC's consent (such consent not to be unreasonably
                  withheld or delayed);

            (xi)  during the period of one year after the Listing Date, refrain
                  from taking any action that could jeopardise the listed status
                  of the Shares on the Stock Exchange, provided however, that
                  this paragraph shall not prevent the Company from taking any
                  action for the delisting of the Shares so long as (a) the
                  Company complies in all respects with the Listing Rules and
                  all other applicable Laws, and (b) the requisite approval of
                  such action by the holders of the Shares is duly obtained;

            (xii) for so long as the Shares are listed on the Stock Exchange and
                  during the period of one year after the Listing Date, file
                  with the Stock Exchange, the SFC and any other Governmental
                  Authority in Hong Kong and the Cayman Islands, such reports,
                  documents, agreements and other information which may from
                  time to time be required by applicable Laws to be so filed
                  because the Shares are listed on the Stock Exchange; and

            (xiii) provide to HSBC (on behalf of the Public Offer Underwriters)
                   any such other resolutions, consents, authorities, documents,
                   opinions and

                                       28
<PAGE>

                  certificates which are relevant in the context of the Global
                  Offering owing to circumstances arising or events occurring
                  after the date of this Agreement, but on or before 8:00 a.m.
                  on the Force Majeure Expiry Date and as HSBC may require.

      6.1.2 Each of the Company and the Selling Shareholder undertakes to each
            of the Public Offer Underwriters that it will, and the Executive
            Directors and the Selling Shareholder shall procure that the Company
            will:

            (i)   comply in all respects with the terms and conditions of the
                  Global Offering as provided for in the Offer Documents and the
                  Underwriting Documents and,in particular, transfer the Public
                  Offer Shares to successful applicants under the Public Offer
                  and, if any of the Public Offer Shares falls to be taken up
                  pursuant to Clause 3.4.6, to the applicants under Clause
                  3.4.6(i);

            (ii)  comply in a timely manner with its obligations under the
                  requirements of the Stock Exchange in connection with the
                  Global Offering (including, without limitation, the Listing
                  Rules);

            (iii) procure compliance with the obligations imposed upon it by the
                  Companies Ordinance, the Companies Law and the Listing Rules
                  in respect of or by reason of the matters contemplated by this
                  Agreement, including but without limitation:

                  (a)   the making of all necessary registrations with the
                        Registrar of Companies in Hong Kong and the Registrar of
                        Companies in the Cayman Islands; and

                  (b)   the making available for inspection at the offices of
                        Johnson Stokes & Master of the documents referred to in
                        Appendix VI to the Prospectus during the period referred
                        to therein; and

            (iv)  procure that the terms of the Registrars Agreement, the
                  Sub-Registrars Agreement and the Receiving Banker Agreement
                  shall not be amended without the prior written consent of
                  HSBC.

      6.1.3 The undertakings in this Clause 6.1 shall remain in full force and
            effect notwithstanding the completion of the Global Offering and all
            matters contemplated in this Agreement.

6.2   RESTRICTIONS ON DEALINGS AND RELATED MATTERS

      6.2.1 The Selling Shareholder agrees and undertakes that, save as pursuant
            to the offer for sale of the Offer Shares under the Global Offering
            or the Over-allotment Option or any stock lending arrangements
            agreed between the Selling Shareholder and HSBC in connection with
            the Global Offering, without the prior written consent of HSBC (on
            behalf of the Public Offer Underwriters) and unless in compliance
            with the Listing Rules:

            (i)   during the First Six-Month Period:

                  (a)   save for using the Shares beneficially owned by it as
                        security (including a charge or a pledge) in favour of
                        an authorised institution (as defined in the Banking
                        Ordinance (Chapter 155 of the Laws of Hong Kong)) for a
                        bona fide commercial loan, it will not offer, pledge,

                                       29
<PAGE>

                        charge, sell, contract to sell, sell any option or
                        contract to purchase, purchase any option or contract to
                        sell, grant or agree to grant any option, right or
                        warrant to purchase or subscribe for, lend or otherwise
                        transfer or dispose of, either directly or indirectly,
                        conditionally or unconditionally, any share capital or
                        other securities of the Company or any interest therein
                        (including, but not limited to any securities that are
                        convertible into or exchangeable for, or that represent
                        the right to receive, any such capital or securities or
                        any interest therein); or

                  (b)   enter into any swap or other arrangement that transfers
                        to another, in whole or in part, any of the economic
                        consequences of ownership of any such capital or
                        securities or any interest therein; or

                  (c)   enter into any transaction with the same economic effect
                        as any transaction described in (a) or (b) above; or

                  (d)   agree or contract to, or publicly announce any intention
                        to enter into, any transaction described in (a) or (b)
                        or (c) above,

                  whether any such transaction described in (a) or (b) or (c)
                  above is to be settled by delivery of such capital or
                  securities, in cash or otherwise; and

            (ii)  during the Second Six-Month Period, it will not enter into any
                  of the foregoing transactions in paragraphs (i)(a) or (b) or
                  (c) above or agree or contract to or publicly announce any
                  intention to enter into any such transactions if, immediately
                  following such transfer or disposal, the Selling Shareholder
                  will cease to be a controlling shareholder (as the term is
                  defined in the Listing Rules) of the Company; and

            (iii) until the expiry of the Second Six-Month Period, in the event
                  that it enters into any such transactions or agrees or
                  contracts to, or publicly announces an intention to enter into
                  any such transactions, it will take all reasonable steps to
                  ensure that it will not create a disorderly or false market in
                  the securities of the Company.

      6.2.2 Subject to Clause 6.2.1, the Selling Shareholder agrees and
            undertakes that, if at any time after the date of this Agreement up
            to and including the date falling twelve months from the Listing
            Date, it shall (i) if and when it pledges, mortgages or charges any
            securities or interests in the securities of the Company
            beneficially owned by it, immediately inform the Company and HSBC in
            writing of such pledge, mortgage or charge together with the number
            of securities so pledged or mortgaged or charged; and (ii) if and
            when it receives indications, either verbal or written, from any
            pledgee or mortgagee or charges that any of the pledged, mortgaged
            or charged securities or interests in the securities of the Company
            will be disposed of, immediately inform the Company and HSBC in
            writing of such indications. The Company agrees and undertakes that
            upon receiving such information in writing from the Selling
            Shareholder, it shall, as soon as practicable, notify the Stock
            Exchange and in accordance with the requirements of the Listing
            Rules or the Stock Exchange make a public disclosure in relation to
            such information by way of press announcement.

                                       30
<PAGE>

      6.2.3 Each of the Executive Directors and the Selling Shareholder agrees
            and undertakes not to (whether itself or through any company
            controlled by it) apply or subscribe for or purchase any Offer
            Shares either in its own name or through nominees unless permitted
            to do so under the Listing Rules, and if any such application has
            been made or it has indicated an interest to acquire such Offer
            Shares, it shall forthwith notify HSBC (on behalf of the Public
            Offer Underwriters);

      6.2.4 The Company agrees and undertakes that it will not, and the Selling
            Shareholder and each of the Executive Directors undertakes to
            procure that the Company will not, effect any purchase of Shares, or
            agree to do so, which may reduce the holdings of Shares of persons
            other than the directors of the Company, its substantial
            shareholders or their respective associates (as defined in the
            Listing Rules) to below 25% on or before the date falling six months
            after the Listing Date without first having obtained the prior
            written consent of HSBC (on behalf of the Public Offer
            Underwriters).

      6.2.5 The Warrantors will procure that none of the connected persons shall
            be accepted as subscribers or purchasers of any Offer Shares either
            in its own name or through nominees unless permitted to do so under
            the Listing Rules and such subscriptions or purchases are disclosed
            in the Prospectus.

6.3   OBLIGATIONS AND LIABILITY

      6.3.1 The obligations of each of the Company, the Selling Shareholder, the
            Executive Directors shall be binding on his, her or its personal
            representatives and successors (as the case may be).

      6.3.2 Any liability to the Public Offer Underwriters or any of them
            hereunder may in whole or in part be released, compounded or
            compromised and time or indulgence may be given by HSBC on behalf of
            the Public Offer Underwriters or any of them as regards any person
            under such liability without prejudicing the rights of any other
            Public Offer Underwriter or the relevant Public Offer Underwriter's
            other rights against such person or the relevant Public Offer
            Underwriter's rights against any other person under the same or a
            similar liability.

      6.3.3 Subject to the provisions of the Agreement Between Public Offer
            Underwriters (which shall not be binding on or confer any rights
            upon any persons other than the parties thereto), for the avoidance
            of doubt neither HSBC nor any of the Public Offer Underwriters shall
            be responsible or liable for any breach of the provisions of this
            Agreement by any of the Public Offer Underwriters (other than itself
            in its capacity as a Public Offer Underwriter).

      6.3.4 Save and except for any breach of any of its obligations under this
            Agreement and/or any loss or damage arising out of any gross
            negligence, wilful default or fraud on the part of HSBC or the
            relevant Public Offer Underwriter, no claim shall be made against
            HSBC or any of the Public Offer Underwriters or against any other of
            the Indemnified Parties (such right of the Indemnified Parties being
            held by the Public Offer Underwriters as trustee for the Indemnified
            Parties) by any of the Warrantors (and the Warrantors shall procure
            that none of its affiliates shall make any such claim), to recover
            any damage, cost, charge or expense which any of the Warrantors may
            suffer or incur by reason of or arising out of the carrying out by
            HSBC or any of the Public Offer Underwriters of the work to be done
            by any of them or the performance of their respective obligations
            hereunder or otherwise in

                                       31
<PAGE>

            connection with the Offer Documents, the Global Offering and any
            associated transactions (whether in performance of its duties as
            underwriters or otherwise). Specifically (but without prejudice to
            the generality of the foregoing), none of HSBC or the Public Offer
            Underwriters shall have any liability or responsibility whatsoever
            for any alleged insufficiency of the Offer Price or any dealing
            price of the Offer Shares or any announcements, documents,
            materials, communications or information whatsoever made, given,
            related or issued arising out of, in relation to or in connection
            with the Company or the Global Offering (whether or not approved by
            HSBC or any of the Public Offer Underwriters).

7     INDEMNITY

7.1   Each of the Warrantors (collectively, the "INDEMNIFYING PARTIES" and
      individually, an "INDEMNIFYING PARTY") jointly and severally undertakes to
      HSBC, the Public Offer Underwriters and each of them, for themselves and
      on trust for the other Indemnified Parties (as hereinafter defined), to
      indemnify and hold harmless HSBC and each of the Public Offer Underwriters
      and each of their respective subsidiaries and Affiliates and each of their
      respective representatives, partners, directors, officers, employees,
      assignees and agents (collectively, the "INDEMNIFIED PARTIES" and
      individually, an "INDEMNIFIED PARTY") (on an after-tax basis) against:

      (i)   all actions, suits, claims (whether or not any such claim involves
            or results in any actions or proceedings), demands, investigations,
            judgement, awards and proceedings, joint or several, from time to
            time instituted, made or brought or threatened or alleged to be
            instituted, made or brought against or otherwise involve, (together
            the "ACTIONS") and

      (ii)  all losses, liabilities and damage suffered and all payments,
            expenses (including legal expenses and taxes (including stamp duty
            and any penalties and/or interest arising in respect of any taxes)),
            costs and charges (including, without limitation, all payments,
            expenses, costs or charges suffered, made or incurred arising out
            of, in relation to or in connection with the investigation, dispute,
            defence or settlement of or response to any such Actions or the
            enforcement of any such settlement or any judgement obtained in
            respect of any such Actions) (together, the "LOSSES") which may be
            made or incurred or suffered by,

      an Indemnified Party (with such amount of indemnity to be paid to HSBC or
      the relevant Public Offer Underwriter to whom the Indemnified Party is
      related to cover all the Actions against and Losses suffered, made or
      incurred by such Indemnified Party) arising out of, in relation to or in
      connection with:

      (a)   the performance by HSBC or any of the Public Offer Underwriters of
            their respective obligations under this Agreement or the Offer
            Documents or otherwise in connection with the Global Offering; or

      (b)   the issue, publication, distribution or making available of any of
            the Offer Documents or the Formal Notice (including any amendments
            or supplements thereto) in accordance with the terms of this
            Agreement and/or any announcements, documents, materials,
            communications or information whatsoever made, given, released or
            issued arising out of, in relation to or in connection with the
            Company or the Global Offering (whether or not approved by HSBC or
            any of the Public Offer Underwriters); or

                                       32
<PAGE>
      (c)   the offer or transfer of the Offer Shares; or

      (d)   a breach or alleged breach on the part of any of the Indemnifying
            Parties of any of the provisions of any of the Underwriting
            Documents or an action or omission of an Indemnifying Party or any
            of their respective subsidiaries, directors, officers or employees
            resulting in a breach of any of the provisions of any of the
            Underwriting Documents; or

      (e)   any of the Warranties being untrue, inaccurate or having been
            breached or being alleged to be untrue, inaccurate or alleged to
            have been breached; or

      (f)   any untrue statement or alleged untrue statement of a fact contained
            in any Offer Documents, the Formal Notice or in any announcements,
            documents, materials, communications or information whatsoever made,
            given, released or issued arising out of, in relation to or in
            connection with the Company or the Global Offering (whether or not
            approved by HSBC (or any of the Public Offer Underwriters), or, in
            each case, any supplement or amendment thereto, or any omission or
            alleged omission to state therein a fact necessary in order to make
            the statements therein, in light of the circumstances under which
            they were made, not misleading, or any of the Offer Documents or the
            Formal Notice, or such announcement, document, material,
            communication or information or any such supplement or amendment
            thereto not containing any information material in the context of
            the Global Offering whether required by Law or not; or

      (g)   any breach or alleged breach of the Laws of any country or territory
            resulting from the distribution of any of the Offer Documents, the
            Formal Notice or any announcements, documents, materials,
            communications or information whatsoever made, given, released or
            issued arising out of, in relation to or in connection with the
            Company or the Global Offering (whether or not approved by HSBC or
            any of the Public Offer Underwriters) and/or any offer, sale or
            distribution of the Shares, otherwise than in accordance with and on
            the terms of those documents and the Underwriting Documents; or

      (h)   the Global Offering failing to comply with the requirements of the
            Securities and Futures (Stock Exchange Listing) Rules (Chapter 571V
            of the Laws of Hong Kong), the Listing Rules or any other applicable
            Laws; or

      (i)   any statement in any of the Offer Documents, the Formal Notice or
            any announcements, documents, materials, communications or
            information whatsoever made, given, released or arising out of, in
            relation to or in connection with the Company, the Selling
            Shareholder or the Global Offering (whether or not approved by HSBC
            or any of the Public Offer Underwriters) being or alleged to be
            defamatory of any person; or

      (j)   any failure or alleged failure by any of the Directors to comply
            with their respective obligations under the Listing Rules; or

      (k)   the breach or alleged breach by the Company, the Selling Shareholder
            or other members of the Group of applicable Laws,

      provided that the indemnity provided for in this Clause 7.1 shall not
      apply in respect of an Indemnified Party to the extent where any such
      Action made against, or any such Loss suffered by, such Indemnified Party
      arises out of or in connection with fraud, gross negligence or wilful
      default on the part of such Indemnified Party; and any settlement or

                                       33
<PAGE>

      compromise of or consent to the entry of judgement with respect to any
      Action or Loss by any of the Indemnified Parties shall not prejudice any
      right, claim, action or demand any of the Indemnified Parties may have or
      make against the Warrantors or any of them under this Clause 7.1 or
      otherwise under this Agreement.

