TERMS AND CONDITIONS OF PUBLIC ONLINE AUCTION

TERMS AND CONDITIONS OF PUBLIC ONLINE AUCTION Pursuant to the State Assets Act and the Regulation no 14 of 28 April 2010 of the Minister of the Environment Procedure for the Grant of Use and Selling of State Assets that are under the Administration of the Ministry of the Environment the Estonian Land Board is selling state-owned immovables at public online auctions. Auction notices are published at least two weeks prior to the auction. The auction notice is also published at least in one of the national daily newspapers. Information about the properties offered for sale is available at the following addresses: www.ametlikudteadaanded.ee www.maaamet.ee/ www. maaamet.ee/maaoksjon PARTICIPATION Participation in auction is open to all persons considering the restrictions provided in law. State-owned land can be purchased by both Estonian and foreign citizens and companies, unless there are restrictions set out in law for the acquisition of immovables. Before placing any bids the participant in auction is obliged: to inspect the immovable in nature to read carefully all information on the Land Board s homepage concerning the sales object, including the map of restrictions, and all attached documents. The interested person may inspect the immovable in nature at any time, unless the time and terms of inspection are specified in the auction notice. Failure to inspect the property or read the information does not give the bidder any right to claim later that he/she was unaware of the property s condition. To participate in the online auction and to place a bid, it is necessary to log in and register in the Land Board s auction environment at www.maaamet.ee/maaoksjon. It is possible to log in with the Estonian ID-card or through the bank links. The banks through which it is possible to log in are Danske Bank, Swedbank and SEB. Further information on how to log in into online banking services can be found on the web pages of the above banks. Bids can be placed in two ways: on one s own behalf or as an authorized representative for somebody else. While participating on one s own behalf the participant shall fill in the registration form with is own data, i.e. name, personal identification code, address, phone number, e-mail address to which he wants to receive auction related documents. At the auction legal persons and physical persons may place bids also through a representative, who has been provided with the right of representation in a

format, which can be reproduced in writing. The representative is obliged to present to the sales organiser (Land Board) the letter of authorization before the end of the auction either by e-mail (maaamet@maaamet.ee) or by mail (Maa-amet Akadeemia 4, Tartu 51003). If necessary, the organiser shall be entitled to request presentation of the letter of authorization also after the end of the auction. Legal persons participating in the auction shall check that the right of representation of their representative or of the person who provided the letter of authorisation to the representative is entered also into the electronic commercial register, so that the sales organiser would be able to verify the validity of right of representation. To participate as a representative, the registration form shall be filled in both with the data of the person (legal person or private person) on the behalf of whom the representative would like bid (bidder) and of the representative himself. In registering the following details must be provided: the representative s name, register or personal identification code, contact address (postal or e-mail), phone number the bidder s (person on behalf of whom the bid is placed) name, register or personal identification code, contact address (through which the bidder can be conducted), phone number and e-mail address as well as the address to which the bidder would like to receive auction related documents. When the person who placed a bid on behalf of somebody else did not have the right of representation at the moment of bidding, he will not be considered as participant in the auction. In case his bids affected significantly the auction results, the auction will be considered as failed and the results will be left unendorsed. Before registration the terms and conditions of auction must be read and a corresponding box checked. By doing it the participant confirms that he/she is aware of and accepts all the terms and conditions of the auction. The participant who has logged in and registered can place bids only after the guarantee deposit and participation fee (if there is any) paid by him has been received in the account of the Ministry of Finance. PAYMENT OF GUARANTEE DEPOSIT AND PARTICIPATION FEE In order to be able to place bids at the online auction, a guarantee deposit the amount of which and way of payment are indicated in the auction notice shall be paid. The auction environment generates a payment notice for the buyer that contains information needed for the payment of deposit. The deposit amount shall be transferred to the bank account of the Ministry of Finance given in the payment notice by choosing the appropriate bank. The payer can choose the way of transfer (either through Internet banking service or in bank office). While making the transfer, it is necessary to indicate in the payment order all the data given in the payment notice. If there are any inaccuracies in data provided during the execution of payment, it will not be possible to participate in the auction.

