Companies Act

If a stock company receives a request under Article 138, item (i), (c) or item (ii), (c), if it makes a determination to not give approval under Article 136 or Article 137, paragraph (1), it must purchase the shares with restriction on transfer relating to relevant requests for approval of transfer (hereinafter in this Subsection referred to as "subject shares"). In these cases, the following matters must be prescribed:

a statement to the effect that the stock company will purchase the subject shares;

the number of the subject shares that will be purchased by the stock company (or, for a company with class shares, the classes of the subject shares and the number of shares for each class).

The determination of the matters set forth in the items of the preceding paragraph must be made by a resolution at a shareholders meeting.

Requesters for approval of transfer may not exercise voting right at the shareholders meeting referred to in the preceding paragraph; provided, however, that this does not apply if all shareholders other than relevant requesters for approval of transfer may not exercise voting right at the shareholders meeting referred to in that paragraph.

Notwithstanding the provisions of paragraph (1), in the cases provided for in that paragraph, a stock company may designate a person to purchase some or all of the subject shares (hereinafter in this subsection referred to as "designated purchaser").

The designation pursuant to the provisions of the preceding paragraph must be made by a resolution at the shareholders meeting (or at a board of directors meeting for a company with board of directors); provided, however, that this does not apply if it is otherwise provided for in the articles of incorporation.

If a stock company has determined the matters set forth in any item of paragraph (1) of the preceding Article, it must notify the requester for approval of transfer of these matters.

If a stock company intends to give notice pursuant to the provisions of the preceding paragraph, it must deposit the amount obtained by multiplying the amount of the net assets per share (meaning the amount prescribed by Ministry of Justice Order as the amount of net assets per share; the same applies hereinafter) by the number of the subject shares under paragraph (1), item (ii) of the preceding Article, with a depository located in the area where its head office is located, and deliver a document certifying relevant deposit to the requester for approval of transfer.

If the subject shares are the shares of a share certificate-issuing company, the requester for approval of transfer who received delivery of the document referred to in the preceding paragraph must deposit the share certificates representing the subject shares referred to in paragraph (1), item (ii) of the preceding Article with a depository located in the area where the head office of relevant share certificate-issuing company is located within one week from the day of receipt of relevant delivery. In these cases, the requester for approval of transfer must give notice of relevant deposit to relevant share certificate-issuing company without delay.

If the requester for approval of a transfer under the preceding paragraph does not effect the deposit pursuant to the provisions of that paragraph within the period under that paragraph, the share certificate-issuing company may cancel the contract for the sale and purchase of the subject shares provided for in paragraph (1), item (ii) of the preceding Article.

If a designated purchaser is designated pursuant to the provisions of Article 140, paragraph (4), the designated purchaser must notify the requester for approval of transfer of the following matters:

a statement to the effect that the designated purchaser has been designated as a designated purchaser; and

the number of the subject shares that the designated purchaser will purchase (or, for a company with class shares, the classes of the subject shares and the number of shares for each class).

If a designated purchaser intends to give notice pursuant to the provisions of the preceding paragraph, the designated purchaser must deposit the amount obtained by multiplying the amount of the net assets per share by the number of the subject shares under item (ii) of that paragraph with a depository located in the area where the head office of the stock company is located, and deliver a document certifying relevant deposit to the requester for approval of transfer.

If the subject shares are the shares of a share certificate-issuing company, the requester for approval of transfers who received delivery of the document referred to in the preceding paragraph must deposit the share certificates representing the subject shares referred to in paragraph (1), item (ii) with a depository located in the area where the head office of relevant share certificate-issuing company is located within one week from the day of receipt of relevant delivery. In these cases, relevant requester for approval of transfer must give notice of relevant deposit to the designated purchaser without delay.

If the requester for approval of a transfer under the preceding paragraph does not effect the deposit pursuant to the provisions of that paragraph within the period under that paragraph, the designated purchaser may cancel the contract for the sale and purchase of the subject shares provided for in paragraph (1), item (ii).

A requester for approval of transfer who made a request under Article 138, item (i), (c) or item (ii), (c) may, after having received notice pursuant to the provisions of Article 141, paragraph (1), withdraw the request only if the requester for approval of transfer obtains the approval of the stock company.