7.2   If any of the Warrantors becomes aware of any claim which may give rise to
      a liability under the indemnity provided under Clause 7.1, such party
      shall promptly give notice thereof to the other parties in writing.

7.3   Counsel to the Indemnified Parties shall be selected by HSBC. The Company
      and/or the Selling Shareholder, as the case may be, may participate at its
      own expense in the defence of any such Action, provided however, that
      counsel to the Company and/or the Selling Shareholder shall not (except
      with the consent of the Indemnified Parties) also be counsel to the
      Indemnified Parties.

7.4   None of the Indemnifying Parties shall, without the prior written consent
      of the Indemnified Parties, settle or compromise or consent to the entry
      of any judgement with respect to any Action, commenced or threatened, or
      any claim whatsoever in respect of which indemnification or contribution
      could be sought under this Clause 7 (whether or not the Indemnified
      Parties are actual or potential parties thereto).

7.5   Any settlement or compromise by any Indemnified Party in relation to any
      claim shall be without prejudice to, and without (other than any
      obligations imposed on it by Law) any accompanying obligation or duty to
      mitigate the same in relation to, any claim, action or demand it may have
      or make against any of the Indemnifying Parties under this Agreement. The
      Indemnified Parties are not required to obtain consent from any of the
      Indemnifying Parties with respect to such settlement or compromise. The
      rights of the Indemnified Parties herein are in addition to any rights
      that each Indemnified Party may have at Law or otherwise and the
      obligations of the Indemnifying Parties herein shall be in addition to any
      liability which the indemnifying Parties may otherwise have.

7.6   If an Indemnifying Party enters into any agreement or arrangement with any
      adviser for the purpose of or in connection with the Global Offering, the
      terms of which provide that the liability of the adviser to the
      Indemnifying Party or any other person is excluded or limited in any
      manner, and any of the Indemnified Parties may have joint and/or several
      liability with such adviser to the Indemnifying Party or to any other
      person arising out of the performance of its duties in connection with the
      Global Offering, the Indemnifying Party shall:

      7.6.1 not be entitled to recover any amount from any Indemnified Party
            which, in the absence of such exclusion or limitation, the
            Indemnified Party would have been entitled to recover from such
            Indemnified Party; and

      7.6.2 indemnify the Indemnified Parties in respect of any increased
            liability to any third party which would not have arisen in the
            absence of such exclusion or limitation; and

      7.6.3 take such other action as the Indemnified Parties may require to
            ensure that the Indemnified Parties are not prejudiced as a
            consequence of such agreement or arrangement.

7.7   No claim shall be made against any Indemnified Party by any Indemnifying
      Party to recover any Losses incurred by the Indemnifying Party in
      connection with or arising out of the services rendered or duties
      performance by the Indemnified Party under this

                                       34
<PAGE>

      Agreement or otherwise in connection with the Global Offering and the
      application for the listing of, and permission to deal in, the Shares on
      the Stock Exchange unless and to the extent that they are finally
      judicially determined by a court of competent jurisdiction to have arisen
      primarily as a result of fraud, gross negligence or wilful default(1) of
      the relevant Indemnified Party.

7.8   For the avoidance of doubt, the indemnity under this Clause 7 shall cover
      all costs, charges and expenses which any Indemnified Party may incur or
      pay in disputing, settling or compromising any Action to which the
      indemnity may relate and in establishing its right to indemnification
      under this Clause 7.

7.9   All amounts subject to indemnity under this Clause 7 shall be paid by the
      Indemnifying Party as and when they are incurred within 10 Business Days
      of a written notice demanding payment being given to the relevant
      Indemnifying Party by or on behalf of an Indemnified Party.

7.10  This Clause 7 shall remain in full force and effect notwithstanding the
      completion of the Global Offering in accordance with the terms of this
      Agreement or the termination of this Agreement.

8     CONTRIBUTION

8.1   If for any reason the undertaking to pay in Clause 7 is unavailable or
      insufficient to indemnify and hold harmless an Indemnified Party in
      respect of any Action or Loss referred to therein, then each Indemnifying
      Party, in lieu of its obligations under Clause 7, shall contribute to the
      amount paid or payable by such Indemnifying Party as a result of such
      Action or Loss:

      8.1.1 in such proportion as is appropriate to reflect the relative
            benefits received by the Company and the Selling Shareholder on the
            one hand and the Public Offer Underwriters on the other from the
            Public Offer; or

      8.1.2 if the allocation provided by Clause 8.1.1 above is not permitted by
            applicable Law, in such proportion as is appropriate to reflect not
            only the relative benefits referred to in Clause 8.1.1 above but
            also the relative fault of the Company and the Selling Shareholder
            on the one hand and the Public Offer Underwriters on the other in
            connection with the statements or omissions that resulted in such
            Action or Loss, as well as any other relevant equitable
            considerations.

8.2   The relative benefits received by the Company and the Selling Shareholder
      on the one hand and the Public Offer Underwriters on the other shall be
      deemed to be in the same respective proportions as the net proceeds from
      the Public Offer (before deducting expenses) received by the Company and
      the Selling Shareholder bear to the total commissions received by the
      Public Offer Underwriters, as set forth in Clause 4.1.

8.3   The relative fault of the Company and the Selling Shareholder on the one
      hand and the Public Offer Underwriters on the other shall be determined by
      reference to, among other things, whether the untrue or alleged untrue
      statement of a fact or the omission or alleged omission to state a fact
      relates to information supplied by the Company or the Selling Shareholder
      on the one hand or by the Public Offer Underwriters on the other and the

                                       35
<PAGE>

      parties' relative intent, knowledge, access to information and opportunity
      to correct or prevent such statement or omission.

8.4   The parties hereto agree that it would not be just and equitable if
      contribution pursuant to this Clause 8 were determined by pro rata
      allocation (even if the Public Offer Underwriters were treated as one
      entity for such purposes) or by any other method of allocation that does
      not take account of the equitable considerations referred to in this
      Clause 8. In no event shall a Public Offer Underwriter be required to
      contribute any amount in excess of the amount by which the total
      commissions received by such Public Offer Underwriter with respect to the
      Public Offer exceeds the amount of any Losses that such Public Offer
      Underwriter has otherwise been required to pay by reason of such untrue or
      alleged untrue statement or omission or alleged omission. No person guilty
      of fraudulent misrepresentation (with the meaning of Section 11 (f) of the
      US Securities Act) shall be entitled to contribution from any person who
      was not guilty of such fraudulent misrepresentation. The Public Offer
      Underwriters' obligations to contribute pursuant to this Clause 8 are
      several in proportion to their respective purchase or subscription
      obligations hereunder (and not joint or joint and several).

8.5   The indemnity and contribution agreements contained in this Clause 8 are
      not exclusive and shall not limit any rights or remedies which may
      otherwise be available to any Indemnified Party at Law or in equity.

9     TERMINATION IN EXCEPTIONAL CIRCUMSTANCES

9.1   If, at any time prior to 8:00 a,m. on the Force Majeure Expiry Date:

      9.1.1 there has been a breach of any of the Warranties or there has been a
            breach by the Company or the Selling Shareholder of any of the
            provisions of this Agreement; or

      9.1.2 any matter has arisen or has been discovered which would, had it
            arisen immediately before the Prospectus Date, not having been
            disclosed in the Prospectus, constitute an omission therefrom; or

      9.1.3 any statement contained in the Prospectus has become or been
            discovered to be untrue, incorrect or misleading in any respect; or

      9.1.4 there shall have occurred any event, act or omission which gives or
            is likely to give rise to any liability of any of the Company or the
            Selling Shareholder pursuant to the indemnities referred to in
            Clause 7; or

      9.1.5 there shall have been any adverse change or prospective adverse
            change in the business or the financial or trading position of any
            member of the Group; or

      9.1.6 there shall have developed, occurred, happened or come into effect
            or series of events, matters or circumstances concerning or relating
            to:

            (i)   any change in, or any event or series of events likely to
                  result in any change in, local, national or international
                  financial, political, economic, military, industrial, fiscal,
                  regulatory, currency or market conditions or equity securities
                  or stock or other financial market conditions or any monetary
                  or trading settlement system (including, without limitation,
                  any change in the system under which the value of the Hong
                  Kong currency is linked to that of

                                       36
<PAGE>
                  the United States) in Hong Kong, the Cayman Islands, the US,
                  the United Kingdom, Japan or the PRC; or

            (ii)  any new Law or change in existing Laws or any change in the
                  interpretation or application thereof by any court or other
                  competent authority in Hong Kong, the Cayman Islands, the US,
                  the United Kingdom, Japan or the PRC; or

            (iii) any event of force majeure affecting Hong Kong, the Cayman
                  Islands, the US, the United Kingdom, Japan or the PRC
                  including, without limiting the generality thereof, any act of
                  God, war, outbreak or escalation of hostilities (whether or
                  not war is declared) or act of terrorism, or declaration of a
                  national or international emergency or war, riot, public
                  disorder, civil commotion, economic sanctions, fire, flood,
                  explosion, epidemic, outbreak of an infectious disease,
                  calamity, crisis, strike or lock-out (whether or not covered
                  by insurance); or

            (iv)  the imposition of any moratorium, suspension or restriction on
                  trading in securities generally on the Stock Exchange or the
                  New York Stock Exchange or any suspension of trading of any of
                  the securities of the Company on any exchange or
                  over-the-counter market or any major disruption of any
                  securities settlement or clearing services in the US or Hong
                  Kong or on commercial banking activities in Hong Kong or New
                  York, due to exceptional financial circumstances or otherwise;
                  or

            (v)   a change or development involving a prospective change in
                  taxation or exchange control (or the implementation of any
                  exchange control) in Hong Kong, the Cayman Islands, the US or
                  the PRC,

            which, in the sole opinion of HSBC (for itself and on behalf of the
            Public Offer Underwriters):

            (i)   is or will be, or is likely to be, materially adverse to the
                  general affairs, management, business, financial, trading or
                  other condition or prospects of the Group or to any present or
                  prospective shareholder of the Company in its capacity as
                  such; or

            (ii)  has or will have or is likely to have a material adverse
                  impact on the success of the Global Offering or the level of
                  Offer Shares applied for or accepted or purchased or the
                  distribution of the Offer Shares or dealings in the Shares in
                  the secondary market; or

            (iii) makes it impracticable, inadvisable or inexpedient to proceed
                  with the Public Offer and/or the International Placing on the
                  terms and in the manner contemplated in the Offer Documents,

      then HSBC, in its sole and absolute discretion, may, on behalf of the
      Public Offer Underwriters, upon giving notice to the Company and the
      Selling Shareholder made pursuant to the provisions of Clause 10.16 on or
      prior to 8:00 a.m. on the Force Majeure Expiry Date (with a copy of such
      notice to each of the Selling Shareholder, the Executive Directors and the
      other Public Offer Underwriters), terminate this Agreement with immediate
      effect.

9.2   Upon the termination of this Agreement pursuant to the provisions of
      Clauses 9.1 or 2.1:

                                       37
<PAGE>

      9.2.1  each of the parties hereto shall cease to have any rights or
             obligations under this Agreement and no party to this Agreement
             shall be under any liability to any other party in respect of this
             Agreement and no party have any claim against any other party to
             this Agreement for costs, damages, compensation or otherwise, save
             in respect of the provisions of this Clause 9 and Clauses 7, 8 and
             10, any antecedent breaches under this Agreement and any rights or
             obligations which may have accrued under this Agreement prior to
             such termination; and

      9.2.2  the Selling Shareholder shall pay to HSBC all fees, costs and
             expenses set out in Clauses 4.2, 4.3, and 4.4 as soon as
             practicable and in any event within 10 Business Days from the date
             of receipt of written, demand for payment of the same; and

      9.2.3  the Selling Shareholder shall refund forthwith all payments made by
             the Public Offer Underwriters or any of them pursuant to Clause
             3.4.6 (to the extent received) and/or by the successful applicants
             under valid Applications (in the latter case, the Company and the
             Selling Shareholder shall procure that the Sub-Registrars and the
             Nominee despatch refund cheques to all applicants under the Public
             Offer in accordance with the Sub-Registrars Agreement and the
             Receiving Banker Agreement).

10    GENERAL PROVISIONS

10.1  RELEASE

      Any liability to any party under this Agreement may in whole or in part be
      released, compounded or compromised, and time or indulgence may be given,
      by that party (and, where any liability is owed to any Public Offer
      Underwriters, by HSBC on behalf of any or all of the Public Offer
      Underwriters) in its absolute discretion as regards any person under such
      liability without in any way prejudicing or affecting that party's rights
      against any other person under the same or a similar liability, whether
      joint and several or otherwise.

10.2  REMEDIES AND WAIVERS

      10.2.1 No failure or delay by any party hereto in exercising any right or
             remedy provided by Law under or pursuant to this Agreement shall
             impair such right or remedy or operate or be construed as a waiver
             or variation of it or preclude its exercise at any subsequent time
             and no single or partial exercise of any such right or remedy shall
             preclude any other or further exercise of it or the exercise of any
             other right or remedy.

