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| Press Release (English) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| [Note: This is a translation prepared only for your reference. Japan Blue Sky Capital Partners, L.P , Japan Banking Investment Partners, L.P., Tokyo Capital Management Partners, L.P. and Cayman Strategic Partners, L.P. do not bear any responsibility for the accuracy of the translation. Please refer to and rely on the Japanese original version if there is any discrepancy.] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Announcement of the Commencement of the TOB
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| TOKYO (February 4, 2008) -- Japan Blue Sky Capital Partners, L.P., Japan Banking Investment Partners, L.P., Tokyo Capital Management Partners, L.P., and Cayman Strategic Partners, L.P. (collectively, the "Bidders") will commence the Tender Offer (the "TOB") to acquire shares and share purchase warrants (collectively, the "Shares") of The Tokyo Star Bank, Limited (the "Target Company"). 1. Purpose of the TOB (1) Outline of the TOB The TOB is jointly executed. Each of the Bidders is an exempted limited partnership, separately formed under the laws of the Cayman Islands. The four limited partnerships which form the Bidders, each based on its independent analysis, have decided that the minimum number of shares, etc. planned to be purchased through the TOB to be 524,999 shares, which is approximately 75% of the number of issued shares of the Target Company, as of the date of this press release and the Bidders intend to acquire 100% of the Target Company's issued shares (hereinafter including the shares which are/are to be issued by exercising the share purchase warrants issued in accordance with the resolution of the 5th Ordinary Shareholders' Meeting held on June 24, 2005 and resolution of the Board of Directors' meeting held on December 12, 2005 (the "Share Purchase Warrants") by the last day of the period of the TOB (the "TOB Period") with one share of the Target Company which the Bidders hold as of the date of this press release) and all of the Share Purchase Warrants granted by the Target Company through the TOB. The ratio of the shares, etc. tendered for the TOB (the "Tendered Shares") which each of the Bidder is planning to acquire is as follows:
However, Cayman Strategic Partners, L.P. will purchase all of the common stock less than one share and the Share Purchase Warrants less than one unit which results from the allocation based on the above-mentioned ratio. The Bidders hold the same goal of realizing an increase in the long term corporate value of the Target Company, and therefore jointly execute the TOB. Each of the Bidders is a limited partnership separately formed for the purpose of investing the Target Company, contributed to by investors from Japan and/or abroad, and is provided with information regarding the analysis and examination of the Target Company, and consultation regarding the structuring of the acquisition, by Advantage Partners, LLP. The Bidders have agreed with (a) LSF-TS Holdings SCA, the Target Company's largest shareholder holding 238,365 shares, representing approximately 34.05% of the total issued shares of the Target Company as of the end of September 2007, and (b) LSF-Tokyo Star Holdings SCA, the Target Company's second largest shareholder holding 238,362 shares, representing approximately 34.05% of the total issued shares of the Target Company as of the end of September 2007 (collectively, the "Largest Shareholders"), that the Largest Shareholders will respectively tender all of their shares of the Target Company for the TOB. (For the avoidance of doubt, the Financial Instruments and Exchange Law (Law No. 25 of 1948, as amended, the "Law") in Japan prescribes that any shareholder tendering his/her shares for a tender offer may withdraw his/her offer at any time during the period of the tender offer, and that even if the tendering shareholder withdraws his/her offer, the tender offeror may not claim any damages or penalty from such shareholder in connection with such withdrawal). The Target Company resolved to support the TOB at the meeting of the Board of Directors held on February 4, 2008. (2) Background of the TOB and Subsequent Management Policy In June 2001, the Target Company started its business, taking over the assets, liabilities and customer base of The Tokyo Sowa Bank, Ltd. that was established as a mutual bank in 1950. Since then, with the slogan "Financial Freedom: release our customers from financial concerns," the Target Company has offered innovative, value-added financial products and services and achieved growth by adopting unique strategies and approaches that differ from those of other banks, aiming to become "One of the most respected companies in the world" and to establish a long trusting relationship with customers. As to the corporate business, the Target Company focuses on customers who are in the "niche of the market" newly generated by the recent integration of mega banks, and offers value-added financing products and solutions mainly to small and medium enterprises through sophisticated proposals. Furthermore, the Target Company seeks competitive advantages