[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
March 11, 2022
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term
Building Lease and Property Management Agreement pertaining to the rent conditions forthe period from January to June, 2022 with Major Tenant
Invincible Investment Corporation (“INV”) announced the decision to enter into a Memorandum ofUnderstanding (the “MOU”) to amend each fixed-term building lease and property management agreement("MLPM Agreements") pertaining to the rent conditions for the period from January 1, 2022 to June 30, 2022
for domestic hotels owned by INV with INV's main tenant, MyStays Hotel Management Co., Ltd. (“MHM”) and
its affiliates (the "MHM Group"), who operate the hotels, as decided today by Consonant Investment
Management Co., Ltd. (“CIM”), the asset manager of INV.
The MHM Group has received investments through funds managed by affiliates of the Sponsor, Fortress
Investment Group LLC (“FIG”). Therefore, CIM has treated the MHM Group as equivalent to Sponsor-related
Persons. As such, CIM and INV have sincerely deliberated, discussed, and resolved to enter into the MOU in
accordance with the internal rules of CIM to handle the related party transactions.
1. Outline of the MOU
Since the spread of the new coronavirus (COVID-19) began to have a tremendous impact on the hotel
sector, INV entered into an MOU with the MHM Group to amend each MLPM Agreement six times in total
starting from May 11, 2020 (collectively referred to as the “Executed MOU”). For details of the previously
Executed MOU, please refer to each press release described in "6. Reference Press Release List" below.
These Executed MOU were agreed as a tentative measure with respect to the 73 domestic hotels leased
through the trustees to the MHM Group (the “Subject Properties”) for the period from March 1, 2020 to
December 31, 2021. Thus, unless otherwise agreed, from January 2022 onward, the terms and conditions
under the MLPM Agreements prior to the amendment by each MOU (hereinafter referred to as theThis English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

1

"Original Leasing Terms and Conditions") will be applied. On the other hand, the impact of the spread of
COVID-19 on the hotel sector remains enormous. As of today, while the sixth wave that started from the
beginning of the year seems to have peaked out, the daily number of new COVID-19 cases in Japanremains high. Domestic hotel demand remains sluggish partly due to the quasi-state of emergency
declarations widely applied across the country, and it remains impossible for the MHM Group to pay thefull amount of the fixed rent under the Original Leasing Terms and Conditions. In order to continue theoperation of the Subject Properties by the MHM Group, a certain amount of rent reduction is unavoidable
during the period from January 2022 onward as well.
Under such circumstances, INV has concluded that INV must accept to amend a part of the MLPM
Agreement as an additional tentative measure in order to continue the operation of the Subject Properties,
upon giving due consideration to INV’s interests to the fullest extent as well as its financial conditions.
Consequently, as a result of discussions and negotiations with the MHM Group, INV and CIM determined
to enter into the MOU with the MHM Group and change the Original Leasing Terms and Conditions as
described below as a tentative measure for the period from January 1, 2022 to June 30, 2022 (the "First
Half of 2022") with respect to the Subject Properties. The period to be covered by the temporary reduction
measures will be six months, the same as the MOU to amend MLPM Contract concluded on March 11,2021 (hereinafter referred to as the “March 2021 MOU”), and different from the three months for the MOU
to amend MLPM Contract concluded on December 8, 2021. In calculating the variable rent, in summary,if the total GOP of all Subject Properties (73 properties) is positive after deducting the management
services fees and the total fixed rent on a six-month basis, INV will receive the positive amount as variable
rent.

This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

2

Items subject toOriginal Leasing Terms

Tentative Measures

Changeand Conditions(First Half of 2022)

Fixed rent (Total

Approx. JPY 4,971 million(For Reference)
Tentative Measures(First Half of 2021)

JPY 900 million (Approx. 18% of theJPYrent for 6 months

amount under the Original Leasing(Approx. 20% of the

1,000

millionfor 73 properties)

Terms and Conditions)amountunder

theOriginal Leasing Terms
and Conditions)
Variable rent

Calculated on a 3-monthCalculated by summing up the rent ofSame as in the column

basis for each hotel.

all 73 properties for six months as

to the left.

described below.
The amount obtained bydeducting

(i)

the

total

The amount obtained by deducting

amountofexpenses,(i) the above total fixed rent (the total

management

services

rent for six months for 73 properties)

fees, and fixed rents of thefrom (ii) the aggregate of the amount

hotel property from (ii) thefor six months for 73 properties,

total monthly sales of the

which

hotel

propertyamountisobtained

by

(if

the

resultsarefees for the hotel for each month fromnegative, the amount shallthe monthly GOP (operating grosscalculation
be JPY 0).

deducting the management services

profit) for each hotel for the samemonth (if the calculation results arenegative, the amount shall be JPY
0).