      10.2.2 The rights, powers and remedies provided in this Agreement are
             cumulative and not exclusive of any rights, powers and remedies
             (whether provided by Law or otherwise.

10.3  SUCCESSORS AND ASSIGNMENT

      10.3.1 This Agreement shall be binding upon, and inure solely to the
             benefit of the parties hereto and their respective heirs,
             executors, administrators, successors and permitted assigns, and no
             other person shall acquire or have any right under or by virtue of
             this Agreement.

      10.3.2 Each of HSBC and the Public Offer Underwriters may assign or
             transfer all or any part of the benefits of, or interest or right
             in or under this Agreement.

                                       38
<PAGE>

      10.3.3 Save as provided in Clause 10.3.2, no party hereto may assign or
             transfer all or any part of the benefits of, or interest or right
             in or under this Agreement.

      10.3.4 Obligations under this Agreement shall not be assignable.

10.4  FURTHER ASSURANCE

      Each of the parties hereto undertakes with the other parties hereto that
      it shall execute and perform and procure that there are executed and
      performed such further documents and acts as the other parties hereto may
      reasonably require to give effect to the provisions of this Agreement.

10,5  Entire agreement and variation

      10.5.1 Save as otherwise agreed by the relevant parties, this Agreement,
             together with any document referred to hefein as being in the
             agreed form, constitutes the entire agreement between the Company,
             the Selling Shareholder, the Executive Directors, HSBC and the
             Public Offer Underwriters relating to the underwriting of the
             Public Offer to the exclusion of any terms implied by Law which may
             be excluded by contract. Save as otherwise agreed by the relevant
             parties, this Agreement supersedes all previous agreements or
             understandings relating to the underwriting of the Public Offer
             which shall cease to have any further force or effect and no party
             hereto has entered into this Agreement in reliance upon any
             representation, warranty, agreement or undertaking which is not set
             out or referred to in this Agreement.

      10.5.2 No party shall have any right of action (except in the case of
             fraud) against any other party to this Agreement arising out of or
             in connection with any representation, warranty, agreement or
             undertaking which is not set out in this Agreement except to the
             extent such representation, warranty, agreement or undertaking is
             repeated in this Agreement or the other documents or agreements
             referred to herein which are incorporated by reference in this
             Agreement.

      10.5.3 No variation of this Agreement shall be valid unless it is in
             writing and signed by or on behalf of each of the parties hereto.
             The expression "VARIATION" shall include any variation, supplement,
             deletion or replacement however effected.

10.6  TIME OF ESSENCE

      Any time, date or period referred to in this Agreement may be extended by
      mutual written agreement between the Company (for itself and for and on
      behalf of the Selling Shareholder and the Executive Directors) and HSBC
      (for itself and for and on behalf of the Public Offer Underwriters), but
      as regards any time, date or period originally fixed or any time, date or
      period so extended as aforesaid, time shall be of the essence.

10.7  ANNOUNCEMENTS

      10.7.1 Subject to Clause 10.7.2, no announcement or public communication
             concerning this Agreement or the subject matter hereof shall be
             made by any of the parties hereto (and each party shall procure
             that their respective directors, officers and agents shall comply
             with the restrictions of this Clause 10.7) without the prior
             written approval of HSBC.

                                       39
<PAGE>

      10.7.2 Any party hereto may make an announcement or public communication
             concerning this Agreement, the subject matter hereof or any
             ancillary matter hereto if and to the extent:

              (i)   required by Law; or

              (ii)  required by any Governmental Authority to which such party
                    is subject or submits, wherever situated, including, without
                    limitation, the Stock Exchange and the SFC whether or not
                    the requirement has the force of Law,

            provided that in such case, the relevant party shall first consult
            with HSBC in so far as it is reasonably practicable to do so.

10.8  CONFIDENTIALITY

      10.8.1 Subject to Clause 10.8.2, each party hereto shall, and shall
             procure that their respective directors, officers and agents will,
             treat as strictly confidential all information received or obtained
             as a result of entering into or performing this Agreement which
             relates to:

              (i)   the provisions of this Agreement;

              (ii)  the negotiations relating to this Agreement;

              (iii) the subject matter of this Agreement; or

              (iv)  the other parties.

      10.8.2 Any party hereto may disclose, or permit its directors, officers
             and agents to disclose, information which would otherwise be
             confidential if and to the extent:

              (i)   required by Law;

              (ii)  required by any Governmental Authority to which such party
                    is subject or submits, wherever situated, including, without
                    limitation, the Stock Exchange and the SFC whether or not
                    the requirement for information has the force of Law;

              (iii) required to vest the full benefit of this Agreement in such
                    party;

              (iv)  disclosed to the professional advisers and auditors of such
                    party under a duty of confidentiality;

              (v)   the information has come into the public domain through no
                    fault of such party;

              (vi)  the information becomes available to such party on a
                    non-confidential basis from a person not known by such party
                    to be bound by a confidentiality agreement with any of the
                    other parties hereto or to be otherwise prohibited from
                    transmitting the information;

              (vii) the other parties have given prior written approval to the
                    disclosure, such approval not to be unreasonably withheld or
                    delayed; or

              (viii) (where the disclosure is otherwise than by HSBC or its
                    directors, officers or agents) HSBC has given prior written
                    approval to the disclosure.

                                       40
<PAGE>

            provided that in relation to (i), (ii) and (iii) above, such party
            shall first consult with HSBC prior to making such disclosure.

10.9  RIGHTS OF CONTRIBUTION

      The Selling Shareholder and the Executive Directors hereby irrevocably and
      unconditionally:

      10.9.1 (until the Underwriters' claims have become fully satisfied) waives
             any right of contribution or recovery or any claim, demand or
             action it may have or be entitled to take against the Company as a
             result of any Action made or taken against it/him, whether alone
             or jointly with the Company, as the case may be, in consequence of
             its/his entering into this Agreement or otherwise with respect to
             any act or matter relating to the Global Offering; and

      10.9.2 acknowledges and agrees that the Company shall have no liability to
             it whatsoever under the provisions of this Agreement or otherwise
             in respect of any act or matter relating to the Global Offering.

10.10 INVALIDITY

      If at any time any provision of this Agreement is or becomes illegal,
      invalid or unenforceable in any respect under the Law of any jurisdiction,
      that shall not affect or impair:

      10.10.1 the legality, validity or enforceability in that jurisdiction of
              any other provision of this Agreement; or

      10.10.2 the legality, validity or enforceability under the Law of any
              other jurisdiction of that or any other provision of this
              Agreement.

10.11 COUNTERPARTS

      This Agreement may be executed in any number of counterparts and by the
      parties hereto on separate counterparts, but shall not be so effective
      until each party has executed at least one counterpart. Each counterpart
      each of which when so executed and delivered shall be an original, but all
      of which together shall constitute one and the same instrument.

10.12 GOVERNING LAW

      This Agreement shall be governed by and construed in accordance with the
      laws of Hong Kong.

10.13 DISPUTE RESOLUTION

      10.13.1 The parties hereto unconditionally and irrevocably agree that the
              courts of Hong Kong shall have non-exclusive jurisdiction to
              settle any disputes or differences (including claims for
              set-off and counterclaims) arising out of or in connection
              with this Agreement, including any dispute regarding the
              validity or existence of this Agreement (each a "Dispute").
              Each of the parties submits to the non-exclusive jurisdiction
              of the Hong Kong courts in connection therewith and
              unconditionally and irrevocably waives any objection which it
              may have now or hereafter to the laying of any such proceeding
              in the Hong Kong courts including any right to invoke any
              claim that such proceeding have been brought in an inconvenient
              forum.

      10.13.2 The submission to jurisdiction pursuant to Clause 10.13.1 shall
              not (and shall not be construed so as to) limit the right of any
              of the parties to commence any

                                       41
<PAGE>

            proceeding against any other party in whatsoever jurisdictions shall
            to it seem fit nor shall the taking of any proceeding in any one or
            more jurisdictions preclude the taking of any proceeding in any
            other jurisdiction, whether concurrently or not.

    10.13.3 Notwithstanding Clause 10.13.1, each of the parties hereto
            unconditionally and irrevocably agrees that each of HSBC and/or the
            Public Offer Underwriters shall have the option to refer any Dispute
            to be finally resolved by arbitration in accordance with this Clause
            10.13.3. Upon written notice by HSBC and/or the Public Offer
            Underwriters pursuant to this Clause 10.13.3, such Dispute shall be
            referred to and finally resolved by arbitration in accordance with
            the UNCITRAL Arbitration Rules (the "RULES") as in force from time
            to time and as may be amended by the rest of this Clause 10.13.

            There shall be three arbitrators. The appointing authority shall be
            the Hong Kong International Arbitration Centre ("HKIAC").

            Where there are multiple parties, whether as claimant or as
            respondent, the multiple claimants, jointly, shall appoint a
            claimants-appointed arbitrator, and the multiple respondents,
            jointly, shall appoint a respondents-appointed arbitrator for the
            purpose of Article 7(1) of the Rules. The claimants-appointed
            arbitrator and the respondents-appointed arbitrator shall then
            choose the third arbitrator who will act as chairman of the arbitral
            tribunal.

            The seat of arbitration shall be Hong Kong, and the arbitration
            shall be administered by HKIAC.

            The governing law of the arbitration proceedings shall be the laws
            of Hong Kong.

            The language to be used in the arbitral proceedings shall be
            English.

            By agreeing to arbitration pursuant to this Clause 10.13.3, the
            parties hereto irrevocably waive their right to any form of appeal,
            review or recourse to any state court or other judicial authority,
            insofar as such waiver may be validly made and to the fullest extent
            permitted by applicable Laws.

            The award shall be given by a majority decision. If there be no
            majority, the award shall be made by the chairman of the arbitral
            tribunal alone.

    10.13.4 Without prejudice to the provisions of Clause 10.13.5 or Clause
            10.13.6, each of the parties unconditionally and irrevocably agrees
            that any writ, judgement or other notice of process shall, to the
            fullest extent permitted by applicable Laws, be validly and
            effectively served on it if delivered to its address referred to in
            this agreement and marked for the attention of the person referred
            to in that Clause or to such other person or address in Hong Kong as
            may be notified by the relevant party (as the case may be) to the
            other parties hereto pursuant to the provisions of this agreement.

    10.13.5 The Selling Shareholder irrevocably appoints Mr. Jackie Wah of c/o
            15th Floor, China Merchants Tower, Shun Tak Centre, 168-200
            Connaught Road Central, Hong Kong as its authorised agent for the
            service of process in Hong Kong in connection with this Agreement.
            Service of process upon Mr. Jackie Wah at the above address shall be
            deemed, for all purposes, to be due and effective service, and shall
            be deemed completed whether or not forwarded to or received by any
            such appointer. If for any reason such agent shall cease to be the
            Selling

                                       42
<PAGE>

            Shareholder's agent for the service of process, the Selling
            Shareholder shall forthwith appoint a new agent for the service of
            process in Hong Kong acceptable to HSBC and deliver to each of the
            other parties hereto a copy of the new agent's acceptance of that
            appointment within [14] days, failing which HSBC shall be entitled
            to appoint such new agent for and on behalf of the Selling
            Shareholder and such appointment shall be effective upon the giving
            notice of such appointment to the Selling Shareholder. Nothing in
            this Agreement shall affect the right to serve process in any other
            manner permitted by Law.]

    10.13.6 Where proceedings are commenced by any party in any jurisdiction
            other than Hong Kong pursuant to Clause 10.13.2, upon being given
            notice of such proceedings in writing, the party against whom such
            proceedings have been brought shall immediately appoint an agent to
            accept service of process in that jurisdiction and shall give notice
            to the other party, as the case may be, of the details and address
            for service of such agent.

10.14 IMMUNITY

      To the extent that any party hereto may in any jurisdiction claim for
      itself or its assets immunity from suit, execution, attachment (whether in
      aid of execution, before judgement or otherwise) or other legal process or
      to the extent that in any such jurisdiction there may be attributed to
      itself or its assets such immunity (whether or not claimed), such party
      hereby irrevocably agrees not to claim and irrevocably waives such
      immunity to the full extent permitted by applicable Laws.

10.15 JUDGEMENT CURRENCY INDEMNITY

      The obligation of any party (the "PAYING PARTY") in respect of any sum due
      to any other party shall, notwithstanding any judgement in a currency
      other than Hong Kong dollars, not be discharged until the first Business
      Day, following receipt by the party to receive the payment (the "RECEIVING
      PARTY") (as the case may be) of any sum adjudged to be so due in such
      other currency, on which (and only to the extent that) the receiving party
      (as the case may be) may in accordance with normal banking procedures
      purchase Hong Kong dollars with such other currency. If the Hong Kong
      dollars so purchased are less than the sum originally due to such party
      (as the case may be) hereunder, the paying party agree, as a separate
      obligation and notwithstanding any such judgement, to indemnify the
      receiving party (as the case may be) against such loss. If the Hong Kong
      dollars so purchased are greater than the sum originally due to the
      receiving party (as the case may be) hereunder, the receiving party (as
      the case may be) agrees to pay to the paying party an amount equal to the
      excess of the dollars so purchased over the sum originally due to it
      hereunder.

10.16 NOTICES

      10.16.1 Any notice or other communication given or made under or in
              connection with the matters contemplated by this Agreement shall
              be in writing and shall be in the English language.

      10.16.2 Any such notice or other communication shall be addressed as
              provided in Clause 10.16.3 and, if so addressed, shall be deemed
              to have been duly given or made as follows:

              (i) if sent by personal delivery, upon delivery at the address of
                  the relevant party;

                                       43
<PAGE>

            (ii)  if sent by post, on the third Business Day after the date of
                  posting;

            (iii) if sent by facsimile, on receipt of confirmation of
                  transmission.