by concentrating on areas which are less competitive with the existing financial institutions such as real estate non-recourse loans and, as a result, the balance of loans granted to corporations increased. As to the retail business, the Target Company focuses on customers who "want to eradicate worries about" their family budget or "need advice." The Target Company developed a brand strategy as an approachable bank by establishing a "financial lounge" as a place for offering integrated financial advice. Furthermore, the Target Company successfully gained support of customers by developing and offering innovative products such as deposit-linked type "Star-One Housing Loan" and "BANKBEST", a loan for consolidating existing loans. The Target Company has experienced growth of loans for retail customers. On the other hand, because the cost reduction has been achieved, the Target Company has successfully built efficient operation and organization. In the banking market, intense competition is expected to continue due to the development of the reorganization of banking industry and expansion of the range of services offered by non-banks, including new entries from other industries. In order to provide a higher level of service to customers and to maintain competitiveness, the Bidders believe that it is necessary for the Target Company to actively introduce measures that require larger investments such as developing and releasing new financial products and expanding branch network to other regions. On the other hand, the Bidders feel these measures necessary for long-term growth may limit the ability of the Target Company to realize immediate recognizable profit growth. The Bidders believe that it may be difficult to realize growth in corporate value in visible ways for some time after these measures are implemented. Under the present circumstances, in order to support the increase of the corporate value of the Target Company after the TOB, the Bidders are planning to implement various measures utilizing the management know-how, financial knowledge and network of contacts in the financial industry of the Bidders and Advantage Partners, LLP, such as building the business strategy and supporting its execution including strategic actions that require larger investments such as developing and releasing new financial products and expanding branch network to other regions. Since the further growth in corporate value of the Target Company requires a certain period, the Bidders will hold the interests in the Target Company for three years or more and support the growth in corporate value in the case of the successful completion of the TOB. (3) Purpose of the Acquisition of All Shares In order for the Target Company to implement the above-mentioned measures, to realize long-term growth in profitability and to continue the businesses on a perpetual and stable basis, the Bidders believe that it would be essential that a small number of shareholders who will be able to continuously and effectively support the Target Company from a medium- and long term viewpoint will be responsible for the corporate governance, and that the management is able to concentrate on execution of the strategy for a certain period. The Bidders are willing to concentrate the corporate governance, and by jointly executing the TOB and taking the Target Company private in principle, plan to intensely focus on increasing the long-term corporate value of the Target Company. The Bidders will with the support of the Board of Directors of the Target Company, execute the TOB to acquire, in aggregate, 100% of the issued shares of the Target Company in order to enable the Target Company to perform flexible and agile decision-making. After the TOB, the Bidders will appoint additional new directors of the Target Company and cause the persons nominated by them to assume the office of directors of the Target Company. The Bidders will decide based on consultation with the management of the Target Company about the best structure, including the actual appointment of the operating Representative Executive Officer and directors of the Target Company after the TOB. The TOB is not based on the request of the management of the Target Company. However, the key management team of the Target Company, including three Representative Executive Officers and Directors (Mr. Todd Budge, Mr. Robert M. Berardy and Mr. Masaru Irie), have agreed to participate in operating the Target Company's business after the TOB, based on the request of the Bidders. The shares of the Target Company are currently listed on the Tokyo Stock Exchange, Inc. (the "TSE"). However, subject to the number of shares ultimately acquired by the Bidders, the Target Company's shares may be delisted from the TSE in accordance with the procedures as provided in the securities listing regulations of the TSE, as the Bidders intend to acquire 100% of the issued shares of the Target Company through the TOB and subsequent procedures. Even if these regulations do not apply, the Target Company's shares listed on the TSE will be delisted when the Target Company acquires all of its shares. In the case of delisting, the Target Company's shares will not be traded on the TSE and