Payment

Paid on a hotel-by- hotel

Paid on a total basis of 73 hotel

Same as in themethod of rent

basis.

properties.

column to the left.

Payment date

The due date is the 11th of

On August 10, 2022, the sum of the

On August 11, 2021,

the month which is two

total fixed rent and the total variable

the sum of the totalmonths from the month inrent must be paid.

fixed rent and the total

which the last day of thevariable rent shall becalculation period falls (for

paid.

the

fixed

month,

rent,

and

for

every
the

variable rent, every threemonths).

The total fixed rent (for 73 properties for six months in aggregate) of JPY 900 million after the amendment
above is less than the total fixed rent (for 73 properties for six months in aggregate) of JPY 1,000 million in
the First Half of 2021, but is determined in view of (i) the fact that the GOP for Subject Properties in the First
This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

3Half of 2021 did not reach JPY 1,000 million, and (ii) the level that MHM Group is highly likely to be capable
to pay despite the current severe operating conditions. If the GOP for the Subject Properties (after
deducting the management services fees) for the First Half of 2022 performs well, and thereby the actual
result exceeds the total amount of the fixed rent (for 73 properties for six months in aggregate), INV will
receive the amount of such excess amount as variable rent.

Contrary to the MOU to amend the MLPM Contract concluded on May 11, 2020, INV will not bear theproperty management costs nor increase the amount of the management fees payable to the MHM Group
under the provisional measure by the MOU.
For the list of the Subject Properties, please refer to the Appendix. For an overview of the current leaseagreements, including the terms and conditions of rent for each Subject Property, please refer to "Part I
Fund Information / 1 Status of Fund / 5 Management Status / (2) Investment Assets" of the Securities
Report for the 36th fiscal period (from January 1, 2021 to June 30, 2021) filed by INV on September 24,
2021 (available in Japanese only).
The outlook for the future status of the spread of COVID-19 infections and its impact on the demand forhotels is still inevitably uncertain. Therefore, INV plans to make this change a provisional measure for theperiod up to the end of June 2022, and, if necessary, to discuss the details of the changes in the leasing
terms and conditions after such period based on the future situation.
2. Background and Reasons for Conclusion of the MOU and its Impact on INV(1) Background and Reasons
The Japanese economy has deteriorated rapidly since late February 2020 due to the effects of COVID19. On April 7, 2020, the Japanese government declared a state of emergency. In addition, the numberof foreign tourists visiting Japan declined by 99.9% (year-over-year) for each month from April to Julybecause of global travel restrictions. Also, the demand for inbound travel has not recovered due to theJapanese government’s strengthened quarantine measures and restrictions on travel by other countries.
COVID-19 has repeatedly spread and subsided periodically. As a result, the recovery in domestic demand
for travel has been stagnant which has had a serious impact on Japan’s overall economy, especially on the
hotel sector.
The measures under the Executed MOU were tentative ones only applicable for the period from March 1,
2020 to the end of December 2021, and as a result, the MHM Group was able to continue to operate the
Subject Properties to date, and avoid a short-term loss for INV due to a potential bankruptcy of the MHM
Group (i.e., complete loss of rent income, cost burden associated with rebranding, etc.) and a medium- tolong-term loss due to a change of operators (i.e., deterioration of the rent level from the Original Leasing
Terms and Conditions, increase in the management services fees, etc.), which INV and CIM were mostconcerned about.
INV and CIM have closely monitored the performance of the hotel GOP for the Subject Properties andcontinue to request that the MHM Group maximize its cost-cutting efforts, while closely reviewing its
This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

