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If any discrepancy arises

between this translation and the Japanese original, the Japanese original shall prevail

Notice regarding Partial Redemption Amount of the
1st Series Unsecured Bonds on February 18, 2013
To Bondholders:January 31, 2013
Covalent Materials Corporation
Covalent Materials Corporation (the “Company”) hereby announces that it has
confirmed the partial redemption amount of the 1st Series Unsecured Bonds (withinter-bond pari passu clause) (ISIN Code: JP330135A829) (the “Bonds”) to be made onFebruary 18, 2013 in accordance with the formula described in “8. Methods and Date ofRedemption” of the Terms and Conditions of the Bonds, as noted below. Based on thecalculations noted below, the Company will not redeem part of the principal amount of
the Bonds on February 18, 2013, and will only make an interest payment on such date.
1. Formula to calculate the partial redemption amount of the Bonds
The formula to calculate the partial redemption amount of the Bonds is provided for
as follows:
The Company shall redeem part of the principal amount of the Bonds on February
18, 2013, in the aggregate amount to the nearest but not exceeding the amountwhichever is higher obtained by either of (i) deducting (x) the aggregate amount
paid or to be paid for the Bonds agreed to be purchased by the Company during theperiod from October 15, 2012 to December 31, 2012 in accordance with the purchaseoffer for all holders of the Bonds at the purchase price of JPY 76 per face value of
JPY 100 of each Bond with the maximum purchase amount of JPY 28,000,000,000
in the face value from (y) JPY 21,300,000,000, or (ii) deducting (x) JPY
3,000,000,000 and the aggregate purchase price of the Bonds through the purchaseoffer as set forth above (excluding the amount already paid) from (y) the aggregate
amount of the cash and deposit and liquidity securities as shown on the consolidatedbalance sheet of the Company as of December 31, 2012, at JPY 100 per face value of
JPY 100 of each Bond. The redemption amount per each Bond shall be themaximum JPY 1,000,000 or an integral multiple thereof as calculated by the above
formula.
2. Calculation of the partial redemption amount of the Bonds based on the formulaabove
The partial redemption amount of the Bonds has been calculated as follows, basedon the formula noted in 1. above.
(A) Since the total purchase amount of the Bonds agreed to be purchased pursuant
to the purchase offer was equivalent to the maximum purchase amount of JPY
28,000,000,000 (total purchase price of JPY 21,280,000,000), the amountcalculated in accordance with 1.(i) above is JPY 20,000,000.
(B) (i)Consolidated cash and deposit and liquidity securities(as of December 31, 2012):(ii)

JPY 6,882,349 thousand

Remaining purchase price of the Bonds (JPY 17,360,000 thousand alreadypaid):
JPY 3,920,000 thousand
Deducting (ii), as well as JPY 3,000,000 thousand, from (i) above, equivalent tothe amount calculated in accordance with 1.(ii) above, is JPY -37,651 thousand
Based on the calculations above, the maximum aggregate partial redemption amountis JPY 20,000,000, and the partial redemption amount per Bond is less than theminimum partial redemption amount of JPY 1,000,000 per Bond.

Hence, thepartial redemption amount will be JPY 0, and no partial redemption of the Bonds
will be made on February 18, 2013.