Set forth below is the simplified structure of the Group immediately following based on the Placing Price of HK$0.35 per (being the mid-point of the indicative range of the Placing Price between HK$0.32 and HK$0.38 per ), but before the exercise of the Over-allotment Option (Note 1): R ( Princeton Venture* (Note 3) Wu Meng Jie* Webberton** (Notes 6 and 11) Quam** in Bermuda) (Notes 8 and 11) Individual investors (who are also public shareholders) (Notes 10 and 11) 9.60% 1.15% 6.76% 5.12% 6.10% Upwise* (Note 2) One Focus* (Note 4) MC Capital** in the Netherlands) (Notes 5 and 11) Positivism** (Notes 7 and 11) Angel Ventures (Notes 9 and 11) Other public Shareholders pursuant to the Placing 21.55% 15.09% 9.42% 6.14% 3.07% 16% The Company in the Cayman Islands) Investment holding 100% Surfing Platform Investment holding 100% Xteam HK in Hong Kong) 100% Xteam China in the PRC) * Initial Management Shareholder ** Significant Shareholder Public Shareholder(s) Distribution of computer software in Hong Kong Sales of computer software and provision of related product development services in the PRC Notes: 1. The respective ratio of each shareholder based on the highest and lowest price of the indicative range of the Placing Price is set out in the section headed Shareholding structure of the Group of this prospectus. 2. Upwise is a company incorporated in the BVI with limited liability on 10th April, 2001 and is wholly and beneficially owned by Mr. Ma, an executive Director and an Initial Management Shareholder. 3. Princeton Venture is a company incorporated in the BVI with limited liability on 31st January, 2001 and is beneficially owned as to 50% by Mr. Ma and as to 50% by O2New, a company incorporated in Bermuda with limited liability, the securities of which are listed on the Main Board. Therefore, Mr. Ma and O2New are deemed to be interested in the entire issued share capital of Princeton Venture (by virtue of the SDI Ordinance). 75
4. One Focus is a company incorporated in the BVI with limited liability on 30th November, 1999 and is wholly and beneficially owned by Mr. Ren, an executive Director and an Initial Management Shareholder. 5. MC Capital is a company incorporated in the Netherlands on 20th April, 2000 and a wholly-owned subsidiary of Mitsubishi Corporation. MC Capital has confirmed in writing to the Company that it will exercise in full its rights of conversion under the Convertible Bond before the Listing Date. 6. Webberton is a company incorporated in the BVI with limited liability on 8th October, 1999 and a wholly-owned subsidiary of K&P. 7. Positivism is a company incorporated in the BVI with limited liability on 18th January, 2000 and is wholly and beneficially owned by Lawrence Lee. 8. Quam is a company incorporated in Bermuda with limited liability, the securities of which are listed on the Main Board. 9. Angel Ventures, a wholly-owned subsidiary of Angel Ventures Limited (formerly known as Chinanet Ltd.), is an investment holding company incorporated in the BVI. Each of the beneficial owners of Angel Ventures Limited, save for Mr. Ma, who is beneficially interested in approximately 4.70% of the issued share capital of Angel Ventures Limited, is an independent third party not connected with the directors, chief executives, substantial shareholders and initial management shareholders of the Company or any of their respective associates. Mr. Ma is not a director or the single largest shareholder nor participates in any decision-making concerning the operation of or any investments involving Angel Ventures Limited. Mr. Ma is not a member of the management of Angel Ventures Limited. 10. Set out below are the names of the individual investors and their respective percentage s: Individual investors after completion of Issue and the based on the Placing Price of HK$0.35 per (%) Ngan Hing Hon 3.07% Lee Yuen Lai 0.77% Jean Lee 0.51% Ma Robert Kam Fook 0.51% Yip Ying Chi, Benjamin 0.46% Sung Yan Wai 0.15% Chan Wai Kwong, Joel 0.14% Cheung Miu 0.12% Ching Hiu Yuen 0.12% Chui Shing Tai, Steadman 0.08% Lau Kam Kwok, Dickson 0.08% Tham Seng Yum, Ronald 0.05% Martin He 0.04% Yip Ying Chi, Benjamin, Cheung Miu, Ching Hiu Yuen and Chui Shing Tai, Steadman became the Shareholders because of their investments in Hang Fung, a shareholder of Algebra which had approximately 18.51% interest in Surfing Platform before the corporate reorganisation of the Group. Details of the corporate reorganisation are set out in the paragraph headed Corporate reorganisation in appendix IV to this prospectus. 76