     10.16.3 The relevant addresses and facsimile numbers of each party hereto
             for the purposes of this Agreement, subject to Clause 10,16.4, are:

<TABLE>
<CAPTION>
NAME OF PARTY                       ADDRESS                             FACSIMILE NO.
<S>                                 <C>                                <C>
Nam Tai Electronic & Electrical     15th Floor, China Merchants        (852) 2263 1223
Products Limited                    Tower
                                    Shun Tak Centre
                                    Nos. 168-200 Connaught Road
                                    Central
                                    Hong Kong

Attention: Mr. Joseph Hsu           15th Floor, China Merchants
                                    Tower
                                    Shun Tak Centre
                                    Nos.168-200 Connaught Road
                                    Central
                                    Hong Kong

Nam Tai Electronics, Inc.           15th Floor, China Merchants        (852) 2263 1223
                                    Tower
                                    Shun Tak Centre
                                    Nos.168-200 Connaught Road
                                    Central
                                    Hong Kong

Attention: Mr. Jackie Wan

Any of:

Wong Kuen Ling                      15th Floor, China Merchants        (852) 2263 1223
                                    Tower
                                    Shun Tak Centre
                                    Nos.168-200 Connaught Road
                                    Central
                                    Hong Kong

Guy Jean Francois Bindels           15th Floor, China Merchants        (852) 2263 1223
                                    Tower
                                    Shun Tak Centre
                                    Nos.168-200 Connaught Road
                                    Central
                                    Hong Kong
</TABLE>

                                       44
<PAGE>

<TABLE>
<S>                                 <C>                                <C>
The Hongkong and Shanghai           The Hongkong and Shanghai          (852) 2845 5654
Banking Corporation Limited         Banking Corporation Limited
                                    Level 15
                                    1 Queen's Road Central
                                    Hong Kong

Attention: Ronald Tham

The Public Offer Underwriters       The Hongkong and Shanghai          (852) 2845 5654
                                    Banking Corporation Limited
c/o The Hongkong and Shanghai       Level 15
Banking Corporation Limited         1 Queen's Road Central
                                    Hong Kong

Attention: Ronald Tham
</TABLE>

    10.16.4 A party may notify the other parties to this Agreement of a change
            to its relevant address or facsimile number for the purposes of
            Clause 10.16.3, provided that such notification shall only be
            effective on:

            (i)   the date specified in the notification as the date on which
                  the change is to take place; or

            (ii)  if no date is specified or the date specified is less than
                  five Business Days after the date on which notice is given,
                  the date falling five Business Days after notice of any such
                  change has been given.

    10.16.5 All references in this Agreement to notices given to or received
            from, consents or requests from or waivers by or consultations with
            the Public Offer Underwriters shall be to notices given to or
            received from, consents or requests from or waivers by or
            consultations with HSBC, on behalf of the Public Offer Underwriters.

    10.16.6 All references in this Agreement to notices given to or received
            from, consents or requests from or waivers by or consultations with
            the Executive Directors and/or the Selling Shareholder (as the case
            may be) shall be to notices given to or received from, consents or
            requests from or waivers by or consultations with the Company, on
            behalf of the Executive Directors and/or the Selling Shareholder (as
            the case may be).

10.17 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND OBLIGATIONS

      The respective indemnities, covenants, undertakings, agreements,
      representations, warranties and other statements of the Company, the
      Selling Shareholder and the Executive Directors or any of them as set
      forth in this Agreement or made by or on behalf of any of them pursuant to
      this Agreement, shall remain in full force and effect notwithstanding
      completion of the Global Offering and regardless of any investigation (or
      any statement as to the results thereof) made by or on behalf of any of
      the Public Offer Underwriters, any of their respective Affiliates or any
      of their respective representatives, directors, officers, agents,
      employees, advisers. Clauses 4.2, 4.3, 7,8,10.7,10.8 and 10.9 shall
      survive completion of the Global Offering.

                                       45
<PAGE>

10.18 NO WITHHOLDING BY THE COMPANY, THE SELLING SHAREHOLDER AND THE EXECUTIVE
      DIRECTORS

      All payments by or on behalf of each of the Company, the Selling
      Shareholder and the Executive Directors under or in connection with this
      Agreement (including deductions from the Public Offer Application Moneys)
      shall be paid without set-off or counterclaim, and free and clear of and
      without deduction or withholding for or on account of, any present or
      future taxes, levies, imposts, funds, duties, fees, assessments or other
      charges of whatever nature, imposed, levied, collected, withheld or
      assessed by any Governmental Authority or any interest, penalties or
      similar liabilities with respect thereto ("TAXES"). If any Taxes are
      required, by law to be deducted or withheld in connection with any such
      payment, the Company, the Selling Shareholder and the Executive Directors,
      as the case may be, will increase the amount so paid so thai the amount of
      such payment received by the payee is such amount as the payee would have
      received if no such deduction or withholding had been made.

10.19 NO TAXATION IN THE HANDS OF HSBC, THE PUBLIC OFFER UNDERWRITERS AND THE
      INDEMNIFIED PARTIES

      If any sum payable under or in connection with this Agreement to HSBC or
      any of the Public Offer Underwriters or any of the Indemnified Parties, or
      any sum payable under Clause 4 (other than under Clauses 4.1 and 4.2),
      shall be subject to Taxes in the hands of any of them or taken into
      account as a receipt in computing the taxable profits or losses of any of
      them, the sum payable shall be increased to such sum as will ensure that,
      after payment of any Taxes which would not have arisen but for that sum,
      HSBC or such Public Offer Underwriter or such Indemnified Party shall be
      left with a sum equal to the sum that it would have received in the
      absence of such Taxes.

IN WITNESS WHEREOF this Agreement has been entered into the day and year first
before written.

                                       46
<PAGE>

                                   SCHEDULE 1

                          THE PUBLIC OFFER UNDERWRITERS

<TABLE>
<CAPTION>
NAME                                                  ADDRESS
<S>                                                   <C>
The Hongkong and Shanghai Banking Corporation         Level 15
Limited                                               1 Queen's Road Central
                                                      Hong Kong

BNP Paribas Peregrine Capital Limited                 36th Floor, Asia Pacific Finance Tower
                                                      3 Garden Road
                                                      Central
                                                      Hong Kong

Nomura International (Hong Kong) Limited              30th Floor, Two International Finance Centre
                                                      8 Finance Street
                                                      Hong Kong

Cazenove Asia Limited                                 5001, One Exchange Square
                                                      8 Connaught Place, Central
                                                      Hong Kong

DBS Asia Capital Limited                              16th Floor, Man Yee Building
                                                      68 Des Voeux Road
                                                      Central
                                                      Hong Kong

VC CEF Capital Limited                                38th Floor, The Centrium
                                                      60 Wyndham Street
                                                      Central
                                                      Hong Kong

BNP Paribas Peregrine Capital Limited                 36th Floor, Asia Pacific Finance Tower
                                                      3 Garden Road Central
                                                      Hong Kong
</TABLE>

                                       47

<PAGE>

                                   SCHEDULE 2

                            THE EXECUTIVE DIRECTORS

<TABLE>
<CAPTION>
NAME                                                  ADDRESS
<S>                                                   <C>
Wong Kuen Ling                                        Flat B, 33rd Floor, Block 11
                                                      Tierra Verde
                                                      33 Tsing King Road
                                                      Tsing Yi
                                                      New Territories
                                                      Hong Kong

Guy Jean Francois Bindels                             Flat B, 33rd Floor, Block 11
                                                      Tierra Verde
                                                      33 Tsing King Road
                                                      TSING YI
                                                      New Territories
                                                      Hong Kong
</TABLE>

                                       48

<PAGE>

                                   SCHEDULE 3

                          THE REORGANISATION DOCUMENTS

THE documents referred to in paragraph 4 of the section headed "Further
information about the Company" in Appendix V to the Prospectus including the
following:

(a)   Sale & Purchase Agreement dated 30 December 2002 regarding the transfer of
      equipment from NTSZ to Zastron.

(b)   Supplemental agreement dated 26 March 2004 between NTSZ and Zastron.

(c)   Certificate of Incorporation of the Company.

(d)   - First Board Minutes of the Company dated 13 June 2003

      - Register of Members of the Company dated 16 June 2003

(e)   Sale & Purchase Agreement dated 3 July 2003 regarding the transfer of
      interest in NTSZ.

(f)   approval document issued by the Ministry of Commerce of the PRC dated 3
      December 2003 ([2003] 1108).

(g)   Certificate of Approval for Establishment of Enterprises with Investment
      of Taiwan, Hong Kong, Macao and Overseas Chinese in the People's Republic
      of China dated 4 December 2003 ([1998] 0041).

(h)   Business Licence issued by Shenzhen Administration for Industry and
      Commerce to NTSZ dated 11 December 2003.

(i)   Memorandum of Understanding dated 26 March 2004 between NTSZ and NTEEPHK.
      (j) Consultancy Agreement dated 1 October 2003 entered between NTSZ and
      NTIC,

(k)   Approval document issued by the Macao Trade and Investment Promotion
      Institute regarding the transfer of NTIC from NTE Inc. to the Company.

(l)   Sale & Purchase Agreement dated 24 March 2004 regarding transfer of equity
      in NTIC.

                                       49

<PAGE>

                                   SCHEDULE 4

                       THE CONDITIONS PRECEDENT DOCUMENTS

1     A certified copy of the resolutions of the shareholders of the Company
      referred to in paragraph 3 of Appendix V to the Prospectus.

2     A certified copy of the resolution(s) of the Directors or a committee of
      the Board of Directors:

2.1   approving and authorising execution, delivery and performance of or
      confirming this Agreement and each of the Operative Documents to which the
      Company is a party together with all other agreements and documents
      necessary for the Global Offering;

2.2   approving the listing of the Shares on the Stock Exchange;

2.3   approving and authorising the issue of the Preliminary Offering Circular
      on behalf of the Company or ratifying the same; and

2.4   approving and authorising the issue and the registration with the
      Registrar of Companies in Hong Kong and the filing with the Registrar of
      Companies in the Cayman Islands of the Public Offer Documents.

3     A certified copy of the resolutions of the directors of the Selling
      Shareholder, inter alia, approving and authorising execution, delivery and
      performance of or confirming this Agreement and each of the Operative
      Documents to which it is a party,

4     Certified copies of the Operative Agreements except for the Price
      Determination Agreement.

5     A certified copy of each of the service contracts of the Directors.

6     Certified copies of the responsibility letters, powers of attorney and
      statements of interests signed by all the Directors in forms previously
      agreed by HSBC.

7     Two printed copies of each of the Public Offer Documents each duly signed
      by two Directors or their respective duly authorised agents and, if signed
      by their respective duly authorised agents, certified copies of the
      relevant authorisation document.

8     The Verification Notes signed by or on behalf of each person to whom
      responsibility is therein assigned (other than HSBC and its legal
      advisers).

9     One signed original or certified copy of the accountants' report dated the
      Prospectus Date by the Reporting Accountants, the text of which is
      contained in Appendix I to the Prospectus.

10    One signed original of the statement of adjustments and letter relating
      thereto both dated the Prospectus Date produced by the Reporting
      Accountants.

11    One signed original or certified copy of the letter with the valuation
      certificate(s) dated the Prospectus Date from the Property Valuers to the
      Directors in connection with the valuation of the property interests of
      the Group as at 29 February 2004, the text of which is contained in
      Appendix III to the Prospectus.

12    One signed original of each of the letters from the Reporting Accountants
      to the Directors and HSBC (as sponsor and on behalf of the Public Offer
      Underwriters) confirming the

                                       50
<PAGE>

      indebtedness statement contained in the Prospectus, commenting on the
      statement contained in the Prospectus as to the sufficiency of working
      capital and commenting on the other financial information set out in the
      Prospectus, such letters to be (in form and substance) previously agreed
      by the Reporting Accountants with the Company and HSBC on behalf of the
      Public Offer Underwriters.

13    One signed original or a certified copy of each of the letters dated the
      Prospectus Date referred to in the paragraph headed "Consents of experts"
      in Appendix V to the Prospectus containing consents to the issue of the
      Prospectus with the inclusion of references to their respective names, and
      where relevant, their reports and letters in the form and context in which
      they are included.

14    A letter from Johnson Stokes & Master to the Public Offer Underwriters
      confirming that a copy of each of the documents specified in Appendix VI
      to the Prospectus have been delivered to the Registrar of Companies in
      Hong Kong as required by section 342C of the Companies Ordinance.

15    A certified copy of the written confirmation issued by the Registrar of
      Companies in Hong Kong confirming registration of the Prospectus as
      required by section 342C of the Companies Ordinance.

16    A certified copy of the Articles of Association of the Company which were
      conditionally adopted by the sole shareholder of the Company at a special
      general meeting which was held on 8 April 2004.

17    A certified copy of each of the material contracts referred to in
      sub-paragraphs B(1) of the paragraph headed "Summary of material
      contracts" in Appendix V to the Prospectus.

18    A certified copy of each of the following:

18.1  the translation certificate issued by the translators in respect of the
      Prospectus; and

18.2  the certificate of registration of the Company under Part XI of the
      Companies Ordinance.

19    Certified copies of powers of attorney or authorities under which any of
      the Conditions Precedent Documents (other than those material contracts
      referred to in paragraph 17 above) are executed.

<PAGE>

                                   SCHEDULE 5
                            ADVERTISING ARRANGEMENTS

NEWSPAPERS                                  DATES

South China Morning Post                    16, 17, 19, 20 and 21 April 2004

Hong Kong Economic Times                    16, 17, 19, 20 and 21 April 2004

                                       52
<PAGE>

                                   SCHEDULE 6
                     PROFESSIONAL INVESTOR TREATMENT NOTICE

1     You are a Professional Investor by reason of your being within a category
      of person described in the Securities and Futures (Professional Investor)
      Rules as follows:

1.1   a trust corporation having been entrusted with total assets of not less
      than HK$40 million (or equivalent) as stated in its latest audited
      financial statements prepared within the last 16 months, or in the latest
      audited financial statements prepared within the last 16 months of the
      relevant trust or trusts of which it is trustee, or in custodian
      statements issued to the trust corporation in respect of the trust(s)
      within the last 12 months;

1.2   a high net worth individual having, alone or with associates on a joint
      account, a portfolio of at least HK$8 million (or equivalent) in
      securities and/or currency deposits, as stated in a certificate from an
      auditor or professional accountant or in custodian statements issued to
      the individual within the last 12 months;

1.3   a corporation the sole business of which is to hold investments and which
      is wholly owned by an individual who, alone or with associates on a joint
      account, falls within paragraph 1.2 above; and

1.4   a high net worth corporation or partnership having total assets of at
      least HK$40 million (or equivalent) or a portfolio of at least HK$8
      million (or equivalent) in securities and/or currency deposits, as stated
      in its latest audited financial statements prepared within the last 16
      months or in custodian statements issued to the corporation or partnership
      within the last 12 months.

