This English translation is provided for the information purpose only. If any discrepancy arises
between this translation and the Japanese original, the Japanese original shall prevail.

December 26, 2014
To Bondholders:
6-3, Osaki 1-chome, Shinagawa-ku, Tokyo
Covalent Materials Corporation
Toshio Nagahama, Representative Director and President

Notice regarding an Early Redemption of Entire Amount and Occurrence ofRedemption Option Event of the 1st Series of Unsecured Bonds (with Inter-Bond
Pari Passu Clause)
Covalent Materials Corporation (the “Company”) hereby announces that, as of today, it
determined to make early redemption on February 18, 2015 of the entire amount of its 1st Seriesof Unsecured Bonds (with inter-bond pari passu clause) , which were issued by the Company asof February 18, 2008 (ISIN code: JP330135A829) (the “Bonds”), in accordance with Condition
8, Items (3) and (5) of the terms and conditions of the Bonds (which refers to the amended termsand conditions of the Bonds that (i) was approved by resolution at the bondholders’ meeting
held on October 5, 2012 and (ii) was approved by the Tokyo District Court as of October 12,2012; the same shall apply hereinafter) as follows, and that, as of today, the event triggering theoption of the bondholders to request for redemption of the Bonds (the “Redemption Option”) set
forth in Condition 8, Item (4) of the terms and conditions of the Bonds has occurred. If abondholder does not exercise the Redemption Option, the entire amount to be redeemed to suchbondholder will be early redeemed on February 18, 2015 with the interests accrued up to andincluding such early redemption date. However, if a bondholder exercises the RedemptionOption and receive the redemption amount prior to February 18, 2015, as the amount of interest
payable to such bondholder shall be the interest accrued up to and including the date of such
redemption, such amount falls below the amount such bondholder would receive as a result of
the early redemption of the entire amount on February 18, 2015.
I.

Early Redemption of Entire Amount1.

Name of Bonds to be Early Redeemed
Covalent Materials Corporation 1st Series of Unsecured Bonds (with inter-bond pari passuclause)

2.

Date of Early Redemption

February 18, 2015
The Bonds shall bear no interest after the date of early redemption.
3.

Early Redemption Price
105 yen per face value of 100 yen per each Bond

4.

Redemption Amount per each Bond
97,650,000 yen (the principal amount of each Bond was initially 100,000,000 yen, and apart of which was redeemed as of August 18, 2014; the balance of the principal of each
Bond after such redemption is 93,000,000 yen, and the redemption amount will becalculated on the basis of 105 yen per face value of 100 yen of such outstanding principalamount), plus interest to be accrued up to and including the date of early redemption (halfyear’s interest accrued on the above-mentioned principal amount of 93,000,000 yen at therate of 4.25% per annum).
On or after the date of early redemption, the redemption amount will be paid to eachbondholder in accordance with the Act on Book-Entry Transfer of Company Bonds, Shares,etc., the regulations of the Japan Securities Depository Center, Inc. and other rules andregulations.

II. Occurrence of Redemption Option Event
1. Name of Bonds subject to Redemption Option
Covalent Materials Corporation 1st Series of Unsecured Bonds (with inter-bond pari passuclause)
2. Date on Which Redemption Option Event Occurred
December 26, 2014
3. Reason for Occurrence of Redemption Option Event
Carlyle Japan Partners II, L.P., Carlyle Japan International Partners II, L.P., CJP
Co-Investment II A, L.P., CJP Co-Investment II B, L.P., Unison Capital Partners II(F), L.P.,
Unison Capital Partners II, L.P., UC Mask Investors 2(F), L.P., UC Mask Investors, L.P. and
UC Mask Investors (F), L.P., who are the shareholders of the Company (collectively, the“Controlling Shareholders”) have transferred all shares of the Company held by theControlling Shareholders (95.2% of the total number of voting rights) to CoorsTek, Inc.
-2-(HQ: Golden, Colorado, USA; “CoorsTek”), and as a result, as of today, December 26, 2014,
the number of voting rights held by the Controlling Shareholders has fallen below
two-thirds of the total number of voting rights of the Company based on the Company’s
shareholders’ register, which has triggered the “Change of Control Event” set forth inCondition 8, Item (4)(a) of the terms and conditions of the Bonds.

Upon the occurrence ofsuch Event, the Redemption Option has arisen.
4. Redemption Price
105 yen per face value of 100 yen of each Bond
5. Redemption Value per each Bond
97,650,000 yen (calculated on the basis of 105 yen per face value of 100 yen with respect tothe outstanding principal amount of 93,000,000 yen for each Bond) plus interests to beaccrued up to and including the redemption date. As the amount of accrued interests shallbe the interests accrued up to and including the date of redemption as described above, suchinterest amount falls below the interest amount to be paid as a result of the redemption
referred to in I. above.

