Common use of Performance Thresholds Clause in Contracts

Performance Thresholds. The distribution of the Escrow Shares shall be based upon the following performance thresholds (the “Performance Thresholds”) for the fiscal years ended December 31, 2009 (“Fiscal Year 2009”) and December 31, 2010 (“Fiscal Year 2010”): (a) The Fiscal Year 2009 Performance Threshold shall be audited Net Income equal to or greater than $7,700,000 (the “2009 PT”); (b) The Fiscal Year 2010 Performance Threshold shall be audited Net Income equal to or greater than $14,000,000 (the “2010 PT”); (c) For the purposes of this Agreement, “Net Income” shall be defined in accordance with US GAAP and reported by the Company in its audited financial statements for each of the Fiscal Year 2009 and Fiscal Year 2010; provided, however, that Net Income for each of Fiscal Year 2009 and Fiscal Year 2010 shall be increased by any non-cash charges incurred (i) as a result of the Financing Transaction, including without limitation, as a result of the issuance and/or conversion of the Preferred Shares, and the issuance and/or exercise of the Warrants, (ii) as a result of the release of the Escrow Shares to the Principal Stockholder and/or the Purchasers, as applicable, pursuant to the terms of this Agreement, (iii) as a result of the issuance of ordinary shares of the Principal Stockholder to Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ and Ms. ▇▇ ▇▇▇ (the “PRC Shareholders”), upon the exercise of options granted to the PRC Shareholders by the Principal Stockholder, as of the date hereof, (iv) as a result of the issuance of warrants to any placement agent and its designees in connection with the Financing Transaction, (v) the exercise of any warrants to purchase Common Stock outstanding as of the date hereof, and (vi) the issuance under any performance based equity incentive plan adopted by the Company.

Performance Thresholds. (a) The distribution of the Escrow Shares shall be based upon the following performance thresholds (the “Performance Thresholds”) for the fiscal years year ended December 31, 2009 (“Fiscal Year 2009”) and December 31, 2010 (“Fiscal Year 2010”): (a) The Fiscal Year 2009 Performance Threshold 2008 shall be audited Net Income equal to or greater than $7,700,000 28,000,000 and Fully Diluted Earnings Per Share (as defined below) equal to $0.73 (the “2009 PTPerformance Thresholds”);. (b) The Fiscal Year 2010 Whether the Performance Threshold Thresholds have been met shall be determined on the date the Company’s audited Net Income equal financial statements for the corresponding fiscal year are filed with the Securities and Exchange Commission pursuant to or greater than $14,000,000 the reporting requirements of the Securities Exchange Act of 1934 (the “2010 PTExchange Act”);, as amended, which includes any extensions with respect thereof pursuant to Rule 12b-25 of the Exchange Act (such date being hereinafter referred to as the “Audit Date”); and, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, and therefore prepares and furnishes the documents required by Section 6 of the Registration Rights Agreement, the Performance Thresholds shall be determined in accordance with such prepared documents and at such time. (c) For With respect to the purposes of this AgreementPerformance Thresholds, “Net Income” shall be defined in accordance with US GAAP and reported by the Company in its audited financial statements for each of the Fiscal Year 2009 and Fiscal Year 2010; provided2008, however, plus any amounts that Net Income for each of Fiscal Year 2009 and Fiscal Year 2010 shall be increased by any may have been recorded as non-cash charges incurred or liabilities on the 2008 financial statements, respectively, due to the application of EITF No. 00-19 that are associated with (i) as a result any outstanding Warrants of the Financing Transaction, including without limitation, as a result of the issuance and/or conversion of the Preferred Shares, and the issuance and/or exercise of the WarrantsCompany, (ii) as a result of the transactions contemplated by this Agreement, including, without limitation the release of the any Escrow Shares to the Principal Stockholder and/or the Purchasers, as applicable, pursuant to the terms of this AgreementRedsky Group, (iii) as any issuance of shares of Common Stock or option grants under a result performance based stock incentive plan that was in existence on the Closing Date, and (iv) the conversion of any shares of preferred stock. “Fully Diluted Earnings Per Share” means after tax Net Income divided by the number of shares of Common Stock outstanding on a fully diluted basis, which number of shares of Common Stock shall include, without limitation, (x) the number of shares of Common Stock issuable upon conversion of the issuance of ordinary Company’s then outstanding shares of Series A Preferred and Series B Preferred, and (y) the Principal Stockholder to Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ and Ms. ▇▇ ▇▇▇ (the “PRC Shareholders”), number of shares of Common Stock issuable upon the exercise of any then outstanding warrants, options granted to or other securities convertible into shares of Common Stock of the PRC Shareholders by the Principal StockholderCompany, as of the date hereofDecember 31, (iv) as a result of the issuance of warrants to any placement agent and its designees in connection with the Financing Transaction, (v) the exercise of any warrants to purchase Common Stock outstanding as of the date hereof, and (vi) the issuance under any performance based equity incentive plan adopted by the Company2008.