it is anticipated that it will be difficult to sell these shares in the future. The minimum number of shares to be purchased by the Bidders through the TOB is approximately 75% of the issued shares of the Target Company as of the date of this press release. If the total number of shares tendered for the TOB is less than such number, the Bidders will not purchase any shares tendered. (4) Supplemental Information on Corporate Restructuring Anticipated after the TOB In order to realize an increase in the long term growth in profitability of the Target Company and to offer the existing shareholders who support the Target Company to date, an opportunity to sell their shares at fair value in the most efficient manner, the Bidders have decided to execute the TOB. If the Bidders fail to acquire all shares of the Target Company through the TOB, the Bidders will acquire, in total, 100% of the issued shares of the Target Company, while offering an opportunity to sell the shares of the Target Company to shareholders of the Target Company. Specifically, after the successful completion of the TOB, the Bidders intend to acquire, in total, 100% of the issued shares of the Target Company in the following manner: (i) the Target Company will be converted into a corporation with class shares (shurui kabusiki hakkou gaisha) under the Corporate Act (Law No. 86 of 2005, as amended), (ii) all of the common shares of the Target Company shall be appended with a provision stating that the Target Company may acquire all of such shares (the "Wholly Call"), (iii) a different type of common share shall be distributed in exchange for all of such shares, (iv) shareholders who would receive fractional shares will receive cash obtained from the sale of shares corresponding to the aggregate number of such fractional shares in accordance with legally stipulated procedures. The Bidders will request the Target Company to hold a shareholders' meeting to consider the matters mentioned in items (i) through (iii) above. In the case of the successful completion of the TOB, the Bidders will independently approve each proposal at the shareholders' meeting. If each procedure is implemented, the Target Company will acquire all common shares issued by it subject to the Wholly Call, and a different type of common shares will be distributed to the shareholders of the Target Company as consideration for such acquisition. An application for the listing of such different common shares will not be made. The Target Company's shareholders who would receive only fractional shares will receive cash obtained from the sale of shares corresponding to the aggregate number of such fractional shares pursuant to the Corporate Act and the Enforcement Regulations of the Corporate Act (Ministry of Justice Regulation No. 12 of 2006, as amended). In this respect, the amount of cash to be distributed to these shareholders as a result of the sale of shares corresponding to the aggregate number of fractional shares, will be calculated based on the purchase price under the TOB, unless any circumstance otherwise requires. This amount may differ from the purchase price under the TOB due to the fluctuation of value caused by the lapse of time and other causes. The Bidders have requested the Target Company not to make the year-end dividends (the "Year-end Dividends") for which the record date is the end of March 2008 in the case of the successful completion of the TOB. Since the Bidders calculated the purchase price taking into consideration the expected amount of the Year-end Dividends, the economic effects of the shareholders who tender their shares for the TOB may differ from those of the shareholders who do not tender their shares for the TOB. Based on such difference of economic effects, the Bidders have requested the prevention of the occurrence of a difference between the tendering shareholders and non-tendering shareholders. The Target Company made an announcement on February 4, 2008 that it will not make Year-end Dividends in the case of successful completion of the TOB. The number of the Target Company's shares to be delivered as consideration for the acquisition of common shares subject to the Wholly Call has not yet been determined as of the date of this press release. It is expected that the number of the Target Company's shares to be delivered to the Target Company's shareholders who do not tender their shares for the TOB, other than the Bidders, will be determined as a fraction less than one share so that the Bidders can acquire, in total, 100% of the Target Company's issued shares. In connection with the amendment to the articles of incorporation to cause the common shares to be subject to the Wholly-Call, (1) the provisions of Articles 116 and 117 of the Corporate Act provide that shareholders may demand that the company purchase the shares held by such shareholders for the purpose of the protection of rights of minority shareholders, and (2) for the purpose similar to that of (1), if the shareholders' meeting approves that the company will acquire all of the shares subject to the Wholly Call, shareholders may file a petition to the court for a determination of the purchase price of such shares in accordance with Article 