Sung Yan Wai, Lau Kam Kwok, Dickson, Martin He, Chan Wai Kwong, Joel became the Shareholders because of their investments in Gold Finch, a shareholder of Algebra which had approximately 18.51% interest in Surfing Platform before the corporate reorganisation of the Group. In addition, Lau Kam Kwok, Dickson is an ex-employee of the Group whose employment with the Group has ceased from 31st August, 2001. The shares of Surfing Platform were purchased by each of the above-mentioned individual investors solely out of their own funds and/or settled by assets owned by them. The subscription of the shares of Surfing Platform was not financed by any other party connected with the Company, the directors, the chief executives, substantial shareholders and/or initial management shareholders of the Company or any of their respective associates. 11. Save as disclosed in this prospectus and apart from their respective in Surfing Platform prior to the corporate reorganisation (details of which are set out in appendix IV to this prospectus), each of Angel Ventures, MC Capital, Mitsubishi Corporation, Webberton, K&P, Quam, Positivism, Lawrence Lee, Yip Ying Chi, Benjamin, Cheung Miu, Ching Hiu Yuen, Chui Shing Tai, Steadman, Sung Yan Wai, Martin He, Chan Wai Kwong, Joel, Ngan Hing Hon, Lee Yuen Lai, Jean Lee, Ma Robert Kam Fook, Tham Seng Yum, Ronald and Lau Kam Kwok, Dickson is an independent third party not connected with the Company, the directors, chief executives, substantial shareholders and initial management shareholders of the Company or any of their respective associates. 77
Set out below is a summary of the number of Shares, approximate average cost of investment per Share, as well as approximate before and after Conversion the respective Placing Price of HK$0.32 and HK$0.38 per (being the lowest and highest price of the indicative range of the Placing Price), of the Shareholders who will be subject to lock up undertakings the Listing Date: Number of Shares before the HK$0.32 per the HK$0.38 per Period of lock up immediately after the Listing Date Date of first entry (directly / indirectly) average cost of investment per Share (Note (vi)) Notes Shareholders HK$ Initial Management Shareholders Upwise 116,371,349 25.97% 21.42% 21.66% 1 year 21st January, 2000 0.01 (i) Princeton Venture 51,860,472 18.00% 9.55% 9.65% 1 year 26th January, 2001 0.22 (i) One Focus 81,481,507 18.18% 15.00% 15.16% 1 year 21st January, 2000 0.07 (i) Wu Meng Jie 6,219,962 1.39% 1.14% 1.16% 1 year 21st January, 2000 0.02 (i) 255,933,290 63.54% 47.11% 47.63% Significant Shareholders Webberton 36,490,446 8.14% 6.72% 6.79% 6 months 24th January, 2000 0.12 (ii) Positivism 33,173,133 7.40% 6.11% 6.17% 6 months 24th January, 2000 0.02 (ii), (iv) Quam 27,644,416 6.18% 5.09% 5.15% 6 months 20th May, 2000 0.36 (ii) MC Capital 54,086,566 (Note (vii))/ 48,165,513 (Note (vii)) 3.70% 9.95% 8.97% 6 months 13th November, 2000 0.16 (ii), (v) 151,394,561/ 145,473,508 25.42% 27.87% 27.08% 78
Number of Shares before the HK$0.32 per the HK$0.38 per Period of lock up immediately after the Listing Date Date of first entry (directly / indirectly) average cost of investment per Share (Note (vi)) Notes Shareholders HK$ Public shareholders voluntarily undertaken to subject their s to lock-up period restrictions Angel Ventures 16,586,566 3.70% 3.05% 3.09% 6 months 24th January, 2000 0.12 (iii) Ngan Hing Hon 16,586,566 3.70% 3.05% 3.09% 6 months 13th March, 2000 0.10 (iii) Lee Yuen Lai 4,146,642 0.93% 0.76% 0.77% 6 months 13th March, 2000 0.10 (iii) Jean Lee 2,764,566 0.62% 0.51% 0.51% 6 months 7th June, 2000 0.36 (iii) Ma Robert Kam Fook 2,764,566 0.62% 0.51% 0.51% 6 months 7th June, 2000 0.36 (iii) Yip Ying Chi, Benjamin 2,487,985 0.56% 0.46% 0.46% 6 months 3rd February, 2000 0.12 (iii) Sung Yan Wai 821,035 0.18% 0.15% 0.15% 6 months 24th January, 2000 0.12 (iii) Chan Wai Kwong, Joel 738,102 0.16% 0.14% 0.14% 6 months 24th January, 2000 0.12 (iii) Cheung Miu 621,996 0.14% 0.11% 0.12% 6 months 3rd February, 2000 0.12 (iii) Ching Hiu Yuen 621,996 0.14% 0.11% 0.12% 6 months 3rd February, 2000 0.12 (iii) Chui Shing Tai, Steadman 414,664 0.09% 0.08% 0.08% 6 months 3rd February, 2000 0.12 (iii) Lau Kam Kwok, Dickson 410,518 0.09% 0.08% 0.08% 6 months 24th January, 2000 0.12 (iii) Tham Seng Yum, Ronald 276,581 0.06% 0.05% 0.05% 6 months 7th June, 2000 0.36 (iii) Martin He 244,652 0.05% 0.05% 0.04% 6 months 24th January, 2000 0.12 (iii) 49,486,435 11.04% 9.11% 9.21% Other public Shareholders pursuant to the Placing 86,400,000 n/a 15.91% 16.08% n/a 543,214,286/ 537,293,233 100% 100% 100% n/a 79
