Material Agreements

Presented below is a condensed description of the main points of the material agreements, that are outside the normal course of business, to which the companies in the Kardan Land China Group are a party:

8.20.1. Engagements with Lucky Hope

In December 2005, Kardan Land China entered into an acquisition agreement, a joint-venture agreement, a shareholders’ agreement and a loan agreement with a Group company from Hong Kong, Lucky Hope (“Lucky Hope”), in connection with the first venture that was built by the companies jointly in the city of Shenyang (“the First Agreement”): the QiliXiangdi project. Pursuant to the First Agreement, the parties are equal partners (each party having a 50% interest) in a joint venture for the construction and development of a residential and commercial real estate project in the suburbs of the city of Shenyang. The First Agreement sets forth the arrangements

between the parties in connection with the joint management of the project by them: the arrangements regarding the joint management of the company (including the right to hold the company seal), the identity of the auditors of the company, the arrangements regarding dividend distributions, the appointment of the chairman of the board of directors and a legal representative for the company, etc. Among other matters, the agreement provides that the board of directors of the project company will consist of six directors, half of whom will be appointed by Kardan Land China and half by Lucky Hope.

The terms set forth in the First agreement applied to all the other projects that Kardan Land China performed throughout China together with Lucky Hope, and also to all the real estate that it acquired for the development of additional projects together with Lucky Hope. Through to the date of the Report, 5 joint ventures had been established, within the framework of which 5 real estate projects, which are at various stages, are being managed in three cities in China. The additional projects held with Lucky Hopeare: City Dream, Palm Garden Olympic Garden and Suzy. It should be clarified that Kardan Land China has projects in China that it does not perform jointly with Lucky Hope. It was agreed that the board of directors of each project company will consist of six directors, half of whom will be appointed by Kardan Land China and half by Lucky Hope. Most of the project companies are held in equal shares by the parties (each holding 50%)40. The arrangements include equal voting rights on the board of directors, which, as stated, consist of an equal number of representatives of each shareholder. The chairman, who is appointed by Kardan Land China and holds the company seal, does not have an extra or a deciding vote at the board of directors.

It should be noted that the legal structure of the arrangements with Lucky Hope depend on the type of company established for each venture, in accordance with Chinese and Hong Kong law, as the case may be (some of the arrangements are set forth in the articles of association of the companies and some are set forth in agreements between the shareholders that constitute the deeds of incorporation of the company pursuant to the relevant local law). In some instances, an additional joint venture agreement dealing with the consent of the shareholders is signed within the framework of the deeds of incorporation. Consequently, Kardan Land China consolidates the project held with Lucky Hope according to the proportionate consolidation method.

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Consequently, and in light of the fact that Kardan Land China also has a 50% holding in the Galleria Chengdu project, GTC Holding consolidates the results of Kardan Land China according to the proportionate consolidation method.

8.20.2. Sale of land in Hangzhou

On January 21, 2011, Kardan Land China entered into an agreement for the sale of its holdings in a project in the city of Hangzhou for a consideration of RMB 269 million (EUR 29 million). The transaction was closed in April 2011 and Kardan Land recognized a gain of EUR 6.5 million with respect thereto in its financial statements for the second quarter of 2011. The project was at the planning stage, hence the transaction reflected a sale of land.

8.20.3. Sale of 50% of Galleria Chengdu

On June 9, 2011, an agreement was signed pursuant to which Kardan Land China would sell 50% of its holdings in the company that indirectly owns the Galleria Chengdu shopping center to the MGPA private equity fund (“the Buyer”), which is a private fund engaged in investments in the real estate sector and focusing on investments in Europe and Asia. On August 24, 2011, the transaction was closed. The transaction reflected a value of EUR 118 million for Galleria Chengdu. Kardan Land China continues to hold 50% of Galleria Chengdu, exercising joint control with the Buyer, and also continues to operate and manage the shopping center. As a result of the sale, Kardan Land recognized a gain of EUR 17 million with respect thereto in its financial statements for the third quarter of 2011, in addition to gains of EUR 27 million that had been recognized through to the date of sale with respect to revaluations in 2011.

8.20.4. Cancelled memorandum of understanding with regard to an allotment of shares

On December 27, 2011, Kardan Land China signed a memorandum of understanding with an investor (“the Investor”), pursuant to which the Investor would be allotted shares that would constitute (following the allotment) 10% of the issued share capital of Kardan Land China, in return for an investment in the share capital in an amount of RMB 333.33 million (EUR 41million according to the EUR exchange rate at the end of the year), reflecting a value of RMB 3.3 billion (EUR 407 million) for Kardan Land China, after the money according to the rate at the end of the year.

In January 2012, Kardan Land China and the Investor decided to terminate the process.