172 of the Corporate Act and other provisions of the relevant laws. However, although the demand for the purchase of shares as mentioned in (1) above is considered a right of a "shareholder" for the purpose of provisions of the Corporate Act, the Target Company's shareholders, other than the Bidders, who do not tender their shares for the TOB will receive only fractional shares less than one share of the Target Company, if all of the shares subject to the Wholly Call are acquired by the Target Company. Even if any person who receives only a fractional share less than one share exercises the demand for the purchase of shares and files a petition to the court for the determination of the purchase price pursuant to Article 117 of the Corporate Act, it is not necessarily unknown whether the person holding only fractional shares less than one share at the time of filing is allowed to file such petition for the determination of the purchase price as a "shareholder," because this issue will be ultimately determined by the court. In the case of the acquisition of all the shares subject to the Wholly Call as mentioned in (2) above, we believe that such problem as prescribed in (1) above will not occur, but it would be necessary to satisfy the requirements prescribed by the Corporate Act, including, the filing of a petition to the court within 20 days from the day of the shareholders' meeting. The purchase price or acquisition price per share in the manner described in (1) or (2) may differ from the purchase price under the TOB because the court makes the final decision. In making a demand or filing in accordance with this manner, each shareholder is required to confirm and determine the necessary procedures, etc at his/her own responsibility. With respect to the manner under which (i) the Target Company will be converted into a corporation with class shares under the Corporate Act, (ii) all of the common shares of the Target Company shall be subject to the Wholly Call, and (iii) a different type of common share shall be distributed in exchange for all of such shares, there is some possibility that the Bidders will adopt an alternative manner with similar efforts to the above-mentioned manner due to the relevant authorities' interpretation of the related laws, and the shareholding ratio of the Bidders and of the Target Company's shareholders other than the Bidders, after the TOB. However, in such case, the Bidders will contemplate the adoption of a manner under which the Target Company's shareholders, other than the Bidders, will finally receive the cash. With respect to the Share Purchase Warrants, if the Bidders can not purchase all of the Share Purchase Warrants of the Target Company in spite of the successful completion of the TOB, the Bidders will request the Target Company to take the necessary procedures for the extinguishment of the Share Purchase Warrants and there is some possibility that the Target Company takes the necessary procedures for the extinguishment of the Share Purchase Warrants. The Bidders will not solicit the Target Company's shareholders to vote for the proposal at the shareholders' meeting as mentioned above. The above statement regarding the acquisition of all shares only presents the possibility as required by law, and may not necessarily be implemented. Please consult with their own tax consultants as to the tax treatment under the procedures mentioned above, when necessary for each shareholder. 2. Outline of the TOB (1) Outline of the Target Company
(2) TOB Period
(3) Price of the TOB 360,000 yen per common share / 1 yen per share purchase warrant (4) Calculation Basis of the Price of the TOB (i) Calculation Basis (1) Common stock The Bidders participated in the auction process from early 2007 began by the Largest Shareholders' approach to sell the shares of the Target Company held by the Largest Shareholders. After passing the first bidding process, the Bidders have discussed about the management issue and the prospective potential growth ability of the Target Company. As a result, in the second bidding process from April 2007 and subsequent negotiations because the Bidders, in the competitive position as an auction process, presented the most favorable price relative to the other bidders, entered into the TOB Agreement as of December 21, 2007 with the Largest Shareholders to make an offer to purchase the shares at the price of 360,000 yen per share. The Bidders have decided to execute the TOB to acquire 100% of the Target Company's issued shares and all of the Share Purchase Warrants granted by the Target Company to increase the mid-and long-term corporate value of the Target Company. Advantage Partners, LLP, which provides services directly or indirectly to the Bidders and the investors to them, in calculating the corporate value, consulted the financial situation of the Target Company, including financial data such as 102,322 million yen, the consolidated net asset value of the Target Company (fiscal year ended March 2007), and 23,000 million yen, the profit of current period (the assessment figure of fiscal year ended March 2008 announced by Target Company on September 14, 2007) and through the participation in the auction process, the