09:27 FOUNDER HOLD<00418> - Announcement (5) Licence Fee - US$297,000/ HK$2,316,600 Maintenance Fee US$12,000/ US$76,500/ HK$93,600 HK$596,700 Japan Annual Cap Pursuant to the terms of the Japan Software Agreement and based on (a) the historical sales volume of Founder Japan; (b) the historical service fees derived from the OEM business; (c) the Group's turnover for the two years ended 31 December 2004 and its anticipated growth; and (d) the expected increase in the transaction volume by Founder Japan in light of the estimated market growth rate of the demand for software products in Japan in the coming three years, the Directors propose that the cap amount of the total transactions under the Japan Software Agreement for each of the three financial years ending 31 December 2007 will be as follows: For the year ending For the year ending For the year ending 31 December 2005 31 December 2006 31 December 2007 US$/HK$ equivalent US$/HK$ equivalent US$/HK$ equivalent Sale of Package Products US$25,000/ US$42,000/ US$70,000/ HK$195,000 HK$327,600 HK$546,000 OEM Business US$ 835,000/ US$958,000/ US$1,280,000/ HK$6,513,000 HK$7,472,400 HK$9,984,000 Total US$860,000/ US$1,000,000/ US$1,350,000 HK$6,708,000 HK$7,800,000 HK$10,530,000 The Directors prospose that the Japan Annual Cap for each of the three years ending 31 December 2005, 2006 and 2007 shall not exceed US$860,000 (equivalent to approximately HK$6,708,000), US$1,000,000 (equivalent to approximately HK$7,800,000) and US$1,350,000 (equivalent to approximately HK$10,530,000) respectively. The Japan Annual Cap is subject to the approval of the independent Shareholders. GENERAL Tai Fook Capital Limited has been appointed as the independent financial adviser to the Independent Board Committee. The Disposal and Loan Assignment together constitutes a discloseable and connected transaction for the Company under the Listing Rules. A special general meeting will be convened by the Company for the purpose of seeking the approval from its independent Shareholders of the Disposal, Loan Assignment, the Continuing Connected Transactions and the Japan Annual Cap. Peking Founder and its associates will abstain from voting at the special general meeting of the Company to be held in respect of all of the relevant resolutions. The Company will despatch to the Shareholders a circular containing further details of the Agreement, the Continuing Connected Transactions, the recommendation from the Independent Board Committee to the independent Shareholders, the recommendation from the independent financial adviser to the Independent Board Committee and a notice convening a special general meeting. As at the date of this announcement, the board of directors of the Company comprises the executive directors of Mr Cheung Shuen Lung, Professor Xiao Jian Guo, Professor Wei Xin, Mr Zhang Zhao Dong and Mr Xia Yang Jun, and the independent non-executive directors of Dr Hu Hung Lick, Henry, Mr Li Fat Chung and Mrs Wong Lam Kit Yee. Definitions "Agreement" the sale and purchase agreement entered into between Founder Hong Kong, the Purchaser and Peking Founder dated 7 February 2005 in relation to the Disposal and the Loan Assignment "associate(s)" has the meaning as ascribed to it in the Listing Rules "Company" Founder Holdings Limited, a company incorporated in Bermuda with limited liability the shares of which are listed on the main board of the Stock Exchange "Completion" completion of the Disposal and the Loan Assignment in accordance with the terms and conditions of the Agreement "Consideration" JPY693,520,600 (equivalent to approximately