Notes: (i) (ii) (iii) (iv) (v) (vi) Each of the Initial Management Shareholders has undertaken to the Company, First Shanghai (on behalf of the Underwriters) and the Stock Exchange that for a period of 12 months from the Listing Date, it/he will not, save as provided in Rule 13.18 of the GEM Listing Rules, dispose of (nor enter into any agreement to dispose of) nor permit the registered holder to dispose of (nor enter into any agreement to dispose of) any of its/his direct or indirect interests in the Relevant Securities. Each of the Significant Shareholders has undertaken to the Company, First Shanghai (on behalf of the Underwriters) and the Stock Exchange that for a period of six months from the Listing Date, it/he will not, save as provided in Rule 13.18 of the GEM Listing Rules, dispose of (nor enter into any agreement to dispose of) nor permit the registered holder to dispose of (nor enter into any agreement to dispose of) any of its/his direct or indirect interests in the Relevant Securities. Each of K&P, Webberton, Lawrence Lee, Positivism, Quam and MC Capital has further undertaken to the Company and First Shanghai (on behalf of the Underwriters) that for the Second Lock-up Period, it/he will not dispose of (nor enter into any agreement to dispose of) more than one-sixth of its/his direct or indirect interests in the Relevant Securities per month. These Shareholders have undertaken to the Company and First Shanghai (on behalf of the Underwriters) that for a period of six months from the Listing Date, it/he/she will not dispose of (nor enter into any agreement to dispose of) nor permit the registered holder thereof to dispose of (nor enter into any agreement to dispose of) any of its/his/her direct or indirect interests in the Relevant Securities. Mr. Ma, who is beneficially interested in 4.70% of the issued share capital of Angel Ventures Limited, has further undertaken to the Company, First Shanghai (on behalf of the Underwriters) and the Stock Exchange that he will not dispose of (nor enter into any arrangement to dispose of) nor permit the registered holder thereof to dispose of (nor enter into any arrangement to dispose of) any of his interest in Angel Ventures Limited for a period of 12 months from the Listing Date. Pursuant to a loan agreement entered into between Mr. Ma and Mr. Ren dated 20th May, 2001 ( Loan Agreement ), Mr. Ren pledged all of his 871 Shares in One Focus ( Pledged Shares ) (representing the entire issued share capital of One Focus) to Mr. Ma as security for the repayment of a loan of HK$5,502,900, which shall be repaid by five annual instalments of HK$1,100,580 each on the 31st day of December of each year commencing on 31st December, 2001. Mr. Ren has undertaken to the Company, First Shanghai (on behalf of the Underwriters) and the Stock Exchange that he will not dispose of (nor enter into any agreement to dispose of) any of the Pledged Shares or any of his rights, title or interests therein during the period of 12 months from the Listing Date and Mr. Ma has undertaken to the Company, First Shanghai (on behalf of the Underwriters) and the Stock Exchange that he will not dispose of (nor enter into any agreement to dispose of) any of his interests in the Pledged Shares or any of his rights, title or interests under the Loan Agreement or the security created thereunder nor to exercise his rights to realise the security given to him in respect of any of the Pledged Shares during the period of 12 months from the Listing Date. Immediately before the Placing and the but after Issue, MC Capital holds 16,586,566 Shares, which represents approximately 3.70% of the issued share capital of the Company. Based on HK$0.32 and HK$0.38 per and the outstanding principal of the Convertible Bond of HK$6,000,000, the number of Shares that will be converted under the Convertible Bond will be 37,500,000 and 31,578,947 respectively, which represents approximately 6.90% and 5.88% of the issued share capital of the Company respectively. As such,, based on the Placing Price of HK$0.32 and HK$0.38 per, the number of Shares owned by MC Capital will be 54,086,566 and 48,165,513 respectively, which represents approximately 9.96% and 8.96% of the issued share capital of the Company respectively. The average cost of investment per Share is calculated based on 540,000,000 Shares issued and to be issued immediately after based on HK$0.35 per. 80