On 13 May 2008 the General Meeting of Shareholders of AS Arco Vara (Arco Vara) authorized Arco Vara to buy back its own shares in five years, provided that such buy back shall not exceed 10% of the aggregate value of issued nominal share capital of Arco Vara. The authorized maximum number of shares which can be acquired is thereby 9 528 415. On 9 July 2008 the Management Board of Arco Vara decided to initiate the share buyback program in accordance with the resolution of General Meeting of Shareholders. Based on the Management Board decision the aggregate consideration under this program will be 4.0 million Estonian kroons (0.26 million euros) and maximum of 450 000 shares may be acquired. The program will start on 10 July 2008 and will end on 5 September 2008. The purpose of the program is to reduce the capital of Arco Vara or to use the acquired shares for planned employee share option scheme as the Management Board believes current share price level and liquidity position of the group provide a favourable opportunity for this purpose. The share buyback program is conducted in compliance with the provisions of the European Commission's regulation No. 2273/2003 of 22 December 2003, stating the exemptions for share buyback programs. Arco Vara has appointed SEB Pank as lead manager of the program to buy the shares back on behalf of Arco Vara under separate agreement. SEB Pank will be independent on its trading decisions irrespective of and without influence from Arco Vara as to the timing of the purchases as well as carry out the buyback according to the regulations and within the framework of the program. The share buyback will be initiated under the following framework: 1) The maximum amount of shares bought will not exceed 450 000 shares, which corresponds to 0.47% of the issued share capital of Arco Vara; 2) The maximum aggregate consideration for the Arco Vara shares bought will not exceed 4.0 million Estonian kroons (0.26 million euros); 3) In one single day the amount of shares bought will not exceed 25% of the average daily volume of Arco Vara shares traded in the 20 preceding trading days on the Tallinn Stock Exchange. In case of extreme low liquidity of the share the company may exceed the 25% limit in which case the amount of shares bought will not exceed 50% of the average daily volume traded in the 20 preceding trading days. 4) The purchase price: a) does not exceed the share price of the last independent trade; and b) does not exceed the highest current independent bid of Arco Vara share on Tallinn Stock Exchange; and c) is not less than half of the nominal value of the share. Arco Vara does not own currently any of its own shares. At least every seven trading days from the start of this program Arco Vara will give an update about the status of the program by issuing an announcement in respect of the transactions made under the program. Heigo Metsoja IRO +372 6144 654 heigo.metsoja@arcovara.ee http://www.arcorealestate.com