subsequent verification of the documents provided by the Target Company to negotiate with the Largest Shareholders and meetings and discussions with the management of the Target Company created and examined thoroughly a future business plan for the Target Company post transfer of ownership to the Bidders through the TOB, and ultimately determined an appropriate purchase price for the TOB of 360,000 yen per common share. The Bidders did not obtain a calculation paper by third parties in calculating the purchase price for the TOB. The Target Company's historical one-month and three-month average closing prices during the one-month and three-month trading periods on the TSE prior to one business day before December 21, 2007 when the Bidders announced the TOB are 324,810 yen and 331,661 yen and approximately 10.8% and 8.5% and higher than the average closing prices, respectively. In addition, it should be noted that the share prices of the Target Company has risen dramatically since December 14, 2007 due to the publicity surrounding a potential transfer of the Target Company's shares held by the Largest Shareholders. The Target Company's historical one-month and three-month average closing prices during the one-month and three-month trading periods on the TSE prior to December 13, 2007 announced are 314,762 yen and 330,033 yen and approximately 14.4% and 9.1% and higher than the average closing prices, respectively. (2) Share Purchase Warrants With respect to Share Purchase Warrants of the Target Company, as of the date of this press release, the exercise price per common share of the Share Purchase Warrants of the Target Company exceeds 360,000 yen, the purchase price per common share of TOB. The Share Purchase Warrants of the Target Company have been issued to the officers and employees of the Target Company and to the director of the subsidiary of the Target Company, and under the allotment agreement entered into by and between the Target Company, the holders of the Share Purchase Warrants may not transfer, pledge or make any other disposition of all or part of the Share Purchase Warrants to a third party. Therefore, because it is interpreted that the Bidders may not exercise the Share Purchase Warrants even if the Bidders purchase these Share Purchase Warrants through the TOB, the Bidders have determined that the offered purchase price of the Share Purchase Warrants will be 1 yen as indicated above. (Note) The financial data of the fiscal year ended March 2007 is based on the Securities Report for the 6th period filed by the Target Company on June 26, 2007 and the financial data of the fiscal year ended March 2008 is based on the assessment figure of the fiscal year ended March 2008 announced by the Target Company on September 14, 2007. (ii) Calculation Background (1) Common stock The Bidders participated in the auction process from early 2007 began by the Largest Shareholders' approach to sell the shares of the Target Company held by the Largest Shareholders. After passing the first bidding process, the Bidders have discussed about the management issue and the prospective potential growth ability of the Target Company. As a result, in the second bidding process from April 2007 and subsequent negotiations because the Bidders, in the competitive position as an auction process, presented the most favorable price relative to the other bidders, entered into the TOB Agreement as of December 21, 2007 with the Largest Shareholders to make an offer to purchase the shares at the price of 360,000 yen per share. The Bidders have decided to execute the TOB to acquire 100% of the Target Company's issued shares and all of the Share Purchase Warrants granted by the Target Company to increase the mid-and long-term corporate value of the Target Company. Advantage Partners, LLP, which provides services directly or indirectly to the Bidders and the investors to them, in calculating the corporate value, consulted the financial situation of the Target Company, including financial data such as 102,322 million yen, the consolidated net asset value of the Target Company (fiscal year ended March 2007), and 23,000 million yen, the profit of current period (the assessment figure of the fiscal year ended March 2008 announced by the Target Company on September 14, 2007) and through the participation in the auction process, the subsequent verification of the documents provided by the Target Company to negotiate with the Largest Shareholders and meetings and discussions with the management of the Target Company created and examined thoroughly a future business plan for the Target Company post transfer of ownership to the Bidders through the TOB, and ultimately determined an appropriate purchase price for the TOB of 360,000 yen per common share. The Bidders did not obtain a calculation paper by third parties in calculating the purchase price for the TOB. On the other hand, the Target Company resolved to support the TOB at the meeting of the Board of Directors held on February 4, 2008. (2) Share Purchase Warrants With respect to Share Purchase Warrants of the Target Company, as of the date of this press release, the exercise price per common share of the Share Purchase Warrants of the Target