Shanghai (ZXZC)- Geely Automobile Holdings Limited (the Company) announced that it entered into a licensing agreement with Zhejiang Geely Holding Group (Geely Holding) on September 24 pursuant to which the Group (the Company and its subsidiaries) agreed to license the intellectual properties and the foreground intellectual properties to Geely Holding for the design, development, manufacturing, sale, marketing and distribution of the licensed models within the agreed regions during the licensed period.

The term “licensed model” shall mean anyone of the below models, namely, the NL-3 Model (also known as “Geely Boyue”), the SX11 Model and the VF11 Model.

Under the licensing agreement, Geely Holding is permitted to sub-license the intellectual properties and the foreground intellectual properties to the Proton Group for their design, development, manufacturing, sale, marketing and distribution of the licensed models under approved time and region conditions.

The Proton Group refers to Proton Holdings Berhad (Proton) and its subsidiaries. Proton is a private limited liability company incorporated in Malaysia, and is owned as to 49.9% by Geely Holding Group (referring to Geely Holding and its subsidiaries).

The total license fee for the intellectual properties is RMB 1.344 billion, which shall be paid by Geely Holding in five equal annual installments over the course of five years from the date on which the licensed period for the relevant licensed models begins.

On the same day, the Group agreed to sell, and the Geely Holding Group (referring to Geely Holding and its subsidiaries) agreed to purchase, CBUs (complete builtup unit), CKDs (complete knock down kit) and related after-sales parts of the licensed models for a term of three years ending on December 31, 2020.

In accordance with the Proton Sales Agreement, the CBUs, CKDs and related after-sales parts of the licensed models to be purchased by Geely Holding Group will be sold to Proton Group for their sale, marketing and distribution in the license regions.

The proposed annual sales caps under the Proton Sales Agreement for each of the 3 years ending December 31, 2020 are RMB398,729,892, RMB3,803,497,732 and RMB4,147,700,048 respectively.

The Proton Sales Agreement hereby refers to the agreement entered into between the Company and Geely Holding on 24 September 2018 in relation to the sale of CBUs, CKDs and related after-sales parts of the licensed models by the Group to the Geely Holding Group.