(Note) This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

September 13, 2018
Company Name: Tokuyama Corporation
Representative Name: Hiroshi Yokota,
Representative Director, President and Executive Officer(Code No. 4043, First Section TSE)
Contact: Taro Kobayashi, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-5207-2552

Notice Concerning the Procurement of Funds through a New Subordinated Loan

and the Early Repayment of an Existing Subordinated Loan
(Update of the Previous Announcement)
As announced in “Notice Concerning the Procurement of Funds through a New Subordinated Loan and theEarly Repayment of an Existing Subordinated Loan,” dated on August 29, 2018, Tokuyama Corporation(hereinafter “the Company,” “Tokuyama” or “we”) has decided to procure funds totaling ¥60 billion bydrawing down a new subordinated loan (hereinafter the “New Subordinated Loan”) and to prepay an existing
subordinated loan (hereinafter the “Existing Subordinated Loan”) concluded on March 20, 2014. The
Company today announces details of its final decision regarding the terms and conditions of the New
Subordinated Loan. Brief details are presented as follows.
1. Objective and Significance of the New Subordinated Loan
Tokuyama has decided to procure funds by drawing down the New Subordinated Loan in order to prepay anExisting Subordinated Loan. (Please refer to the press release, “Notice Concerning the Procurement ofFunds through a New Subordinated Loan and the Early Repayment of an Existing Subordinated Loan,”issued on August 29, 2018 for details). With the understanding that ratings agencies will recognize the New
Subordinated Loan as having the same equity credit attributes as the Existing Subordinated Loan, this is
expected to help maintain the Company’s continued financial soundness.

12. Overview of the New Subordinated Loan
Total amount of the funds¥60 billion

to be procured (planned):
Date of agreement

September 13, 2018

execution:
Drawdown date:

September 20, 2018

Application of funds:

Early repayment of the Existing Subordinated Loan

Final repayment date:

September 20, 2078
However, Tokuyama may make an early repayment of all or aportion of the principal of the New Subordinated Loan on anyinterest payment date on a date five years or later after thedrawdown of the New Subordinated Loan.

Replacement clause:

In the case of an early repayment of the New Subordinated Loan,
Tokuyama intends to procure funds, within a six-month period
before the date on which it will make that early repayment, thathave been approved by ratings agencies as having equity credit
attributes equal to or greater than the New Subordinated Loan.
However, the Company may make an early repayment of the New
Subordinated Loan five years or later after the drawdown of theNew Subordinated Loan except in those cases that satisfy any of thefollowing:(1) The amount of shareholders’ equity in the Company’s mostrecent consolidated balance sheet at the time the announcement
to make an early repayment is made stands at ¥179.2 billion or
more, and(2) The Company’s D/E ratio based on its most recent
consolidated balance sheet at the time the announcement tomake an early repayment is made comes in at 0.9 times or less

Applicable interest rate:

A floating rate of interest based on three-month JPY TIBOR from
September 20, 2018 to September 20, 2023; stepped up floating rate
(1% higher) from September 20, 2023.

Mandatory suspension ofThe interest payable on the relevant interest payment date shall beinterest:

deferred in full when (a) the EBITDA margin is less than 8% for
the most recent two consecutive fiscal years with respect to theCompany’s annual consolidated financial statements, or (b) when
the ratio of net liabilities to total capital exceeds 70% with respect tothe Company’s annual or interim period consolidated financial2statements.
In addition to the aforementioned, interest payable shall be deferred
either in part or in full when the distributable amount is less than
the required amount.
Optional suspension of

Tokuyama may, at its discretion, suspend payment of all or ainterest:

portion of the interest.

Subordination:

In the event liquidation proceedings are commenced, the decision
to commence bankruptcy proceedings is made, or the decision tocommence corporate reorganization, civil rehabilitation, or any
other proceedings is made against the Company, the provider of theNew Subordinated Loan may request repayment under theagreement after the repayment of all liabilities in full excluding
other liabilities of a similar nature including preferred stock and theNew Subordinated Loan.
Any change to the terms and conditions of the New Subordinated
Loan that disadvantage any creditors of the aforementioned
liabilities shall not be recognized.

Equity credit attributes ofClass 4 / 70% (Ratings and Investment Information, Inc.)

the New Subordinated LoanHigh / 75% (Japan Credit Rating Agency, Ltd.)evaluated by ratings
agencies:
Investors (lenders)

MUFG Bank, Ltd.

participating in the New

Mizuho Bank, Ltd.

Subordinated Loan:

The Yamaguchi Bank, Ltd.
Three other banks

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