Company exceeds 360,000 yen, the purchase price per common share of the TOB. The Share Purchase Warrants of the Target Company have been issued to the officers and employees of the Target Company and to the director of the subsidiary of the Target Company, and under the allotment agreement entered into by and between the Target Company, the holders of the Share Purchase Warrants may not transfer, pledge or make any other disposition of all or part of the Share Purchase Warrants to a third party. Therefore, because it is interpreted that the Bidders may not exercise the Share Purchase Warrants even if the Bidders purchase these Share Purchase Warrants through the TOB, the Bidders have determined that the offered purchase price of the Share Purchase Warrants will be 1 yen as indicated above. (Note) The financial data of the fiscal year ended March 2007 is based on the Securities Report for the 6th period filed by the Target Company on June 26, 2007 and the financial data of the fiscal year ended March 2008 is based on the assessment figure of the fiscal year ended March 2008 announced by the Target Company on September 14, 2007. (5) Number of Shares, etc. Subject to the TOB
(6) Change of the ratio of ownership of share certificates, etc. by the TOB
(7) Expense for the TOB 188,999,640,000 yen (8) Settlement Procedure (i) Name and Location of Head Office of Financial Instruments Dealer, Bank, etc. to Settle the TOB
(ii) Commencement Date of Settlement March 14, 2008 (Note) March 27, 2008 if the TOB Period is extended pursuant to the provisions of paragraph 3 of Article 27-10 of the Law. (iii) Settlement Procedure A written notice regarding purchase, etc. will be mailed to the address or location of each Tendering Shareholders, etc. (or the address of the standing proxy in the case of a Non-Japanese Shareholders, etc.) without delay after the expiration of the TOB Period. Purchases shall be settled in cash. The tender offer agent or the sub-agent will remit to the place designated by each Tendering Shareholders, etc. (or by the standing proxy in the case of Non-Japanese Shareholders, etc.) or pay at the head office or a domestic branch of the tender offer agent or the sub-agent which accepted the tender, the sales price with regard to the shares purchased in accordance with the instructions given by the Tendering Shareholders, etc. without delay on or after the commencement date of settlement. (9) Other Conditions and Procedures Relating to the TOB (i) Existence (or Non-existence) and Details of Conditions Listed in the Items of Paragraph 4 of Article 27-13 of the Law If the total number of Tendered Shares is less than the Number of Shares, etc. Planned to be Purchased (524,999 shares), none of the Tendered Shares will be purchased. If the total number of Tendered Shares equals or exceeds the Number of Shares, etc. Planned to be Purchased (524,999 shares), all the Tendered Shares will be purchased. (ii) Existence (or Non-existence) of Conditions for Withdrawal of the Tender Offer, Details thereof, and Manner of Disclosure of Withdrawal. Upon the occurrence of any event listed in Article 14, Paragraph 1, Items 1(i) through (ri) and (wo) through (so), Item 2, Items 3(i) through (chi), Item 5, and Article 14, Paragraph 2, Items 3 through 6 of the Cabinet Order of the Financial Instruments and Exchange Law (Enforcement Order No. 321 of 1965, as amended, the "Enforcement Order"), the Bidders may make a withdrawal of the Tender Offer. When making a withdrawal of the TOB, the Bidders will give electronic public notice and announce in The Nihon Keizai Shimbun newspaper that such public notice have been given; provided, however, that if it is deemed difficult to give such public notice by the last day of the TOB Period, a public announcement pursuant to Article 20 of the Cabinet Office Ordinance Concerning Disclosure of the Tender Offer of Shares, Etc., by Non-Issuer (Ordinance of Minister of Finance No. 38 of 1990, as amended, the "Cabinet Office Ordinance") shall be made, and public notice shall be given promptly thereafter. (iii) Existence (or Non-existence) of Conditions for Reducing TOB Price, Details thereof, and Manner of Disclosure of Reduction If the Target Company engages in a stock split or any act stipulated in Article 13, Paragraph 1 of the Enforcement Order during the TOB Period, the Bidders may, pursuant to Article 27-6, Paragraph 1, Item 1 of the Law, reduce the TOB Price as set forth in Article 19, Paragraph 1 of the Cabinet Office Ordinance. When reducing the TOB Price, the Bidders will give electronic public notice and announce in The Nihon Keizai Shimbun newspaper that such public notice have been given; provided, however, if it is deemed difficult to give such public notice by the last day of the TOB Period, a public announcement pursuant to Article 20 of the Cabinet Office Ordinance shall be made, and public notice shall be given promptly thereafter. If the TOB Price is so reduced, all Tendered Shares on and prior to the date of such public announcement shall also be purchased at the reduced prices. (iv) Matters regarding Right of Tendering Shareholders, etc. to Cancel Agreement Tendering Shareholders, etc. may cancel any agreement concerning the TOB