The Bonds shall bear no interest after the redemption date.

6. Exercise of Redemption Option
In order to exercise the Redemption Option, due to constraints under the book-entry transfer
system for bonds and any other factors, the Company offers an option to sell the Bonds at
an amount equal to an aggregate of the redemption amount plus accrued interests through aspecific domestic securities company designated by the Company (the “DesignatedSecurities Company”) (See “III. Purchase of Bonds by Company” below.).

Anybondholder who takes this option is required to hold an account at the Designated Securities
Company; therefore, if such bondholder does not hold such account, he/she is required totake procedures of opening such account separately. Since opening an account takes time,
the procedures of opening the account may not be completed by the expiry of the period forwhich request for redemption may be made as set forth in (1) below, depending on theprogress of the procedures. Please be advised in advance that in such case, the relevant
Bonds shall be redeemed pursuant to the early redemption of the entire amount on February
18, 2015 (the “Early Redemption”).
(1)

Period for Which Request for Redemption May be Made
From December 26, 2014 to January 19, 2015
Since the Company plans to conduct the Early Redemption as of February 18, 2015, as-3-

described in I. above, if the notice required for making request for redemption reaches
the Company on or after January 20, 2015, the Company will redeem such Bonds
through the Early Redemption, not as the redemption pursuant to the request forredemption, because the date of Early Redemption pursuant to I. above will arrive
before the redemption date upon exercise of redemption option by bondholders
pursuant to the terms and conditions of the Bonds.
(2)

Redemption Date
The Company shall redeem the relevant Bonds on a day designated by the Company
within 30 days after the request for redemption in an appropriate form has reached theCompany.

The Company will separately notify the redemption date to eachbondholder who has made the request for redemption.
(3)

Method of Exercise of Redemption Rights
Please contact the following corporate contacts if any bondholder wishes to make arequest for redemption.

Explanation on the necessary documents, etc. for theprocedures and the detailed method of exercise of the Redemption Option will bemade at the following corporate contacts.
[Corporate Contacts with respect to the Early Redemption and the Redemption Option]
Covalent Materials Corporation
Accounting & Finance, Finance Group
Tel: +81-3-5437-8405 Fax: +81-3-5437-7254
President’s Office, Legal Group
Tel: +81-3-5437-6240 Fax: +81-3-5437-7254
E-mail: IR-contact@covalent.co.jp
III. Purchase of Bonds by CompanyDue to constraints under the book-entry transfer system for bonds and any other factors, asdescribed in II. 6. above, in order to simplify the procedures, the Bonds may be purchasedby the Company (that is, sale of the Bonds by the bondholders), in place of being redeemed
upon the exercise of the Redemption Option. Any bondholder who wishes to apply for thepurchase by the Company is kindly requested to take the procedures for the sale after
confirming the following.

-4-1. Method of Application for Purchase
As the bondholders are required to sell their Bonds to Mizuho Securities Co., Ltd. (“MizuhoSecurities”) (Please note that Mizuho Securities might continue to hold such Bonds until thedate of Early Redemption), a relevant bondholder is required to (i) open a transaction
account with Mizuho Securities (a relevant bondholder who already has a transaction
account is not required to open a new account) and (ii) make an account transfer of therelevant Bonds to an account opened at Mizuho Securities (such is not necessary if therelevant Bonds are held in an account at Mizuho Securities) under the book-entry transfer
system during the application period set forth in 2. below. Explanation on the opening of atransaction account and the detailed method of selling the Bonds will be made by Mizuho
Securities’ contact person set forth below.
2. Application Period
From December 26, 2014 to January 19, 2015
Since the Company plans to conduct the Early Redemption as of February 18, 2015, as
described in I. above, the Bonds for which an application for purchase is made on or afterJanuary 20, 2015 will be redeemed through Early Redemption.

Please note that thebondholders who apply for the purchase on or after January 20, 2015 may sell such Bonds
to a third party freely until the date of Early Redemption.
3. Date of Purchase
The purchase will be conducted within the month of January 2015, depending on the statusof the procedures of the application for purchase.
[Contact person with respect to the Purchase of Bonds]
Mizuho Securities Co., Ltd.
Debt Capital Markets Dept. II
Tomohiro Nakano
Tel: +81-3-5546-4987
E-mail: tomohiro.nakano@mizuho-sc.com-5-