09:26     FOUNDER HOLD<00418> - Announcement (4)                              

    constitutes a discloseable transaction for the Company under the Listing  
    Rules.                                                                    
                                                                              
    CONTINUING CONNECTED TRANSACTIONS                                         
    One of the subsidiaries of the Company carries on trading activities      
    with Founder Japan in the ordinary course of business and will continue   
    to carry on such same activities as described in the section headed       
    "Japan Software Agreement". Following completion of the Disposal,         
    Founder Japan will become a connected person of the Company within the    
    meaning of the Listing Rules and such trading activities will constitute  
    non-exempt continuing connected transactions of the Company under Rule    
    14A.35 of the Listing Rules and are subject to the disclosure             
    requirements under Rules 14A.37 to 14A.40, 14A.45 to 14A.47 and the       
    approval of the independent Shareholders under Rule 14A.48 of the         
    Listing Rules.                                                            
                                                                              
    Japan Software Agreement                                                  
    Date:        7 February 2005                                              
                                                                              
    Parties:        (1)        Founder Japan                                  
                                                                              
    (2)        Founder Electronics                                            
                                                                              
                                                                              
    (1)        Package Products:        Founder Electronics has agreed to     
    appoint and Founder Japan has agreed to accept, the appointment as a      
    non-exclusive distributor of the Package Products in Japan;               
                                                                              
    (2)        OEM Business:        (i)        Founder Electronics has        
    agreed to provide R&D services to Founder Japan on a project basis;       
                                                                              
    (ii)        Founder Japan has agreed to pay Founder Electronics a         
    licence fee for the grant of a non-exclusive, non-transferable,           
    non-sublicensable licence to use the applicable passcode for the          
    operation of the software developed under the R&D services; and           
                                                                              
    (iii)        Founder Japan has agreed to pay Founder Electronics a        
    maintenance fee for maintenance and support services in relation to the   
    R&D services.                                                             
                                                                              
    Term:        The Japan Software Agreement will have a fixed term of one   
    year renewable for consecutive one year periods automatically unless      
    either party provides to the other a notice of termination at least 60    
    days prior to expiry. Upon the expiry of the third year, either party     
    may renew the term in writing, subject to compliance with the Listing     
    Rules. Founder Electronics can unilaterally terminate the Japan Software  
    Agreement without cause by serving Founder Japan with not less than 90    
    days' written notice.                                                     
                                                                              
    Consideration:                                                            
    (1)        Package Products' Price:        The consideration is           
    determined by reference to a pre-determined price list drawn up by        
    Founder Electronics for all worldwide customers and the sales volume      
    achieved by the relevant distributor.                                     
                                                                              
    Founder Electronics will periodically review the price list and has the   
    right to increase the prices at its discretion by serving 90 days' prior  
    written notice.                                                           
                                                                              
    (2) OEM Business:        (i)        R&D Service Fee -        a monthly    
    fee of US$3,000 per person required to be provided by Founder             
    Electronics to participate in the project.                                
                                                                              
                    (ii)        Licence Fee -        Not more than 50% of     
    the licence fee of the software received by Founder Japan from its        
    customers, upon request.                                                  
                                                                              
                    (iii)        Maintenance Fee -        10% of the R&D      
    Service Fee per annum, upon request.                                      
                                                                              
    For each of the two years ended 31 December 2004, the total               
    consideration received for the sale of Package Products and the           
    provision of OEM services by activity by Founder Electronics from         
    Founder Japan was as follows:                                             
                                                                              
            For the year ended                For the year ended              
            31 December 2003 (audited)                31 December 2004        
    (audited)                                                                 
            US$/HK$ equivalent                US$/HK$ equivalent              
                                                                              
    Sale of Package Products        US$23,988/                US$17,520/      
            HK$187,106                HK$136,656                              
    R&D Service Fee        US$172,000/                US$273,500/             
            HK$1,341,600                HK$2,133,300