Common use of Performance Commitment Clause in Contracts

Performance Commitment. Party B hereby undertakes to Party A to ensure that the Company shall achieve the following performance targets (“Performance Targets”, among which the Performance Target in 2019 the “2019 Performance Target” and the Performance Target in 2020 the “2020 Performance Target”) in 2019 and 2020 (collectively, the “Performance Commitment Period”): (1) The target number of daily active users (excluding repeated counting) of the Company’s APP (including but not limited to Tadu Wenxue APP, Xiangcun Xiaoshuo APP, Mitao Xiaoshuo APP, etc.) (statistical buried points will be added to the Company’s APPs according to the buried point document standards of the Phoenix Network Data Center) shall be not less than the following respectively: (a) in 2019: the daily average in December of 1.12 million, the daily average in the whole year of 900,000 (the above user number indicators shall be calculated by excluding repeated counting of users of a number of APPs and the aforesaid aggregated average number of users for the whole year (excluding repeated counting) no less than 720,000; (b) in 2020: the daily average in December of 1.4 million, the daily average in the whole year of 1.08 million (the above user number indicators shall be calculated by excluding repeated counting of users of a number of APPs and the aforesaid aggregated average number of users for the whole year (excluding repeated counting) no less than 864,000; (“User Number Target”); (2) The target pieces of originally created literature works for which the Company has obtained the valid exclusive information network distribution rights and the adaptation rights through entering into agreements (based on the valid exclusive IPR license/authorization contracts) shall be no fewer than 5,315 pieces and 5,950 pieces respectively (“Number of Works Target”); (3) The annual revenue of the Company audited by the auditor designated by Party A shall not be less than: RMB 180,008,000 and RMB 235,000,000 (the “Annual Income Target”); (4) The annual net profit of the Company audited by the auditor designated by Party A shall not be less than RMB 12,350,400 and RMB 17,753,000 (the “Annual Net Profit Target”). Whether the above Performance Targets are achieved shall be determined ultimately based on the audit results by the auditor retained by Party A.