      HSBC has categorised you as a Professional Investor based on information
      you have given us. You will inform us promptly in the event any such
      information ceases to be true and accurate. You will be treated as a
      Professional Investor in relation to all investment products and markets.

2     As a consequence of categorisation as a Professional Investor, HSBC is not
      required to fulfil certain requirements under the Code of Conduct for
      Persons Licensed by or Registered with the Securities and Futures
      Commission (the "CODE") and other Hong Kong regulations. While HSBC may in
      fact do some or all of the following in providing services to you, HSBC
      has no regulatory responsibility to do so.

2.1   Client agreement

      HSBC is not required to enter into a written agreement complying with the
      Code relating to the services that are to be provided to you.

2.2   Risk disclosures

      HSBC is not required by the Code to provide you with written risk warnings
      in respect of the risks involved in any transactions entered into with
      you, or to bring those risks to your attention.

2.3   Information about HSBC

      HSBC is not required to provide you with information about its business or
      the identity and status of employees and others acting on its behalf with
      whom you will have contact.

2.4   Prompt confirmation

                                       53
<PAGE>

      HSBC is not required by the Code to promptly confirm the essential
      features of a transaction after effecting a transaction for you.

2.5   Information about clients

      HSBC is not required to establish your financial situation, investment
      experience or investment objectives, except where HSBC is providing advice
      on corporate finance work.

2.6   Nasdaq-Amex Pilot Program

      If you wish to deal through the Stock Exchange in securities admitted to
      trading on the Stock Exchange under the Nasdaq-Amex Pilot Program, HSBC is
      not required to provide you with documentation on that program.

2.7   Suitability

      HSBC is not required to ensure that a recommendation or solicitation is
      suitable for you in the light of your financial situation, investment
      experience and investment objectives.

3     You have the right to withdraw from being treated as a Professional
      Investor at any time in respect of all or any investment products or
      markets on giving written notice to the Compliance Department of HSBC.

4     By entering into this Agreement, you represent and warrant to HSBC that
      you are knowledgeable and have sufficient expertise in the products and
      markets that you are dealing in and are aware of the risks in trading in
      the products and markets that you are dealing in.

5     By entering into this Agreement, you hereby agree and acknowledge that you
      have read and understood and have had explained to you the consequences of
      consenting to being treated as a Professional investor and the right to
      withdraw from being treated as such as set out herein and that you hereby
      consent to being treated as a Professional Investor.

6     By entering into this Agreement, you hereby agree and acknowledge that
      HSBC will not provide you with any contract notes, statements of account
      or receipts under the Hong Kong Securities and Futures (Contract Notes,
      Statements of Account and Receipts) Rules where such would otherwise be
      required.

                                       54
<PAGE>

                                   SCHEDULE 7
                                 THE WARRANTIES
PART 1

1     CAPACITY AND AUTHORITY

1.1   Each of the Warrantors has the requisite power and authority to enter into
      and perform its obligations under this Agreement and each of the Operative
      Documents to which it is a party.

1.2   This Agreement and each of the Operative Documents to which the Warrantors
      or any one of them is a party and any other document required to be
      executed by the Warrantors or any one of them pursuant to the provisions
      of this Agreement or any of the Operative Documents constitute or will,
      when executed and delivered, constitute valid and binding obligations of
      the Warrantors enforceable in accordance with their respective terms.

1.3   The execution and delivery of, and the performance by each of the
      Warrantors of its obligations under this Agreement or any of the Operative
      Documents to which it is a party do not and will not, and each such
      document does not and will not:

      1.3.1 result in a breach of any provision of the memorandum or articles of
            association or bye-laws (or equivalent constitutive documents) of
            the Warrantors or any member of the Group; or

      1.3.2 result in a breach of, or constitute a default under, any indenture,
            mortgage, charge, trust, lease, agreement, instrument or obligation
            to which any member of the Group or any of the Warrantors is a party
            or by which any member of the Group or any of the Warrantors or any
            of their respective assets is bound;

      1.3.3 result in a breach of any Laws to which any member of the Group or
            any of the Warrantors is subject or by which any member of the Group
            or any of the Warrantors or any of their respective assets is bound;

      1.3.4 except as disclosed in the Prospectus and the Preliminary Offering
            Circular, require any Approval from any Government Authority or the
            sanction or consent of its shareholders; or

      1.3.5 result in the creation or imposition of any Encumbrance or other
            restriction upon any assets of any member of the Group.

1.4   Each member of the Group has been duly incorporated and is validly
      existing under the laws of the jurisdiction in which it is established and
      is capable of suing and being sued.

1.5   Each member of the Group has the legal right and authority to own, use,
      lease and operate its assets and to conduct its business in the manner
      presently conducted.

1.6   Neither the Company nor any of the Subsidiaries is in violation of any of
      its respective constitutive documents.

1.7   None of the Warrantors or any of the Subsidiaries has taken any action nor
      have any steps been taken or legal, legislative or administrative
      proceedings been started or threatened (i) to wind up, dissolve, make
      dormant, or eliminate the Company or (as the case may be) the Selling
      Shareholder or (as the case may be) any of the Subsidiaries, or (ii) to
      withdraw, revoke or cancel any Approval to conduct business of any member
      of the Group.

                                       55
<PAGE>

2     THE REORGANISATION

2.1   Each step of the Reorganisation was effected in compliance with all
      applicable Laws of all appropriate jurisdictions.

2.2   Neither the Reorganisation (or its implementation) nor any of the
      Reorganisation Documents:

      2.2.1 resulted or will result in a breach of any of the terms or
            provisions of, or in the case of the Company, its Articles of
            Association (or its articles of association at the time) or, in the
            case of any Subsidiary, its constituent documents; or

      22.2  resulted or will result in a breach of, or constituted or will
            constitute a default under, any indenture, mortgage, charge, trust,
            lease, agreement, instrument or obligation to which the Company or
            any Subsidiary was or is a party or by which the Company or any
            Subsidiary or any of their respective assets was or is bound; or

      2.2.3 resulted or will result in a breach of any Laws to which the Company
            or any Subsidiary was or is subject or by which the Company or any
            Subsidiary or any of their respective assets was or is bound; or

      2.2.4 resulted or will result in the creation or imposition of any
            Encumbrance or other restriction upon any assets of any member of
            the Group; or

      2.2.5 has rendered or will render the Company or any of the Subsidiaries
            liable to any additional tax, duty, charge, impost or levy of any
            amount which has not been provided for in the accounts based upon
            which the accountants' report was prepared by the Reporting
            Accountants and set out in Appendix I to the Prospectus, or in the
            Deed of Indemnity or otherwise described in the Prospectus and the
            Preliminary Offering Circular.

2.3   All Approvals required in connection with the Reorganisation have been
      obtained and are in full force and effect and no Approval is subject to
      any condition precedent which has not been fulfilled or performed.

2.4   There are no legal or administrative or other proceedings pending anywhere
      challenging the effectiveness or validity of the Reorganisation or any of
      the Reorganisation Documents and, to the best knowledge, information,
      belief and awareness of the Warrantors, no such proceedings are threatened
      or contemplated by any Governmental Authority or by any other person.

3     THE GLOBAL OFFERING

3.1   The details of the authorised and issued share capital of the Company and
      the Subsidiaries set out in the Prospectus and the Preliminary Offering
      Circular are true and accurate in all respects.

3.2   There are no outstanding securities convertible into or exchangeable for,
      or warrants, rights or options to purchase from the Company, or subscribe
      for, or obligations of the Company to issue or sell, or pre-emptive or
      other rights to subscribe or acquire, shares or securities in any member
      of the Group.

3.3   The Offer Shares conform to the description thereof contained in the
      Prospectus and the Preliminary Offering Circular and such description is
      true and correct in all respects.

                                       56
<PAGE>

3.4   The Company has obtained an approval in principle for the listing of, and
      permission to deal in, the shares of the Company in issue or to be issued,
      as described in the Prospectus and the Preliminary Offering Circular, on
      the Stock Exchange.

3.5   The performance by the Company and the Selling Shareholder of their
      respective obligations under the Global Offering; the sale and transfer of
      the Offer Shares; and the issue, publication, distribution or making
      available of the Public Offer Documents, the Formal Notice and the
      Preliminary Offering Circular have been duly authorised and do not and
      will not:

      3.5.1 result in a violation or breach of any provision of the Articles of
            Association; or

      3.5.2 result in a breach of, or constitute a default under, any indenture,
            mortgage, charge, trust, lease, agreement or other instrument to
            which any member of the Group is a party or by which any member of
            the Group or any of its assets is bound; or

      3.5.3 result in a breach of any Laws to which any member of the Group is a
            party or is subject or by which any member of the Group or any of
            their respective assets is bound; or

      3.5.4 except as disclosed in the Prospectus and the Preliminary Offering
            Circular, require any Approval from any Governmental Authority or,
            in the case of the Company, the sanction or consent of its
            shareholders; or

      3.5.5 result in the creation or imposition of any Encumbrance or other
            restriction upon any assets of any member of the Group.

3.6   All Approvals required for the performance by the Company and the Selling
      Shareholder of their respective obligations under the Global Offering; the
      sale and transfer of the Offer Shares; and the issue, publication,
      distribution or making available of each of the Public Offer Documents,
      the Formal Notice and the Preliminary Offering Circular have been or will
      (prior to the Prospectus Date) be irrevocably and unconditionally obtained
      and are in full force and effect.

3.7   All of the Offer Shares:

      3.7.1 are fully paid up;

      3.7.2 have not been issued in violation of or subject to any right of
            pre-emptive right, right of first refusal or similar rights; and

      3.7.3 are freely transferable by the Selling Shareholder and there are no
            restrictions on subsequent transfers of the Offer Shares under the
            Laws of the Cayman Islands.

3.8   No holder of Shares is or will be subject to any liability regarding the
      Company arising out of his holding of Shares (except to the extent of the
      amount payable for such Shares on purchase under the terms of the Global
      Offering).

3.9   There are no limitations on the rights of holders of Shares to hold or
      vote or transfer their shares.

3.10  All dividends and other distributions declared and payable on the shares
      of capital stock of the Company may under the current laws and regulations
      of the Cayman Islands be paid to the shareholders of the Company in Hong
      Kong dollars, and may be converted into foreign currency that may be
      freely transferred out of the Cayman Islands and all such

                                       57
<PAGE>

      dividends and other distributions will not be subject to withholding or
      other taxes under the laws and regulations of the Cayman Islands and are
      otherwise free and clear of any other tax, withholding or deduction in the
      Cayman Islands and may be so paid without the necessity of obtaining any
      Approval from any Governmental Authority in the Cayman Islands.

3.11  None of the Warrantors nor any of their respective affiliates, agents and
      (where applicable) subsidiaries, nor any person acting on its or their
      behalf, has taken or will take or caused or authorised or will cause or
      authorise any other person to take, directly or indirectly, any
      stabilizing action or any action designed to or which constitutes or which
      cause or to result in, or that has constituted or which might reasonably
      be expected to cause or result in, the stabilization or manipulation, in
      violation of applicable Laws, of the price of any security of the Company,
      provided that the granting of the Over-allotment Option shall not
      constitute a breach of this paragraph 3.11.

4     THE ACCOUNTS

4.1   The audited combined results of the Group for each of the three years
      ended the Accounts Date and the audited combined net assets of the Group
      as at the Accounts Date contained in the accountants' report prepared by
      the Reporting Accountants and set out in Appendix I to the Prospectus have
      been prepared in accordance with generally accepted Hong Kong accounting
      principles, standards and practices so as to give a true and fair view of
      the combined net assets of the Group at the Accounts Date and of the
      results of the Group for the accounting reference period of three years
      ending on the Accounts Date and:

      4.1.1 such accounts are accurate in all respects, make due provision for
            any bad or doubtful debts and make appropriate 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;

      4.1.2 depreciation of fixed assets has been made at rates sufficient to
            spread the cost over their respective estimated useful lives to the
            Group; and

      4.1.3 the profits and losses shown by such accounts and the trend of
            profits thereby shown have not been affected by any unusual or
            exceptional item or by any other matter which has rendered such
            profits or losses unusually high or low.

4.2   The unaudited management accounts of the Group for the 2 months ended 29
      February 2004 have been prepared in accordance with generally accepted
      Hong Kong accounting principles, standards and practices so as to give a
      true and fair view of the state of affairs of the Group as at 29 February
      2004 and of the results of the Group for the accounting reference period
      of 2 months ended 29 February 2004 and:

      4.2.1 such accounts make proper provision for any bad or doubtful debts
            and make appropriate 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;

      4.2.2 depreciation of fixed assets has been made at rates sufficient to
            spread the cost over their respective estimated useful lives to the
            Group; and

      4.2.3 the profits and losses shown by such accounts and the trend of
            profits thereby shown have not been affected by any unusual or
            exceptional item or by any other matter which has rendered such
            profits or losses unusually high or low.

                                       58
<PAGE>

4.3   The Reporting Accountants, who have certified certain financial
      statements of the Company and its Subsidiaries, are qualified independent
      professional accountants as required by the Listing Rules, the Companies
      Ordinance, the Professional Accountants Ordinance, and the rules and
      regulations thereunder.

5     CHANGES SINCE THE ACCOUNTS DATE

5.1   Since the Accounts Date:

      5.1.1 each member of the Group has carried on and will carry on business
            in the ordinary and usual course so as to maintain it as a going
            concern and in the same manner as previously carried on and since
            such date has not entered into any contract, transaction or
            commitment outside the ordinary course of business or of an unusual
            or onerous nature;

      5.1.2 there has been no material adverse change, or any development
            involving a prospective material adverse change, in the general
            affairs, management, financial condition or prospects of the said
            business or the earnings, business affairs or net asset value of the
            said business or of the Group taken as a whole as compared with the
            position or prospects disclosed by the audited combined net assets
            of the Group referred to in paragraph 4.1 above and there has been
            no damage, destruction or loss (whether or not covered by insurance)
            affecting the said business or its assets;

      5.1.3 each member of the Group has continued to pay its creditors in the
            ordinary course of business;

      5.1.4 save as disclosed in the Prospectus and the Preliminary Offering
            Circular no member of the Group has acquired, sold, transferred or
            otherwise disposed of any assets of whatsoever nature or cancelled
            or waived or released or discounted in whole or in part any debts or
            claims, except in each case in the ordinary course of business;

      5.1.5 save as disclosed in the Prospectus and the Preliminary Offering
            Circular no member of the Group has purchased or reduced any of its
            share capital, nor declared, paid or made any dividend or
            distribution of any kind on any class of shares; and

      5.1.6 no member of the Group has taken on or become subject to any
            material contingent liability.

