Dear Arco Vara AS shareholder, Arco Vara AS shareholders ordinary general meeting will take place on May 8th 2007 at 1PM in Tallinn, Tõnismägi 2, at the conference center of the National Public Library. The agenda of the general meeting: 1. Approval of the annual report. The Supervisory Board proposes the annual report for 2007 be approved. 2. Profit allocation 2.1 The Supervisory Board proposes the following allocation of the profit: Undivided profit as of 31.12.2007 in the amount of EUR 13 985 786 (EEK 210 830 000) to be divided as follows: a) allocation to the compulsory reserves EUR 727 251 (EEK 11 379 000) b) share of profit to be paid to shareholders (net dividend) will be EUR 2 378 152 (EEK 37 210 000), i.e. EUR ~0,025 per share. c) Rest of the profit at the amount of EUR 10 880 383 (EEK 170 241 000) to remain undivided. 2.2 The supervisory board proposes to approve the following regulation for paying of the dividends: according to the Tallinn stock exchange regulation, the list of shareholders entitled to dividends for financial year 2007 will be fixed at the 10. operating day following the general meeting, i.e. on May 22nd 2008 at 11:59 PM. Dividends will be paid on July 3rd 2008. 3. Appointment of auditor 3.1 The Supervisory Board proposes the shareholders appoint the auditor for one year (until the next ordinary shareholders general meeting) and appoint Ernst & Young Baltics AS as such auditor. 3.2. The Supervisory Board proposes the auditor be paid for auditing the 2008 annual report according to an agreement to be signed between the company and Ernst & Young Baltics AS. 4. Authorization for buyback of own shares The Supervisory Board proposes an authorization of the buyback of shares under following conditions: a) The company is entitled to buy back its own shares one year from the general shareholders meeting's decision. b) The face value of purchased shares may not exceed 10% of total equity capital in the calendar year. c) The sum paid for one share may not exceed the highest price paid on the Tallinn Stock Exchange for an Arco Vara AS share on the same day. d) Own shares will be paid for with assets exceeding equity capital, compulsory reserves and issue premium. 5. Recall of a member of the Supervisory Board and election of a new member Member of the Supervisory Board Mr Arti Arakas has asked to resign from the post. The Supervisory Board proposes Mr Arti Arakas be recalled from the post and a new member be elected, about whom further information will be provided by the Supervisory Board. The materials of the annual general meeting are available on the website of Arco Vara AS, address http://www.arcorealestate.com/investorile/uldinfo and in the office of Arco Vara AS at Jõe 2B, Tallinn weekdays between 9.00-17.00 Questions on the agenda items may be submitted via e-mail at yldkoosolek@arcovara.ee. Questions and answers shall be made public on the Arco Vara AS website on the internet. The list of shareholders entitled to participate at the annual general meeting shall be determined at 11:59PM on day immediately prior to the meeting. Registering to participate in the meeting will convene at 12:30PM on May 8th 2008. To register, we kindly ask shareholders to present an ID document and the representative of the shareholder additionally to present also a signed Power of Attorney or documents validating representation. Sincerely yours, Board of Arco Vara AS