Market announcement

Title

NOTICE CALLING EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

Message

Dear Shareholder of Arco Vara AS

The management board of Arco Vara AS (registry code 10261718, located at Jõe
2B, Tallinn 10151) hereby calls an extraordinary general meeting of
shareholders to be held on December 11, 2009 at 9.00 a.m. in Tallinn at Reval
Hotel Central, Narva mnt 7C, conference room Studio II. 

The agenda of the extraordinary general meeting of shareholders: 

1.	Extension of the term of office of the members of the supervisory board
The supervisory board proposes to the shareholders to extend the term of office
of the current members of the supervisory board until December 11, 2014, i.e.
to decide to extend the term of office for five years. 

2.	Remuneration of supervisory board members
The supervisory board proposes to the shareholders that the monthly net
remuneration to be paid to the members of the supervisory board is EEK 15,000
(fifteen thousand) (959 EUR). 

3.	Amendments of the articles of association 
In connection with the planned share capital reduction and the amendments of
the Commercial Code that entered into force on November 15, 2009, the
supervisory board proposes to the shareholders to amend the articles of
association of Arco Vara AS and to adopt the new wording of the articles of
association as follows: 

3.1.	to amend clause 2.1 and formulate it as follows: „2.1 The minimum amount
of the Company's share capital shall be 45,000,000 Estonian kroons and the
maximum amount of  the share capital shall be 180,000,000 Estonian kroons.” 
3.2.	to amend clause 3.3 and formulate it as follows: „3.3. An extraordinary
general meeting of shareholders shall be called if the management board of the
Company considers it to be necessary or if this is demanded by the Company's
supervisory board, auditor or shareholders whose shares represent at least
one-twentieth of the share capital as well as in other events prescribed by
law. The request for calling an extraordinary general meeting of shareholders
shall be sent to the management board of the Company in writing, by showing the
reason for calling. The shareholders shall be given at least three week's
notice of an extraordinary general meeting of shareholders.” 
3.3.	to amend clause 3.6 and formulate it as follows: „3.6. The circle of
shareholders entitled to participate in the general meeting of shareholders
shall be determined as of seven days prior to  the date of holding the
meeting.“ 

4.	Reduction of share capital 
In order to decrease volatility the price of shares of Arco Vara AS, to provide
an opportunity for more efficient pricing of the shares of Arco Vara AS on the
stock exchange and to provide an opportunity for further strengthening the
capital structure, the supervisory board proposes to reduce the share capital
of Arco Vara AS as follows: 

4.1.	first  to reduce the share capital by cancellation of 10 shares so that 5
shares owned by Toletum OÜ (registry code 11011219) and 5 shares owned by HM
Investeeringud OÜ (registry code 10963165) (hereinafter together the
“Stabilizing shareholders”) shall be cancelled; and 
4.2.	thereafter to reduce the share capital by cancellation of 19/20 of all
shares, whereas: 
4.2.1.	19/20 of all shares owned by each shareholder shall be cancelled; and
4.2.2.	if the number of shares owned by a shareholder (hereinafter the
“Stabilized shareholder”) does not enable to cancel whole number of shares,
whole number of shares owned by Stabilized shareholder shall be cancelled
(rounded downwards) and additionally a number of shares (hereinafter the
“Compensation shares”), that the Stabilized shareholder should have owned in
order to enable cancellation of whole number of shares without rounding, shall
be cancelled from the shares owned by the Stabilizing shareholders (e.g. if the
Stabilized shareholder has 30 shares, 28 thereof shall be cancelled (i.e. the
Stabilized shareholder will have 2 shares after the reduction of the share
capital) and additionally 10 Compensation shares owned by the Stabilizing
shareholders shall be cancelled); 
4.2.3.	Compensation shares shall be cancelled in equal parts from the shares
owned by the Stabilizing shareholders. If the Compensation shares cannot be
cancelled in equal parts from the shares owned by the Stabilizing shareholders,
then more shares belonging to HM Investeeringud OÜ shall be cancelled. 

As a result of the reduction of share capital, the number of all shares will be
4,764,207, i.e. 90,519,943 shares will be cancelled. The extent of the
reduction of share capital will be EEK 905,199,430 (57,852,788 EUR). 

The list of shareholders, whose shares will be cancelled, will be determined at
11.59 p.m. on March 1, 2010. 

Materials of the extraordinary general meeting of shareholders of Arco Vara AS,
including draft articles of association, annual report of the previous
financial year and draft resolutions of the meeting are available through
internet website of Arco Vara AS www.arcorealestate.com (menu ‘Investor
Relations', submenu ‘General meeting of Arco Vara AS') and on workdays from
9.00 a.m. till 5.00 p.m. at the office of Arco Vara AS in Tallinn, Jõe 2B. 

Questions about the items on the agenda can be sent by e-mail to
yldkoosolek@arcovara.ee. 

Shareholders representing at least 1/20 of the share capital may propose draft
resolutions with respect to each item on the agenda. Proposals must be sent in
writing to Arco Vara AS, Jõe 2B, 10151 Tallinn, by December 8, 2009. Proposals
together with other materials of the extraordinary general meeting will be
published on the internet website of Arco Vara AS www.arcorealestate.com (menu
‘Investor Relations', submenu ‘General meeting of Arco Vara AS') and on
workdays from 9.00 a.m. till 5.00 p.m. at the office of Arco Vara AS in
Tallinn, Jõe 2B. 

The list of shareholders entitled to participate at the extraordinary general
meeting of shareholders shall be determined at 11.59 p.m. on December 4, 2009,
i.e. seven days prior to the meeting. 

Registration to the extraordinary general meeting of shareholders will begin at
8.45 a.m. on December 11, 2009. A representative of a shareholder, being a
legal person, must present an extract from the respective (commercial)
register, where the legal person is registered (for an Estonian legal person, a
copy of the Commercial Register's card B, which is not older than 15 days),
proving the right of the person to represent the shareholder (legal
authorisation), and the representative's identity document; if the person is
not a legal representative, a duly executed power of attorney (authorisation by
transaction) in writing and the representative's identity document must be
produced in addition to the extract from the register. A shareholder, being a
natural person, must present a passport or identity card; a representative must
also present a duly executed power of attorney in writing. Shareholders may
notify Arco Vara AS of giving a proxy or cancelling the proxy by e-mail to
yldkoosolek@arcovara.ee or by fax +372 6144631 by 5.00 p.m. on December 9,
2009, by using forms published on the internet website of Arco Vara AS. 

Documents (except for the power of attorney) of a legal person registered in a
foreign country must be legalised by the Ministry of Foreign Affairs of the
Republic of Estonia or by a foreign representation of the Republic of Estonia,
or confirmed with apostille. 

1 EUR = 15.6466  EEK

Kind regards,
Management Board of Arco Vara