6     FINANCIAL REPORTING PROCEDURES

      The Directors have established procedures which provide a reasonable basis
      for them to make proper judgements as to the financial position and
      prospects of the Group, taken as a whole, and the Group maintains a system
      of internal accounting controls sufficient to provide reasonable assurance
      that (!) transactions are executed in accordance with management's general
      or specific authorisations; (ii) transactions are recorded as necessary to
      permit preparation of complete and accurate returns and reports to
      regulatory bodies as and when required by them and financial statements in
      accordance with the relevant generally accepted accounting principles and
      applicable accounting requirements; (iii) access to assets is permitted
      only in accordance with management's general or specific authorisation;
      and (iv) the recorded accountability for assets is compared with existing
      assets at reasonable intervals and appropriate actions taken with respect
      to any

                                       59
<PAGE>

      differences. The Group's current management information and accounting
      control system has been in operation for at least three years (or since
      incorporation, whichever is shorter) during which none of them has
      experienced any difficulties with regard to (i) through (iv) above or with
      regard to ascertaining at any point in time the differences in real time
      between budgeted and actual expenses.

7     ACCOUNTING AND OTHER RECORDS

      The statutory books, books of account and other records of whatsoever kind
      of each member of the Group are up-to-date and contain complete and
      accurate records required by Law to be dealt with in such books and no
      notice or allegation that any is incorrect or should be rectified has been
      received. All accounts, documents and returns required by Law to be
      delivered or made to the Registrar of Companies in Hong Kong and the
      Cayman Islands or any other authority have been duly and correctly
      delivered or made.

8     CAPITAL AND CONTRACTUAL COMMITMENTS

8.1   No member of the Group has any capital commitment or any guarantee or
      other contingent liabilities.

8.2   No member of the Group is, or has been, party to any unusual, long-term or
      onerous commitments, contracts or arrangements not wholly on an arm's
      length basis in the ordinary and usual course of business. For these
      purposes, a long-term contract, commitment or arrangement is one which is
      unlikely to have been fully performed in accordance with its terms more
      than six months after the date it was entered into or undertaken or is
      incapable of termination by the relevant member of the Group on six
      months' notice or less.

8.3   No member of the Group is party to any agency, distributorship, marketing,
      purchasing, manufacturing or licensing agreement or arrangement or any
      agreement or arrangement which restricts its freedom to carry on its
      business in any part of the world in such manner as it thinks fit.

8.4   All the contracts and all leases, tenancies, licences, concessions and
      agreements of whatsoever nature to which any member of the Group is a
      party are valid, binding and enforceable obligations of the parties
      thereto and the material terms thereof have been complied with by the
      relevant member of the Group and by all the other parties thereto and
      there are no grounds for rescission, avoidance or repudiation of any of
      the contracts or such leases, tenancies, licences, concessions or
      agreements and no notice of termination or of intention to terminate has
      been received in respect of any thereof.

9     LITIGATION AND OTHER PROCEEDINGS

9.1   Save as disclosed in the Prospectus and the Preliminary Offering Circular
      no litigation, arbitration or governmental proceedings or investigations
      directly or indirectly involving any member of the Group or involving or
      affecting any of the directors of any member of the Group or any member of
      the Group is in progress or, to the best knowledge, information, belief
      and awareness of the Warrantors, or any of them, is threatened or pending
      and to the best knowledge, information, belief and awareness of the
      Warrantors after due and careful enquiry, there are no circumstances
      likely to give rise to any such litigation, arbitration or governmental
      proceedings or investigations.

9.2   No member of the Group which is a party to a joint venture or
      shareholders' agreement is in dispute with the other parties to such joint
      venture or shareholders' agreement and to the

                                       60
<PAGE>

      best knowledge, information, belief and awareness of the Warrantors after
      due and careful enquiry, there are no circumstances which may give rise to
      any dispute or affect the relevant member's relationship with such other
      parties which might be expected to have a material adverse effect on such
      joint venture or company or its business or finances.

10    INDEBTEDNESS/DEFAULT

10.1  Save as disclosed in the Prospectus and the Preliminary Offering Circular,
      no member of the Group has any outstanding liabilities, term loans, other
      borrowings or indebtedness in the nature of borrowings, including bank
      overdrafts and loans, debt securities or similar indebtedness, hire
      purchase commitments or any mortgages and charges.

10.2  No outstanding indebtedness of any member of the Group which is material
      taken in the context of the Group as a whole has become repayable before
      its stated maturity, nor has any security in respect of such indebtedness
      become enforceable by reason of default by any member of the Group

10.3  No person to whom any indebtedness of any member of the Group, which is
      material taken in the context of the Group as a whole and which is
      repayable on demand, is owed has demanded or threatened to demand
      repayment of, or to take steps to enforce any security for, the same.

10.4  No circumstance has arisen such that any person is now entitled to require
      payment of any indebtedness or under any guarantee of any liability of any
      member of the Group which is material taken in the context of the Group as
      a whole by reason of default by any such member or any other person or any
      guarantee given by any member of the Group which is material taken in the
      context of the Group as a whole.

10.5  No event has occurred and is subsisting or, to the best knowledge,
      information, belief and awareness of the Warrantors, is about to occur
      which constitutes or would (whether with the expiry of any applicable
      grace period or the fulfilment of any condition or the giving of any
      notice or the compliance with any other formality or otherwise) constitute
      a default under, or result in the acceleration by reason of default of,
      any obligations under any agreement, undertaking, instrument or
      arrangement to which any member of the Group is a party or by which any of
      them or their respective revenues or assets are bound.

10.6  The amounts borrowed by each member of the Group do not exceed any
      limitation on its borrowing contained in its articles of association or
      bye-laws (or equivalent constituent documents), any debenture or other
      deed or document binding upon it and except in the ordinary course of
      business, no member of the Group has factored any of its debts, or engaged
      in financing of a type which would not be required to be shown or
      reflected in its audited accounts.

10.7  All the Group's borrowing facilities have been duly executed and are in
      full force and effect. All undrawn amounts under such borrowing facilities
      are or will be capable of drawdown. No event has occurred and no
      circumstances exist which could cause any undrawn amounts under any such
      borrowing facilities to be unavailable for drawing as required.

10.8  No event has occurred and no circumstances exist in relation to any
      government, regional, state or local authority investment grants, loan
      subsidies or financial assistance received by or pledged to any member of
      the Group in consequence of which any of the member of the Group is or may
      be held liable to forfeit or repay in whole or in part any such grant or
      loan.

                                       61
<PAGE>

11    ARRANGEMENTS WITH RELATED PARTIES

11.1  No indebtedness (actual or contingent) and no contract or arrangement is
      outstanding between any member of the Group and any director of any member
      of the Group or any of his associates (as defined in the Listing Rules).

11.2  Save as disclosed in the Prospectus and the Preliminary Offering Circular
      or for such transactions as may be entered into by the Company pursuant to
      any of the Operative Documents, no indebtedness (actual or contingent) and
      no contract or arrangement is outstanding between any member of the Group
      and the Warrantors (excluding the Company) or any of them or any company
      (excluding the members of the Group) or undertaking which is owned or
      controlled by the Warrantors (excluding the Company) or any of them
      (whether by way of shareholding or otherwise).

11.3  None of the Warrantors (excluding the Company) nor any of their respective
      associates (as defined in the Listing Rules), either alone or in
      conjunction with or on behalf of any other person, is engaged in any
      business of any member of the Group or any business similar to or in
      competition with the business of any member of the Group to the extent
      that there could be a conflict of interests between the Warrantors
      (excluding the Company) or any of their respective associates (as defined
      in the Listing Rules) and the general body of shareholders of the Company,
      nor are any of the Warrantors (excluding the Company) or their respective
      associates (as defined in the Listing Rules) interested, directly or
      indirectly, in any assets which have since the date two years immediately
      preceding the Prospectus Date been acquired or disposed of by or leased to
      any member of the Group.

11.4  There are no relationships or transactions not in the ordinary course of
      business between any member of the Group and their respective customers or
      suppliers.

11.5  In respect of the connected transactions (as defined under the Listing
      Rules) of the Group (the "CONNECTED TRANSACTIONS"): (A) the statements
      contained in the Prospectus and the Preliminary Offering Circular relating
      to the Connected Transactions are true and accurate and there are no other
      facts the omission of which would make any such statements misleading, and
      there are no other Connected Transactions which have not been disclosed in
      the Prospectus and the Preliminary Offering Circular; (B) all information
      (including but not limited to historical figures) and documentation
      provided by the Company to HSBC and the Underwriters are true and accurate
      and complete and there is no other information or document which have not
      been provided the result of which would make the information and documents
      so received misleading; (C) the transactions mentioned in the section
      "Connected Transactions" in the Prospectus and the Preliminary Offering
      Circular have been entered into and will be carried out in the ordinary
      course of business, on normal commercial terms and are fair and reasonable
      so far as the shareholders of the Company are concerned; (D) each of the
      Company and (where applicable) the Selling Shareholder) has complied with
      and undertakes to continue to comply with the terms of the Connected
      Transactions disclosed in the Prospectus and the Preliminary Offering
      Circular so long as the agreement or arrangement relating thereto is in
      effect and shall inform HSBC should there be any breach of any such terms
      either before or after the listing of Shares on the Stock Exchange; (E)
      each of the Connected Transactions and related agreements and undertakings
      as disclosed in the Prospectus and the Preliminary Offering Circular
      constitutes a legal, valid and binding agreement or undertaking of the
      relevant parties thereto; and (F) each of the Connected Transactions has
      been consummated and was and will be effected in compliance with all
      applicable Laws.

                                       62
<PAGE>

12    GROUP STRUCTURE

12.1  The Subsidiaries are the only subsidiaries of the Company.

12.2  No member of the Group has any branch, agency, place of business or
      permanent establishment outside Hong Kong, the Cayman Islands, Macao and
      the PRC.

12.3  No member of the Group acts or carries on business in partnership with any
      other person or is a member of any corporate or unincorporated body,
      undertaking or association or holds or is liable on any share or security
      which is not fully paid up or which carries any liability.

12.4  Each joint venture contract and shareholders agreement in respect of which
      a member of the Group is a party is legal, valid, binding and enforceable
      in all respects in accordance with its terms under its governing law and
      all relevant Approvals in respect thereof have been obtained.

12.5  None of the member of the Group is engaged in any business activity or has
      any asset or liability (whether actual, contingent or otherwise) which is
      not directly or indirectly related to the business of the Group as
      described in the Prospectus and the Preliminary Offering Circular.

13    ACCURACY AND ADEQUACY OF INFORMATION SUPPLIED

13.1  The recitals to this Agreement are true and accurate in all respects.

13.2  Subject to limitations set out in the Prospectus and the Preliminary
      Offering Circular, the statistical and market related data included in the
      Prospectus and the Preliminary Offering Circular are based on or derived
      from sources which the Warrantors believe to be accurate and reliable.

13.3  All information supplied or disclosed by or on behalf of any member of
      the Group and/or any director of any member of the Group and/or any of the
      Warrantors to the Underwriters, the Reporting Accountants, the Property
      Valuers and other professional advisers to the Underwriters for the
      purposes of the Global Offering is true and accurate and not misleading
      and was given in good faith and all forward-looking statements so supplied
      or disclosed have been made after due and proper consideration and, where
      appropriate, are based on the assumptions referred to in the Prospectus
      and the Preliminary Offering Circular.

13.4  All information requested from the Company by the Reporting Accountants
      and the Property Valuers for the purposes of their reports, letters, and
      certificates to the Company and/or the Underwriters has been supplied to
      them. No information was withheld from the Reporting Accountants and the
      Property Valuers and the Company does not disagree with any aspect of the
      reports, letters or certificates prepared by the Reporting Accountants and
      the Property Valuers and the opinions attributed to the Directors in such
      reports or letters are honestly held by the Directors and are fairly based
      upon facts within their knowledge after due and careful consideration.

13.5  The replies to the questions set out in the Verification Notes given by or
      on behalf of the Company or the Selling Shareholder or the Directors were
      so given by persons having appropriate knowledge and duly authorised for
      such purposes and all such replies have been given in full and in good
      faith and were, and remain, true and accurate and not

                                       63
<PAGE>

      misleading and contain all information and particulars with regard to the
      subject matter thereof with no omissions,

13.6  None of the Public Offer Documents and the Preliminary Offering Circular
      contains or will contain any untrue statement or omit to state any
      material fact necessary to make the statements therein, in the light of
      the circumstances under which they are made, not misleading or which are
      material for disclosure therein. All expressions of opinion or intention
      therein (including but not limited to the statements regarding the
      sufficiency of working capital, use of proceeds, indebtedness, prospects,
      dividends, material contracts and litigation) are made on reasonable
      grounds or, where appropriate, reasonable assumptions and are truly and
      honestly held and there .are no other material facts the omission of
      disclosure therein of which would make any such statement or expression
      misleading.

13.7  All forward-looking statements contained in the Public Offer Documents and
      the Preliminary Offering Circular are made after due and proper
      consideration, are based on relevant assumptions referred to therein and
      represent reasonable and fair expectations honestly held based on facts
      known to the Group and/or the Warrantors or any of them and there are no
      other assumptions on which such forward-looking statements are based other
      than the assumptions referred to in the Public Offer Documents and the
      Preliminary Offering Circular in which such forward-looking statements are
      contained. Such forward-looking statements do not omit or neglect to
      include or take into account of any facts or matters which are or may be
      material to such forward-looking statements or to the Global Offering.

13.8  Without limiting the generality of the foregoing, each of the Prospectus
      and the Preliminary Offering Circular contains all particulars and
      information reasonably necessary to enable an investor to make an informed
      assessment of the activities, assets and liabilities, financial position,
      management and prospects of the Group and its profits and losses and of
      the rights attaching to the Shares and there are no other facts the
      omission of which would make any statement in the Prospectus or the
      Preliminary Offering Circular misleading or which is in the context of the
      Global Offering material for disclosure.