When paying the deposit in cash in a bank office or transferring it from a bank in a foreign country, appropriate columns in the auction environment must be filled in with IBAN code, name of bank (if in a foreign country), owner of account and account number for the refund of the guarantee deposit. At the public auction the person who decides the sales of state assets may set a participation fee, which can be up to two percent of the starting price. When the participation fee has been set, it shall be paid prior to bidding to the same account number and with the same reference number as the guarantee deposit. The participation fee is non-refundable. PLACEMENT OF BIDS The participant who have registered can start bidding only after the guarantee deposit and participation fee (if there is any) has been received on the account of the Ministry of Finance indicated in the payment notice. When the participant does not pay the guarantee deposit (and participation fee if there is any) or the bank transfer does not correctly include all required data, the access to bidding will be denied. Until the closing date the participant is allowed to place an unlimited number of bids that cannot be below the starting price. Auction participants enter their bids online and in euros as an integer (without euro cents) by the bid increment set in the auction conditions. All bids are entered into the list of bids, which is attached to the minutes of the auction. The number of auction participants, the usernames and the bids placed by the participants are visible to all participants who have paid the guarantee deposit and participation fee (if there is any) pursuant to the payment notice. In case any technical problems are encountered during the auction or placement of bids, the bidder shall immediately inform the contact persons indicated in the auction notice thereof. By confirming the bid the bidder accepts the responsibility to pay for the sales object the offered price and to enter into sales contract under the terms and conditions and deadline as set out in the auction notice. The auction participants shall be bound to their bid from the moment of placing the bid until the endorsement of auction results. The person or persons in favour of whom the results are endorsed shall be bound to their bids until the conclusion of contract. AUCTION RESULTS The auction will end on the date as specified in the auction conditions unless it is an extended time auction. In the case of an extended time auction, the auction will be declared closed on the date and time as specified in the auction conditions when no new bids are received during the period that is specified as a dynamic end in the auction procedure. When a new bid is placed during that period, the close time is automatically extended by that period starting from the moment of the bid placement. This will continue until no new bids are placed within the dynamic end period. Then the auction is declared closed. The winner of the online auction is the participant who placed the highest bid.

The results of a public online auction are recorded in the minutes of auction, which is available to the participants in the auction environment at www.maaamet.ee/maaoksjon immediately after the winner has been declared. The minutes are accessible only to those participants who made a bid. When the sales organiser has been notified of technical problems during bidding, the organizing committee will go through the received complaints and check the log entries of the auction environment as well as other important factors. The committee will also check the authorizations of participants who placed bids on behalf of somebody else. In justified cases the committee will make changes in the auction results published in the auction environment and/or declare the auction failed and recommend the nonendorsement of auction results in the following cases: - the committee ascertains the occurrence of a technical problem that has caused violation of the procedure to an extent affecting the auction results - at an online auction bids were placed by at least one person who had no right to participate and the participation of such a person or persons affected significantly the auction results - no bids were placed at all or none of the bids met the requirements When the committee has made amendments to the minutes, all participants shall be informed thereof by delivering the minutes to them within 5 working days. The purchase right goes to the person in favour of whom the auction results will be endorsed with the order of the Minister of the Environment considering the rights of persons mentioned in 66 (6) and (7) and 105 (2-4) of the State Assets Act. RIGHT OF PRE-EMPTION pursuant to 66 (6) and (7) and 105 (2) of STATE ASSETS ACT Upon sales of a state-owned immovable the intended use of which is profit-yielding land and which contain a parcel of forest land, the owner of the bordering immovable, whose immovable s intended use is also profit-yielding land and which includes a forest land parcel, and who participated in the auction but did not win, shall have the right of pre-emption for the acquisition of the land at the auction price. In order to exercise this right, the owner of the adjacent property must submit to the organiser of sales (Land Board) a written request therefor within 5 working days from the announcement of auction results. In case there are two or more adjacent neighbours willing to exercise this right, the owner of property who placed a higher bid than the others shall be preferred. Upon sales of a state-owned immovable the intended use of which is profit-yielding land and which contain a parcel of arable land or natural grassland, which are granted for use on legal basis, the user of land who participated in the auction but did not win, shall have the right of pre-emption for the acquisition of the land at the auction price. In order to exercise this right, the user of land must submit to the organiser of sales (Land Board) a written request therefor within 5 working days from the announcement of auction results. In case there are two or more entitled