at any time during the TOB Period. Tendering Shareholders, etc. are required to deliver or send the Cancellation Notice (a receipt slip issued for deposited shares and a written notice for cancellation of the relevant agreement concerning the TOB) to the head office or a domestic branch of the tender offer agent which accepted the tender (or the sub-agent if the sub-agent accepted the tender) by 16:00 of the last day of the TOB Period. However, any Cancellation Notice sent must be received by the tender offer agent or the sub-agent above by 16:00 of the last day of the TOB Period. The Bidders will not seek monetary damages or civil penalties against Tendering Shareholders, etc. who cancel agreements relating to the TOB. The Bidders will be responsible for all expenses incurred in returning the Tendered Shares. Tendered Shares shall be returned promptly after completion of the procedures in the event of application for cancellation. (v) Manner of Disclosure in case of Modification of Conditions, etc. of the TOB The Bidders may modify the conditions, etc. of the TOB except as prohibited in Article 27-6, Paragraph 1 of the Law. When modifying the conditions, etc. of the TOB, the Bidders will give public notice electronically and announce in The Nihon Keizai Shimbun newspaper that such public notice have been given; provided, however, that if it is deemed difficult to give such public notice by the last day of the TOB Period, a public announcement pursuant to Article 20 of the Cabinet Office Ordinance shall be made, and public notice shall be given promptly thereafter. All Tendered Shares tendered both on and prior to the date of such public notice shall be purchased in accordance with the modified conditions, etc. of the TOB. (vi) Manner of Disclosure upon Filing of Amendment to Registration Statement If the Bidders file any Amendment to this Registration Statement with the Director General of the Kanto Local Finance Bureau, the Bidders shall promptly make public announcement regarding such amendment to the extent that it relates to any information contained in the Public Notice of the Commencement of the TOB pursuant to Article 20 of the Cabinet Office Ordinance. The Bidders shall immediately amend the Tender Offer Explanatory Statement and provide the amended Tender Offer Explanatory Statement to the Tendering Shareholders, etc. who have received the original Tender Offer Explanatory Statement. However, if only limited amendments are made, instead of providing an amended Tender Offer Explanatory Statement, the Bidders shall prepare and provide the documents stating the reasons for such amendments, the items that have been amended, and the amended information. (vii) Manner of Disclosure of Results of the TOB The results of the TOB will be publicly announced pursuant to Article 9-4 of the Enforcement Order and Article 30-2 of the Cabinet Office Ordinance on the date immediately following the last day of the TOB Period. (10) Date of Public Notice of the Commencement of the TOB February 5, 2008 (11) Tender Offer Agent
3. Others (1) Existence and Details of Agreements between the Bidders and the Target Company or its Directors or Officers The Target resolved to support the TOB and not making the Year-end Dividends in the case of successful completion of the TOB at the meeting of the Board of Directors held on February 4, 2008. After the TOB, the Bidders will appoint additional new directors of the Target Company and cause the persons nominated by them to assume the office of directors of the Target Company. The Bidders will decide based on consultation with the management of the Target Company about the best structure, including the actual appointment of the operating Representative Executive Officer and directors of the Target Company after the TOB. The TOB is not based on the request of the management of the Target Company. However, the key management team of the Target Company, including three Representative Executive Officers and Directors (Mr. Todd Budge, Mr. Robert M. Berardy and Mr. Masaru Irie),have agreed to participate in operating the Target Company's business after the TOB, based on the request of the Bidders. (2) Other Information considered necessary for Investors to decide the Merits of the Tender of their Shares for the TOB The shares of the Target Company are currently listed on the TSE. However, subject to the number of shares ultimately acquired by the Bidders, the Target Company's shares may be delisted from the TSE in accordance with the procedures as provided in the securities listing regulations of the TSE, as the Bidders intend to acquire 100% of the issued shares of the Target Company through the TOB and subsequent procedures. Even if these regulations do not apply, the Target Company's shares listed on the TSE will be delisted when the Target Company acquires all of its shares. In the case of delisting, the Target Company's shares will not be traded on the TSE and it is anticipated that it will be difficult to sell these shares in the future. The Target Company made an announcement on February 4, 2008 that it will not make Year-end Dividends in the case of successful completion of the TOB.
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