13.9  The report prepared by the Company in respect of the adequacy of the
      Group's working capital and cash flow for the twelve-month period after
      the date of the Prospectus has been properly compiled by the Company on
      the basis of the assumptions stated therein and is presented on a basis
      consistent with the accounting principles and policies adopted by the
      Reporting Accountants in relation to the preparation of the Accountants'
      Report contained in the Prospectus and the Preliminary Offering Circular
      after making proper provision for all known liabilities (whether actual or
      contingent or otherwise); that the assumptions upon which the report are
      based have been made after due and careful enquiry and are fair and
      reasonable in the context of the Group and that there are no facts known
      or which could on due and careful enquiry have been known to the Company
      or the Directors which have not been taken into account in the preparation
      of the report or the omission of which would make any statement made in
      such report or any expression of opinion or intention contained or
      assumption made in such report misleading.

13.10 The Public Offer Documents and the Formal Notice contain and, when each of
      them is issued, wilt contain all information and particulars required to
      comply with all statutory and other provisions (including the Companies
      Ordinance, the Companies Law and the Listing Rules) so far as applicable.

                                       64
<PAGE>

14    PROPERTIES

14.1  None of the members of the Group owns, operates, manages, leases or has
      any other right of interest in any other property of any kind save for
      those described in the valuation report set out in the Prospectus and the
      Preliminary Offering Circular.

14.2  With respect to the rights and interests in property and other assets
      (including but not limited to land and buildings) owned by members of the
      Group:

      (i)   the relevant member of the Group has good and marketable title, or
            has the right by Law to good and marketable title, to such property
            and other assets or any rights or interests thereto;

      (ii)  there are no mortgages, charges, liens, claims, Encumbrances or
            other security interests or third party rights or interests,
            conditions, planning consents, orders, regulations or other
            restrictions affecting any of such property and other assets which
            could have an adverse effect on the value of such property and other
            assets or adversely limit, restrict or otherwise affect the ability
            of the relevant member of the Group to utilise, develop or redevelop
            any such property or other assets; and

      (iii) the relevant member of the Group is entitled as legal and beneficial
            owner of such property and other assets to all rights and benefits
            as landlord and/or licensor under the leases, tenancies or licences
            to which it is a party as landlord and/or licensor in respect of
            such property and other assets, and such leases, tenancies and
            licences are and will be in full force and effect

14.3  Where any property and other assets are held under lease, tenancy or
      licence by any member of the Group.

      (i)   each lease, tenancy or licence is legal, valid, subsisting and
            enforceable by the relevant member of the Group;

      (ii)  no default (or event which with notice or lapse of time, or both,
            would constitute a default) by any member of the Group has occurred
            and is continuing under any of such leases, tenancies or licences;
            and

      (iii) no member of the Group has notice of any claim of any nature that
            has been asserted by anyone adverse to the rights of the relevant
            member of the Group under such leases, tenancies or licences or
            affecting the rights of the relevant member of the Group to the
            continued possession of such leased or licensed property or other
            assets.

14.4  The ownership of and the right to use the land and buildings as described
      in the Prospectus and the Preliminary Offering Circular by the relevant
      member of the Group is not subject to any unusual or onerous terms or
      conditions.

15    INSURANCE

15.1  The description of the Company's insurance coverage contained in the
      Prospectus and the Preliminary Offering Circular is true, accurate and not
      misleading. All the assets of each of the members of the Group which are
      of an insurable nature have at all times been and are insured in amounts
      reasonably regarded as adequate and prudent against fire and other risks
      normally insured against by companies carrying on similar businesses or
      owning assets of a similar nature and each member of the Group has at all
      times been and is adequately covered against accident, third party injury,
      defective products, environmental

                                       65
<PAGE>

      liabilities, damage and other risks normally covered by insurance by such
      companies. Nothing has been done or has been omitted to be done whereby
      any such policies have or may become void or are likely to be avoided.

15.2  Save and except for outstanding medical claims made under the Group's
      medical insurance policies, no claim under any insurance policies taken
      out by any member of the Group is outstanding and there are no
      circumstances likely to give rise to such a claim. None of the outstanding
      medical claims made under the Group's medical insurance policies is
      material in the context of the Group as a whole.

15.3  All premiums due in respect of such insurance policies have been duly paid
      in full and all conditions for the validity and effectiveness of the said
      policies have been fully observed and performed.

15.4  None of the Warrantors has any reason to believe that any member of the
      Group will not be able to renew its existing insurance coverage from
      similar insurers as may be necessary to continue its business at a cost
      that would not adversely affect the condition, financial or otherwise, or
      the earnings, business or operations of the Group, taken as a whole.

16    COMPLIANCE WITH LEGAL AND REGULATORY REQUIREMENTS

16.1  Each member of the Group has carried on and is carrying on its business
      and operations in accordance with applicable Laws and all statutory,
      municipal and other Approvals necessary or desirable for the carrying on
      of the businesses and operations of each of the member of the Group as now
      carried on, as previously carried on and as proposed to be carried on have
      been obtained and are (or were at the relevant time) valid and subsisting
      and all conditions applicable to any such Approval have been and are
      complied with and there are no facts or circumstances exist or have in the
      past existed which may lead to the revocation, rescission, avoidance,
      repudiation, withdrawal, non-renewal or change, in whole or in part, of or
      in any existing Approvals or any requirements for additional Approvals
      which could prevent, restrict or hinder the operations of any member of
      the Group or involve any member of the Group in additional expenditure.

16.2  None of the members of the Group and the businesses now run by any of
      them, nor any of their respective officers, directors, supervisors,
      managers, agents, or employees have, directly or indirectly, (A) made or
      authorised any contribution, payment or gift of funds or property to any
      official, employee or agent of any governmental agency, authority or
      instrumentality in Hong Kong, the Cayman Islands, Macao, the PRC or any
      other jurisdiction or (B) made any contribution to any candidate for
      public office, in either case, where either the payment or the purpose of
      such contribution, payment or gift was, is, or would be prohibited under
      applicable Law, of any locality, including but not limited to the U.S.
      Foreign Corrupt Practices Act of 1977, as amended, or the rules and
      regulations promulgated thereunder;

16.3  None of the members of the Group is a party to any agreement, arrangement
      or concerted practice or is carrying on an practice which in whole or in
      part contravenes or is invalidated by any anti-trust, anti-monopoly,
      competition, fair trading, consumer protection or similar Laws in any
      jurisdiction where any of the members of the Group has assets or carries
      on business or in respect of which any filing, registration or
      notification is required or is advisable pursuant to such Laws (whether or
      not the same has in fact been made).

17    EMPLOYMENT AND PENSIONS

                                       66
<PAGE>

17.1  There are no amounts owing or promised to any present or former directors,
      employees or consultants of any member of the Group other than
      remuneration accrued due or for reimbursement of business expenses.

17.2  No directors or senior management or employees of any member of the Group
      have given or been given notice terminating their contracts of employment.

17.3  There are no proposals to terminate the employment or consultancy of any
      directors, employees or consultants of any member of the Group or to vary
      or amend their terms of employment or consultancy (whether to their
      detriment or benefit).

17.4  No member of the Group has outstanding any undischarged liability to pay
      to any Governmental Authority in any jurisdiction any taxation,
      contribution or other impost arising in connection with the employment or
      engagement of directors, employees or consultants by it.

17.5  No liability has been incurred by any member of the Group for:

      17.5.1 breach of any contract of service, contract for services or
             consultancy agreement;

      17.5.2 redundancy payments;

      17.5.3 compensation for wrongful, constructive, unreasonable or unfair
             dismissal;

      17.5.4 failure to comply with any order for the reinstatement or
             re-engagement of any director, employee or consultant; or

      17.5.5 the actual or proposed termination or suspension of employment or
             consultancy, or variation of any terms of employment or consultancy
             of any present or former employee, director or consultant of any
             member of the Group.

17.6  No dispute of material importance with the directors, employees (or any
      trade union or other body representing all or any of such employees),
      consultants or agents of any member of the Group exists or, to the best
      knowledge, information, belief and awareness of the Warrantors, is
      imminent or threatened. None of the members of the Group is aware of any
      existing or imminent labour disturbance by the directors, employees or
      consultants of any of its principal suppliers, customers or contractors
      which might be expected to result in an adverse change in the condition,
      financial or otherwise, or in the results of operations, business affairs
      or business prospects or net worth of the Group.

17.7  The Group has in relation to its directors, employees or consultants (and
      so far as relevant to each of its former directors, employees or
      consultants) complied in all material respects with all applicable
      statutes, regulations and bye-laws and the terms and conditions of such
      directors', employees' or consultants' (or former directors', employees'
      or consultants') contracts of employment or consultancy.

17.8  No contributions are being, or have been made by a member of the Group to
      any pension, retirement, provident fund or death or disability benefit
      scheme or arrangement other than the Pension Schemes and no member of the
      Group participates in, or has participated in, or is liable to contribute
      to, any pension, retirement, provident fund or death or disability benefit
      scheme or arrangement in respect of past or present employees or directors
      of the Group other than the Pension Schemes.

17.9  Each of the Pension Schemes complies with and has been operated in all
      material respects in accordance with all applicable laws and regulations
      and the rules of the

                                       67
<PAGE>

      relevant scheme. There is no ground upon which any applicable
      registrations or exemptions in respect of any of the Pensions Schemes
      could be withdrawn or cancelled.

17.10 Other than contributions due to be paid at the next payment date, no
      contributions (or contribution surcharge) in respect of any employee or
      director of the Group or any other payment due to, or in respect of, the
      Pension Schemes is unpaid.

17.11 All defined benefit retirement schemes are adequately funded and no
      additional contributions by any member of the Group are currently due to
      be made to make up for any shortfall.

17.12 There is no material dispute relating to the Pension Schemes, whether
      involving any member of the Group, the trustees or administrators of the
      Pension Schemes, any employee or director of a member of the Group, or any
      other person and no circumstances exist which may give rise to any such
      claims.

18    INTELLECTUAL PROPERTY

18.1  For the purpose of this paragraph 18, "INTELLECTUAL PROPERTY" means all
      patents, patent rights, inventions, trade marks, service marks, logos,
      get-up, registered or unregistered design rights, trade or business names,
      domain names, trade secrets, confidential information, Know-how,
      copyrights, semi-conductor topography rights, database rights and any
      proprietary or confidential information systems processes or procedures
      and of their intellectual property (whether, in each case, registered,
      unregistered or unregistrable, and including pending applications for
      registration and rights to apply for registration) and all rights of a
      similar nature or having similar effect which may subsist in any part of
      the world.

18.2  For the purpose of this paragraph 18, "KNOW-HOW" means confidential and
      proprietary industrial and commercial information and techniques in any
      form (including paper, electronically stored data, magnetic media, film
      and microfilm) including without limitation drawings, formulae, test
      results, reports, project reports and testing procedures, instruction and
      training manuals, tables of operating conditions, market forecasts, lists
      and particulars of customers and suppliers.

18.3  All Intellectual Property and all pending applications therefor which
      have been, are or are capable of being used in or in relation to or which
      are necessary for the business of each member of the Group are (or, where
      appropriate in the case of pending applications, will be):

      18.3.1 legally and beneficially owned by the relevant member of the Group
             or lawfully used under valid licences granted by the registered
             proprietor(s) or beneficial owner(s) thereof and such licences are
             in full force and effect and have not been revoked or terminated
             and there are no grounds on which they might be revoked or
             terminated;

      18.3.2 valid and enforceable;

      18.3.3 not being infringed or attacked or opposed by any person;

      18.3.4 not subject to any Encumbrance or any licence or authority in
             favour of another;

      18.3.5 in the case of rights in such Intellectual Property as are
             registered or the subject of applications for registration, all
             renewal fees which are due and steps which are required for their
             maintenance and protection have been paid and taken; and

                                       68
<PAGE>

      18.3.6 in the case of unregistered trade marks which are likely to be
             material to any member of the Group,

      and no claims have been made or threatened and no applications are
      pending, which if pursued or granted might be material to the truth and
      accuracy of any of the above statements in this Clause 18.3.

18.4  No member of the Group has received any notice or is otherwise aware of
      (having made due and careful enquiries):

      18.4.1 any infringement of or conflict with claimed or asserted rights of
             others with respect to any rights mentioned in paragraph 18.3
             above; or

      18.4.2 any unauthorised use of any Know-how of any third party and no
             member of the Group has made disclosure of Know-how to any person
             except properly and in the ordinary course of business and on the
             basis that such disclosure is to be treated as being of a
             confidential character; or

      18.4.3 any opposition by any person to any pending applications; or

      18.4.4 any assertion of moral rights which would affect the use of any of
             the Intellectual Property in the business of any member of the
             Group; or

      18.4.5 any facts or circumstances which would render any rights mentioned
             in paragraph 18.3 above invalid or inadequate to protect the
             interests of the relevant member of the Group or unenforceable.

18.5  The rights and interest held by the Group (whether as owner, licensee or
      otherwise) in Intellectual Property comprises all the rights and interests
      necessary or convenient for the carrying on of the business of each member
      of the Group in and to the extent which it is presently conducted.

18.6  The processes employed and the products and services dealt in by a member
      of the Group both now and at any time within the last six years do and did
      not use, embody or infringe any rights or interests of third parties in
      Intellectual Property in any respect (other than those belonging to or
      licensed to a member of the Group and no claims of infringement of any
      such rights or interests have been made or threatened by any third party.

18.7  All licences and agreements to which any member of the Group is a party
      (including all amendments, novations, supplements or replacements to those
      licences and agreements) are in full force and effect, no notice having
      been given on any party to terminate them; the obligations of the parties
      thereto thereunder have been fully complied with; and no disputes have
      arisen or are foreseeable in respect thereof; and where such licences are
      of such a nature that they could be registered with the appropriate
      authorities and where such registration would have the effect of
      strengthening the Group's rights, they have been so registered.

19    INFORMATION TECHNOLOGY

19.1  For the purpose of this paragraph 19, "INFORMATION TECHNOLOGY" means all
      computer systems, communications systems, software and hardware owned,
      used or licensed by or to any member of the Group.