persons, the person who exercises his right of use on a bigger proportion of the property to be sold shall be preferred. Upon sales of a state-owned immovable the intended use of which is profit-yielding land and which contain a parcel of arable land or natural grassland, which has previously not been granted for use pursuant to the State Assets Act and when more than half of this immovable to be sold has been used based on the contract of temporary use of land, the person who used the land prior to its retainment in state ownership shall have right to acquire the immovable at the auction price. For that he/she has to participate in the auction and when not winning to submit to the organiser of sales (Land Board) a written request for the exercise of his/her right of pre-emption within 5 working days from the announcement of auction results. To this request must be attached a copy of the contract of temporary use of land and, if available, also the plan of used area. When both the owner of the adjacent property and the person who uses land on legal basis (including the person who used more than half of the property to be sold based on the contract of temporary use) wish to exercise their right of pre-emption simultaneously, the person who uses land on legal basis shall be preferred. When the entitled person expresses timely his/her willingness to exercise the right of pre-emption, all rights and liabilities related to the purchase of land shall be transferred to the entitled person and the auction results shall be endorsed in his/her favour. When the entitled person applies for the exercise of pre-emption but fails to buy the immovable within the deadline set by the seller, the rights of acquisition shall be restored to the winner of the auction. In such a case the purchase right granted to the entitled person shall be invalidated by the order of the Minister of the Environment and the auction results will be endorsed in favour of the winner. To the winner of auction a deadline will be assigned by which he/she must enter into the sales contract, it can be up to one month from the date of assignment. ENDORSEMENT OF AUCTION RESULTS Within 20 working days from the announcement of the auction results the Minister of the Environment shall decide whether to endorse the results or not (e.g. due to failed auction). When the auction results are endorsed, the endorsement decision shall include the name of the winner and the bid amount. When the guarantee was set to be at least five percent from the starting price, the decision shall indicate also the name of the second-highest bidder and the bid amount. The auction will be declared failed and the results will not be endorsed in the following cases: 1) nobody registered their participation in the auction 2) no bids were placed or the bids did not meet the requirements 3) the participants violated the rules of auction procedure

4) there occurred agreements or coordinated activities between the participants during the auction that affected or could affect significantly the auction results 5) the winning bid at the auction, where no starting price was set, remained at a level that is economically unacceptable for the state. The action results will be left unendorsed also in the following cases: 1) the organiser of the auction violated the rules of auction procedure during the auction 2) the procedure provided by law was violated to the extent it affected the auction results 3) at least one of the participants who placed bids at online auction was not entitled to participate and the participation of this (these) person(s) affected significantly the auction results. The reason for leaving the results unendorsed must be indicated. When the auction results are left unendorsed, no sales contract will be entered into. When the auction results are left unendorsed due to the fact that the organiser of the sale has violated provisions of the State Assets Act, the Minister of the Environment regulation no 14 from 28 April 2010 Procedure for the Grant of Use and Selling of State Assets that are under the Administration of the Ministry of the Environment or other legislation, the organiser of the sale shall refund the full amount of the guarantee deposit to the auction participant. REFUND OF GUARANTEE DEPOSIT For the person who at the auction obtained the right to buy the land the guarantee deposit will be considered as a partial payment of the purchase price. For the rest of auction participants the organiser will return the guarantee deposit within 5 working days from decision made on the endorsement of results (the decision is made within 20 working days from the end of auction). The guarantee deposit is refunded also to the winner of auction in case the results were left unendorsed due to the violations by the organiser. As a rule the guarantee amount will be returned only to the account from which it was transferred. As an exception, the deposit will be refunded to the account given the registration form only in case it was paid in the bank in cash or transferred from a foreign bank. The guarantee deposit will not be refunded to the person, who caused the failure of the auction, non-endorsement of the results or due to whom no sales contract is entered into. If the immovable cannot be sold to the person, who initially obtained the right of purchase and the guarantee deposit has been refunded to other entitled persons (e.g. winner, adjacent neighbour, user of land or second highest bidder), before the results will be endorsed in his/her favour the entitled person shall again pay the guarantee deposit as prescribed by the organiser. To the person, who paid the guarantee deposit, but did not participate in bidding, the money will be refunded within 5 working days from the end of auction. In case the deposit was paid in cash, the sales organiser must be provided with the following information: the payer, the amount, the date of payment, the reference number and the