4financial condition. However, if INV and CIM claim payment of the rent to the MHM Group in the same
rent structure for January 2022 and thereafter as stated in the Original Leasing Terms and Conditions, theMHM Group will inevitably default on its obligations, which INV has determined in turn would most likely
impair its medium- to long-term profits. On the other hand, INV and CIM have continued to consider all
options, including the replacement of the tenant, but in light of the current market environment, it remains
extremely difficult to find a successor tenant that can operate all of the Subject Properties under theconditions equivalent to the Original Leasing Terms and Conditions.
Under such circumstances, INV has entered into the MOU after deciding to continue certain tentative
measures as above for the First Half of 2022 to the extent that there is no significant adverse effect on
INV’s cash flow, upon giving due consideration to the fullest scope of INV’s interests.
(2) MOU’s impact on INVGiven the amendment under the MOU, the timing of the next rent payment by the MHM Group will be
postponed to August 10, 2022. The amount of INV’s cash reserves as of the end of January 2022 wasapproximately JPY 17.1 billion, and the amount of INV’s cash reserves are expected to be approximately
JPY 12.1 billion as of the end of July 2022 after considering the reduction of rent from January to June
2022 under the MOU. The estimated amount of (i) payment of operation costs (approximately JPY 0.6
billion), (ii) interest payments for the time being (the total amount of interest for INV’s interest-bearing debt
due during the period from February 2022 to July 2022 is approximately JPY 0.6 billion), and debt
repayment in the amount of JPY 3.6 billion as announced in “Notice concerning Debt Financing(Refinance)” dated March 10, 2022.

Therefore, there is no concern about INV’s operation and cash

position.
3. Outline of MHM
(i)
(ii)

Name

(iii)

Title and name of
President and CEO, Ryoichi Shirota
representative officer
Business
Hotel and Ryokan (Japanese inn) operation and management
CapitalJPY 100 million (as of end of February 2022)
Date of establishment
July 8, 1999
Relationship between INV/Asset Manager and the Tenant/Operator

(iv)
(v)
(vi)
(vii)

Location

MyStays Hotel Management Co., Ltd.
Roppongi Hills North Tower 14th Floor, 6-2-31, Roppongi, Minato-ku,
Tokyo, Japan

Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and MHM, the parent company of MHM is owned by a fundoperated by affiliates of FIG. FIG is a subsidiary of SoftBank Group
Corp., which directly and indirectly holds 100% of CIM’s outstanding
shares.

Personnel relationships

As of today, among the directors of INV and the officers andemployees of CIM, Naoki Fukuda, who is Executive Director of INV
and CEO of CIM, Naoto Ichiki, who is Chairman and Director of CIM,
and Christopher Reed, who is a part-time director of CIM, areseconded from Fortress Investment Group Japan Godo Kaisha, asubsidiary of FIG.

This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

5(Note 1)

Transactional relationships

As of today, INV has entered into lease agreements (Note 1) with MHM
with respect to 73 hotel properties.

Whether the
Tenant/Operator is arelated party

MHM is not a related party of INV/CIM. Further, related persons andaffiliates of MHM are not related parties of INV/CIM. Furthermore,
MHM is not an interested party, etc. of CIM as provided in the Act on
Investment Trusts and Investment Corporations.

Agreements with MHM subsidiaries and management contracts between MHM and tenants are included.

4. Transactions with Interested Persons etc.
The MHM Group, tenants and operators of the Subject Properties, are not Sponsor-related Persons (Note)under the voluntary rules established by CIM as countermeasures against conflicts of interests in the
management of INV’s investments. However, MHM or its Affiliates have received investments throughfunds managed by affiliates of the Sponsor, FIG. Therefore, CIM has treated MHM or its Affiliates as
equivalent to Sponsor-related Persons.
In accordance with Sponsor-Related Person Transaction Rules and Sponsor-Related Person Transaction
Management Manual, which are internal rules of CIM, and following the deliberation and resolution of thecompliance committee meeting and the investment committee meeting both held on March 10, 2022, theboard of directors of CIM held on the same date, and the board of directors of INV held on March 11, 2022
each approved the conclusion of the MOU.
(Note) A Sponsor-related Person is (i) any person who falls under the “Interested Persons, etc.” set forth in the Investment Trust
Act and the Orders for Enforcement of the Act on Investment Trust and Investment Corporations, (ii) all shareholders of CIM
and (iii) special purpose companies (tokubetsu mokuteki kaisha) (a) which delegate their management to persons who fallunder (ii) above, or (b) which are invested by or invested through anonymous partnership (tokumei kumiai) by persons who
fall under (ii) above. Hereinafter the same.