19.2  The Information Technology comprises all the information technology
      systems and related rights necessary to run the business of the Group.

                                       69
<PAGE>

19.3  All Information Technology which has been or which is necessary for the
      business of any member of the Group is either legally and beneficially
      owned by the relevant member of the Group or lawfully used under valid
      licences granted by the registered proprietor(s) or beneficial owner(s)
      thereof and such licences are in full force and effect and have not been
      revoked or terminated and to the best knowledge, belief, awareness and
      information of the Warrantors after due and careful enquiry, there are no
      grounds on which they might be revoked or terminated.

19.4  All the records and systems (including but not limited to Information
      Technology) material to the business of the Group taken as a whole and all
      data and information of each member of the Group are maintained and
      operated by a member of the Group are not wholly or partially dependent on
      any facilities not under the exclusive ownership or control of a member of
      the Group.

19.5  To the best knowledge, information, belief and awareness of the Warrantors
      after due and careful enquiry, there are no bugs or viruses, logic bombs
      or other contaminants (including without limitation, "worms" or "trojan
      horses") in or failures or breakdowns of any computer hardware or software
      or any other Information Technology equipment used in connection with the
      business of any member of the Group which have caused any substantial
      disruption or interruption in or to the business of any member of the
      Group.

19.6  In the event that the persons providing maintenance or support services
      for the Group's Information Technology cease or are unable to do so, the
      members of the Group have all the necessary rights and information to
      continue to maintain and support or have a third party maintain or support
      the Information Technology which is material for the operations of the
      Group as a whole.

19.7  Each member of the Group has in place procedures to prevent unauthorised
      access and the introduction of viruses.

19.8  Each member of the Group has in place adequate back-up policies and
      disaster recovery arrangements which enable its Information Technology and
      the data and information stored thereon to be replaced and substituted
      without material disruption to the business of the Group taken as a whole.

19.9  To the best knowledge, information, belief and awareness of the Warrantors
      after due and careful enquiry, there are no defects relating to the
      Information Technology owned or used by the business of any member of the
      Group and the Information Technology owned or used by any member of the
      Group has the capacity and performance necessary to fulfil the present and
      foreseeable requirements of the business of any member of the Group.

20    DATA PROTECTION

20.1  Each member of the Group has complied in all respects with all applicable
      data protection legislation, guidelines and industry standards.

20.2  No member of the Group has received any notice (including without
      limitation any enforcement notice, de-registration notice or transfer
      prohibition notice), letter, complaint or allegation from the relevant
      data protection regulator alleging breach or non-compliance by it of the
      applicable data protection legislation, guidelines and industry standards
      or prohibiting the transfer of data to a place outside the territory.

20.3  No member of the Group has received a claim for compensation from any
      individual in respect of its business under the applicable data protection
      legislation, guidelines and

                                       70
<PAGE>

      industry standards in respect of inaccuracy, loss, unauthorised
      destruction or unauthorised disclosure of data in the previous three years
      and there is no outstanding order against any member of the Group in
      respect of the rectification or erasure of data.

20.4  No warrant has been issued authorising the data protection regulator (or
      any of his officers or servants) to enter any of the premises of any
      member of the Group for the purposes of, inter alia, searching them or
      seizing any documents or other material found there.

21    ENVIRONMENTAL MATTERS

21.1  For the purposes of this paragraph 21:

      21.1.1  "ENVIRONMENT"means all or any part of the air (including, without
              limitation, air within buildings or natural or man-made structures
              whether above or below ground), water (including, without
              limitation, territorial, ocean, coastal and inland waters, surface
              water, groundwater and drains and sewers) and land (including,
              without limitation, sea bed or river bed under any water as
              described above, surface land and sub-surface land, and any
              natural or man-made structures), and also includes human, animal
              and plant life; and

      21.1.2  "ENVIRONMENTAL LAW" means any treaty, national, state, federal or
              local law, common law rule or other rule, regulation, ordinance,
              by-law, code, decree, demand or demand letter, injunction,
              judgement, notice or notice demand, code of practice, order or
              plan issued, promulgated or approved thereunder or in connection
              therewith pertaining to the protection of the Environment or to
              health and safety matters (and shall include, without limitation,
              laws relating to workers and public health and safety).

21.2  Each member of the Group has complied and is complying with all
      Environmental Laws that are applicable to its business.

21.3  There is no civil, criminal or administrative action, claim, investigation
      or other proceeding or suit pending or threatened against any member of
      the Group arising from or relating to Environmental Law which is material
      in the context of the Group as a whole and there are no circumstances
      existing which may lead to any such action, claim, investigation,
      proceeding or suit.

21.4  Each member of the Group conducts its operations so as not to lead to a
      breach of Environmental Law and in accordance with good operating practice
      of the industry in relation to all matters, practices and activities which
      could affect or cause harm to the Environment.

21.5  None of the members of the Group occupies, leases, owns, uses or has
      previously used, owned, leased or occupied, any property such that it is
      or may be wholly or partly responsible for the costs of any clean-up or
      other corrective action to any site or any part of the Environment.

21.6  There are no circumstances which require or may require any member of the
      Group to incur significant expenditure which is material in the context of
      the Group as a whole in respect of the Environment or under Environmental
      Law.

22    TAXATION

22.1  All returns, reports or filings which ought to have been made by or in
      respect of each of the existing member of the Group for taxation purposes
      have been made and all such returns

                                       71
<PAGE>

      are up to date, correct and prepared with due care and skill and on a
      proper basis and are not the subject of any dispute with the relevant
      revenue or other appropriate authorities and there are no present
      circumstances likely to give rise to any such dispute and the provisions
      included in the audited combined results of the Group as at the Accounts
      Date referred to in paragraph 4.1 above were sufficient to cover all
      taxation (if any) in respect of all accounting periods ended on or before
      the Accounts Date for which the Group was then liable, and the provisions
      included in the unaudited management accounts of the Group for the 2
      months ended 29 February 2004 referred to in paragraph 4.2 above were
      sufficient to cover all taxation in respect of the period of 2 months
      ended on 29 February 2004 for which the Group was then liable]. There is
      no tax deficiency that has been asserted against any member of Group.

22.2  All information and statements concerning taxation and its application to
      members of the Group in the Prospectus and the Preliminary Offering
      Circular are true and accurate and not misleading.

22.3  Save as disclosed in the Prospectus and the Preliminary Offering Circular
      (and subject to any reservation made therein), no tax or duty (including,
      without limitation, any stamp or issuance or transfer tax or duty and any
      tax or duty on capital gains or income, whether chargeable on a
      withholding basis or otherwise) is payable to any Governmental Authority
      in Hong Kong or the Cayman Islands in connection with:

      22.3.1 the transfer of the Offer Shares;

      22.3.2 the execution, delivery and performance of the Underwriting
             Documents;

      22.3.3 the delivery by the Selling Shareholder of the Offer Shares to or
             for the respective accounts of the Public Offer Underwriters and
             the International Placing Underwriters or to the initial purchasers
             thereof (as the case may be) or from the International Placing
             Underwriters to the placees of the International Placing in the
             manner contemplated in the Underwriting Documents;

      22.3.4 the payment by the Company to, and the receipt by shareholders of,
             any dividend in respect of Shares; and

      22.3.5 the sale, transfer or other disposition or delivery of any Shares,
             including any realised or unrealised capital gains arising in
             connection with such sale, transfer or other disposition.

23    IMMUNITY

      None of the Warrantors nor any of their respective assets or revenues are
      entitled to any right of immunity on the grounds of sovereignty from any
      legal action, suit or proceedings, from set-off or counterclaim, from the
      jurisdiction of any court, from service of process, from attachment prior
      to or in aid of execution of judgement, or from other legal process or
      proceedings for the giving of any relief or for the enforcement of any
      judgement. The irrevocable and unconditional waiver and agreement of the
      Warrantors in Clause 10.14 hereof not to plead or claim any such immunity
      in any legal action, suit or proceeding based on this Agreement is valid
      and binding under all applicable laws.

24    LAW AND JURISDICTION

24.1  Under the applicable Laws, the courts of the applicable jurisdiction of
      each party will recognise and give effect to the choice of law and dispute
      resolution provisions set forth in

                                       72
<PAGE>

      this Agreement and will enforce judgements of Hong Kong courts obtained
      against the other parties to enforce this Agreement, provided that the
      judgement:

      (i)   is not obtained by fraud;

      (ii)  is final and conclusive;

      (iii) in the opinion of the relevant court after its review of such
            judgement pursuant to international treaties concluded or acceded to
            by the relevant jurisdictions or in accordance with the principle of
            reciprocity, does not contradict the basic principles of Law of the
            relevant jurisdictions;

      (iv)  in the opinion of the relevant court after its review of such
            judgement pursuant to international treaties concluded or acceded to
            by the relevant jurisdictions or in accordance with the principle of
            reciprocity, does not violate state sovereignty, security or social
            and public interest; and

      (v)   is for a definite sum of money.

PART 2

1     PROFESSIONAL INVESTOR

      The Company has read and understood the Professional Investor Treatment
      Notice and acknowledges and agrees to the representations waivers and
      consents contained in the Professional Investor Treatment Notice. For the
      purpose of this provision, the words "you" and "your" in the Professional
      Investor Treatment Notice shall means "the Company" and "the Company's"
      respectively.

PARTS 3

1     CAPACITY

1.1   The Selling Shareholder has been duly incorporated and is validly existing
      under the laws of its place of incorporation and is capable of suing and
      being sued.

2     THE GLOBAL OFFERING

2.1   The Selling Shareholder has good and valid title to, and is and will,
      prior to the transfer of the Public Offer Shares to the purchasers thereof
      under the Global Offering, be the legal and beneficial owner of, the
      Public Offer Shares to be sold by it under the Global Offering, free and
      clear of all Encumbrances and with the benefit of all rights attached
      thereto and thereafter accruing thereto including the right to receive all
      dividends or other distributions which may be declared, paid or made
      thereon at or after the transfer of the Public Offer Shares pursuant to
      Clause 3.3.3.

2.2   The execution and delivery by or on behalf of the Selling Shareholder of,
      and compliance by the Selling Shareholder with, the terms of this
      Agreement; the performance by the Selling Shareholder of its obligations
      under the Global Offering; the sale and transfer of the Offer Shares; and
      the issue, publication, distribution or making available of the Public
      Offer Documents, the Formal Notice and the Preliminary Offering Circular
      have been duly authorised and do not and will not:

      2.2.1 result in a breach of any provision of the memorandum or articles of
            association or bye-laws (or equivalent constitutive documents) of
            the Selling Shareholder; or

                                       73
<PAGE>

      2.2.2 result in a breach of, or Constitute a default under, any indenture,
            mortgage, charge, trust, lease, agreement, instrument or obligation
            to the Selling Shareholder is a party or by which the Selling
            Shareholder or any of the Selling Shareholder's assets is bound;

      2.2.3 result in a breach of any Laws to which the Selling Shareholder is
            subject or by which the Selling Shareholder or any of its assets is
            bound;

      2.2.4 except as disclosed in the Prospectus and the Preliminary Offering
            Circular, require any Approval from any Governmental Authority or
            the sanction or consent of its shareholders; or

      2.2.5 result in the creation or imposition of any Encumbrance or other
            restriction upon any assets of the Selling Shareholder.

2.3   All Approvals required for the performance by the Selling Shareholder of
      its obligations under the Global Offering; the sale and transfer of the
      Offer Shares; and the issue, publication, distribution or making available
      of each of the Public Offer Documents and the Preliminary Offering
      Circular have been or will (prior to the Prospectus Date) be irrevocably
      and unconditionally obtained and are in full force and effect.

3     PROFESSIONAL INVESTOR

      The Selling Shareholder has read and understood the Professional Investor
      Treatment Notice and acknowledges and agrees to the representations,
      warranties and consents contained in the Professional Investor Treatment
      Notice. For the purpose of this provision, the words "you" or "your" in
      the Professional Investor Treatment Notice shall mean "the Selling
      Shareholder" and "the Selling Shareholder's" respectively.

<PAGE>

                                 SIGNATURE PAGE

THE COMPANY

SIGNED by Li Shi Yuen, Joseph
for and on behalf of
NAM TAI ELECTRONIC &
ELECTRICAL PRODUCTS LIMITED

                                                    /s/ Tammie Mei Fung Tam
                                                        Tammie Mei Fung Tam
                                                        Johnson Stokes & Master
                                                        Solicitor, Hong Kong SAR

THE SELLING SHAREHOLDER

SIGNED by Li Shi Yuen, Joseph
for and on behalf of
NAM TAI ELECTRONICS, INC.

                                                    /s/ Tammie Mei Fung Tam
                                                        Tammie Mei Fung Tam
                                                        Johnson Stokes & Master
                                                        Solicitor, Hong Kong SAR

THE EXECUTIVE DIRECTORS

SIGNED by Li Shi Yuen, Joseph
as attorney for
WONG KUEN LING
                                                    /s/ Tammie Mei Fung Tam
                                                        Tammie Mei Fung Tam
                                                        Johnson Stokes & Master
                                                        Solicitor, Hong Kong SAR

SIGNED by Li Shi Yuen, Joseph
as attorney for
GUY JEAN FRANCOIS BINDELS
                                                    /s/ Tammie Mei Fung Tam
                                                        Tammie Mei Fung Tam
                                                        Johnson Stokes & Master
                                                        Solicitor, Hong Kong SAR

<PAGE>

HSBC

SIGNED by Jonathan Orders
for and on behalf of
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED                  /s/ Jonathan orders

  /s/ [ILLEGIBLE]
  CHOW KA LOK KEVIN

    LINKLATERS
SOLICITOR, HONG KONG SAR

THE PUBLIC OFFER UNDERWRITERS

SIGNED by Jonathan Orders of
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
as the duly authorised agent or attorney of: /s/ Jonathan orders

BNP PARIBAS PEREGRINE CAPITAL LIMITED
NOMURA INTERNATIONAL (HONG KONG) LIMITED
CAZENOVE ASIA LIMITED
DBS ASIA CAPITAL LIMITED
VC CEF CAPITAL LIMITED

/s/ [ILLEGIBLE]
Chow Ka Lok Kevin

   Linkiaters

Solicitor, Hong Kong SAR

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]