Anti-dilution Compensation. If the Target Company intends to increase its registered capital at a subscription price lower than that in the Investment (except for reserved shares for its employee stock options), the Actual Controllers and/or the Founding Shareholders shall transfer the registered capital held by them in the Target Company to the Investor as compensation, until the subscription price in the Investment equals that for the increased registered capital (“New Low Price”). Registered capital transferred to the Investor as compensation = (Investment Amount – Acquired Registered Capital * New Low Price) / New Low Price
Anti-dilution Compensation. If the final price or cost paid by any Investor (including the existing Shareholders and any newly joined shareholders) in any new round of investment of the Target Company in the future (either by means of equity interest transfer or capital increase) is lower than the Investors Subscription Price in accordance with certain agreement or arrangement entered into by and among the Target Company, the NIO Parties and the persons acting in concert with the Target Company and the NIO Parties, the Investors Subscription Price shall be re-calculated based on the following formula: P2 = P1 × (A + B) ÷ (A + C), of which, P2 = the Investors Subscription Price after the adjustment; P1 = the initial Investors Subscription Price; A = the registered capital of the Target Company prior to the above mentioned capital increase on a fully diluted basis (i.e., assuming that each Shareholder or any other party has exercised its subscription right, convertible loan or other rights convertible into any equity interest in the Target Company); B = the registered capital of the Target Company that can be acquired at P1 price with the above mentioned capital increase; C = the registered capital of the Target Company actually increased in the above mentioned capital increase. The Investors shall have the right to re-calculate the amount of the registered capital of the Target Company that they are entitled to, based on the adjusted Investors Subscription Price. To the extent permitted by Laws, the difference between such amount and the registered capital of the Target Company that the Investors subscribe for in accordance with the Investment Agreement shall be made up by the Target Company and the NIO Parties as follows: (i) the additional issuance of equity interests by the Target Company to the Investors at the lowest price permitted by applicable Laws; and (ii) the transfer by the NIO Parties of their equity interests in the Target Company to the Investors at the lowest price permitted by applicable Laws. If such compensation is made by means of subclause (i) above, the subscription price for the equity interests that the Investors shall pay to the Target Company shall be borne by the NIO Parties. Other expenses and costs incurred in the process of compensation (if any) shall be borne by the NIO Parties.