A requester of approval of transfer who made a request under Article 138, item (i), (c) or item (ii), (c) may, after having received notice pursuant to the provisions of paragraph (1) of the preceding Article, withdraw the request only if the requester for approval of transfer obtains the approval of the designated purchaser.

If notice is given pursuant to the provisions of Article 141, paragraph (1), the sale price of the subject shares under Article 140, paragraph (1), item (ii) is prescribed through discussion between the stock company and the requester for approval of transfer.

The stock company or requester for approval of transfers may file a petition for the court to determine the sale price within twenty days from the day when notice is given pursuant to the provisions of Article 141, paragraph (1).

In order to make the determination under the preceding paragraph, the court must consider the financial conditions of the stock company at the time of the requests for approval of transfer and all other circumstances.

Notwithstanding the provisions of paragraph (1), if a petition under paragraph (2) is made within the period provided for in that paragraph, the amount determined by the court in response to relevant petition is to be the sale price of the subject shares under Article 140, paragraph (1), item (ii).

Notwithstanding the provisions of paragraph (1), if no petition under paragraph (2) is made within the period provided for in that paragraph (except if the discussions under paragraph (1) are successfully concluded within the period), the amount obtained by multiplying the amount of the net assets per share by the number of the subject shares under Article 140, paragraph (1), item (ii) is to be the sale price of the subject shares.

If a deposit is effected pursuant to the provisions of Article 141, paragraph (2), and the sale price of the subject shares under Article 140, paragraph (1), item (ii) has been finalized, the stock company is deemed to have paid the sale price, in whole or in part, up to an amount equivalent to the value of the money so deposited.

The provisions of the preceding paragraphs apply mutatis mutandis if notice is given pursuant to the provisions of Article 142, paragraph (1). phrase In these cases, in paragraph (1), the phrase "Article 140, paragraph (1), item (ii)" is deemed to be replaced with "Article 142, paragraph (1), item (ii)" and the term "stock company" is deemed to be replaced with "designated purchaser"; in paragraph (2), the term "stock company" is deemed to be replaced with "designated purchaser"; in paragraph (4) and paragraph (5), the phrase "Article 140, paragraph (1), item (ii)" is deemed to be replaced with "Article 142, paragraph (1), item (ii)"; and in the preceding paragraph, the phrase "Article 141, paragraph (2)" is deemed to be replaced with "Article 142, paragraph (2)", the phrase "Article 140, paragraph (1), item (ii)" is deemed to be replaced with "paragraph (1), item (ii) of that Article", and the term "stock company" is deemed to be replaced with "designated purchaser".

In the cases set forth below, the stock company is deemed to have given the approval under Article 136 or Article 137, paragraph (1); provided, however, that this does not apply if otherwise provided for by the agreement between the stock company and the requester for approval of transfer:

if the stock company has failed to give notice pursuant to the provisions of Article 139, paragraph (2) within two weeks (or if any shorter period of time is provided for in the articles of incorporation, relevant shorter period of time) from the day of the request pursuant to the provisions of Article 136 or Article 137, paragraph (1);

if the stock company has failed to give notice pursuant to the provisions of Article 141, paragraph (1) within forty days (or if any shorter period of time is provided for in the articles of incorporation, relevant shorter period of time) from the day of the notice pursuant to the provisions of Article 139, paragraph (2) (except the cases where the designated purchaser gives notice pursuant to the provisions of Article 142, paragraph (1) within ten days (or if any shorter period of time is provided in the articles of incorporation, that shorter period of time) from the day of the notice pursuant to the provisions of Article 139, paragraph (2));

beyond the cases set forth in the preceding two items, the cases prescribed by Ministry of Justice Order.

Shareholders may pledge the shares which they hold.

Pledging shares in a share certificate-issuing company does not become effective unless the share certificates representing those shares are delivered.

Pledging shares may not be perfected against the stock company and other third parties unless the names and addresses of the pledgees are stated or recorded in the shareholder register.

Notwithstanding the provisions of the preceding paragraph, a pledgee of shares in a share certificate-issuing company may not assert the pledge against the stock company and other third parties unless the pledgee is in continuous possession of the share certificates representing those shares.

The provisions of Article 364 of the Civil Code do not apply to shares.