account number for refund. The sales organizer will refund the sum within 5 working days from receiving such information. AWARD OF CONTRACT The sales contract will be concluded with the winner of auction or with the entitled person, i.e the adjacent neighbour or legal user of land (further referred to as buyer), in favour of whom the auction results are endorsed with the order of the Minister of the Environment. The buyer can acquire state assets unless there are restrictions stipulated by law. Properties containing agricultural or forest land can be acquired under the conditions set out in 4 of the Restrictions on Acquisition of Immovables Act. In cases set out in 4, subsection 6, and 5 of the above law, the buyer shall present the county governor s authorization to the notary before the conclusion of the contract. A notarised sales contract of state assets (both the contract under the law of obligations and real right contract) shall be concluded within the deadline specified by the Minister of the Environment (indicated both in the sales decision and in the decision of results endorsement), which can be up to two months from the endorsement of results. If the buyer wants to prolong the deadline for the conclusion of contract, he/she shall present a reasoned written request to the organizer. The person deciding the sale (Minister of the Environment) accepts the request only in justified cases, including cases when there are obstacles beyond the control of the parties. Before the sales contract is entered into, the buyer must pay the purchase amount exceeding the guarantee deposit to the bank account of the Ministry of Finance or to the notary s deposit account. The notary fee and state fee shall be paid by the buyer. If pursuant to the Commercial Code the company to whom the contract is awarded shall have consent from its Board to conduct the transaction, such a document shall be presented upon the entry into the notarised sales contract. Prior to the entry into sales contract, the buyer is obliged to verify whether the immovable meets his/her expectations by carefully inspecting once more the condition of the immovable in nature as well as the information and documents published in the auction notice on the Land Board s homepage. If the buyer wants to read the draft sales contract beforehand, such a request must be sent to either the seller or the notary. Among other things the following terms and conditions will be set out in the sales contract: The buyer s confirmation that he/she is buying the sales object in the condition as it is at the moment of entry into the sales contract The buyer s confirmation that he/she has inspected the immovable and scrutinized the information published in the notice and that he/she is aware of its condition, properties, intended use, valid legal restrictions and has no claims in respect of those to the seller.

The seller shall not be held responsible for the non-conformity of immovable to the contract conditions providing the buyer was aware or should have been aware of the non-conformity at the moment of entry into contract. The seller s confirmation that the contract includes data and information of objects causing restrictions that is available in state registers and of which the seller was aware at the moment of entry into contract. The seller shall not be held responsible for heritage conservation requirements, nature conservation requirements and other restrictions arising from law or other hidden deficiencies, which have not been entered into state registers and of which the seller was unaware at the moment of entry into contract. If any deficiencies occur, the buyer shall inform the seller thereof within three months from the entry into sales contract. The transfer of possession of the sales object takes place at the moment of notarisation. Risks related to accidental destruction or damage to the immovable are transferred to the buyer with the transfer of possession. Pursuant to Land Tax Act, the buyer will liable for land tax starting from 1 st of January of the next year. The buyer s confirmation that no bankruptcy has been declared or bankruptcy proceedings commenced against him. Before the entry into contract the seller shall hand over to the buyer all documents related to the immovable that are at his disposal (e.g. a copy of the cadastral plan, a copy of boundary protocol (if available), a printout of restrictions map) The notary fee and state fee related to the contract conclusion shall be paid by the buyer. When the immovable is not transferred within the deadline set by the seller due to reasons caused by the entitled person (adjacent neighbour or person using land on legal basis), the auction winner shall have right to acquire the immovable within the deadline set by the buyer. When the winner of the auction fails to enter into the contract within the set deadline, or fails to present a guarantee for the performance of the contract, the sales organiser may award the contract at the value of the next highest bid to the person who placed that bid or entitled persons (if there are any). In this case the order with which the auction results were endorsed will be amended respectively and a deadline will be set for the contract conclusion. This deadline can be up to one month from the day such a decision was made. When the buyer evades the entry into contract and the auction results are annulled, the guarantee deposit will not be refunded to him/her. CONTESTATION OF THE PROCEDURE If the person who participated in the bidding procedure is of the opinion that this administrative proceeding or this administrative legislation has violated his/her rights or restricted his/her freedoms, he/she shall have right to contest the proceeding or legislation pursuant to procedure prescribed by the Administrative Procedure Act, i.e.

within 30 days from the day when the person became aware or should have become aware of the administrative legislation or proceeding to be contested. Decisions made during the sales procedure by the order of the Minister of the Environment can be contested only pursuant to 46 of the Code of Administrative Court Procedure by filing an appeal to the Tallinn Administrative Court within 30 days from the issue of the order.