5. Future Outlook
INV’s forecasts for financial results and distribution for the fiscal period ending June 2022 (from January
1, 2022 to June 30, 2022) still remain to be announced since it remains difficult to predict the future
situation of COVID-19 and its impact on hotel industry and operators. INV will make an announcementof the forecasts for the fiscal period ending June 2022 when it determines such forecast.

This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

66. Reference Press Release List
May 11, 2020
Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building
Lease and Property Management Agreement with Major Tenant
September 11, 2020
Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building
Lease and Property Management Agreement pertaining to the rent conditions for the period from Julyto September, 2020 with Major Tenant
December 11, 2020
Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building
Lease and Property Management Agreement pertaining to the rent conditions forthe period from October to December, 2020 with Major Tenant
March 11, 2021
Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building
Lease and Property Management Agreement pertaining to the rent conditions for the period fromJanuary to June, 2021 with Major Tenant
September 10, 2021
Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building
Lease and Property Management Agreement pertaining to the rent conditions for the period from Julyto September, 2021 with Major Tenant
December 8, 2021
Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building
Lease and Property Management Agreement pertaining to the rent conditions for the period from
October to December, 2021 with Major Tenant

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

7

(Appendix)
List of Subject Properties
Property
No.

Property Name

Property
No.

Property Name

D1

Hotel MyStays Kanda

D47

Hotel MyStays Premier Kanazawa

D2

Hotel MyStays Asakusa

D49

Hotel MyStays Premier Hamamatsucho

D3

Hotel MyStays Kyoto-Shijo

D50

Hotel MyStays Shin Osaka Conference Center

D4

MyStays Shin- Urayasu Conference Center

D51

Hotel MyStays Premier Omori

D5

Hotel MyStays Maihama

D52

Beppu Kamenoi Hotel

D6

Hotel MyStays Premier Dojima

D53

Hotel MyStays Sapporo Station

D7

Hotel MyStays Nagoya-Sakae

D54

Hotel MyStays Yokohama-Kannai

D8

Hotel MyStays Sakaisuji-Honmachi

D55

Art Hotel Joetsu

D9

Hotel MyStays Yokohama

D56

Art Hotel Hirosaki

D10

Hotel MyStays Nippori

D57

Hotel MyStays Oita

D11

Hotel MyStays Fukuoka-Tenjin-Minami

D58

Hotel MyStays Gotanda

D12Flexstay Inn Iidabashi

D59

Hotel MyStays Tachikawa

D13

Hotel MyStays Ueno Inaricho

D60

Hotel MyStays Premier Akasaka

D14

Flexstay Inn Shinagawa

D61

Hotel MyStays Premier Sapporo Park

D15

Flexstay Inn Tokiwadai

D62

Hotel MyStays Ueno East

D16

Flexstay Inn Sugamo

D63

Hotel MyStays Midosuji Honmachi

D17

Hotel MyStays Otemae

D64

Hotel MyStays Sapporo Aspen

D18

Flexstay Inn Kiyosumi Shirakawa

D65

Art Hotel Ishigakijima

D19

Flexstay Inn Nakanobu P1

D66

Hotel MyStays Fuji Onsen Resort

D20

Flexstay Inn Nakanobu P2

D67

Sonia Otaru

D22

Hotel MyStays Hakodate-Goryokaku

D68

Hotel MyStays Kanazawa Castle

D23

Flexstay Inn Shirogane

D69

Art Hotel Niigata Station

D24

Hotel MyStays Haneda

D70

Hotel MyStays Nagoya Nishiki

D25

Hotel MyStays Kameido P1

D71

Nord Otaru

D26

Hotel MyStays Ueno Iriyaguchi

D72

Hotel MyStays Kagoshima Tenmonkan

D27

Hotel MyStays Kameido P2

D73

Art Hotel Asahikawa

D28

Hotel MyStays Shimizu

D74

Hotel MyStays Matsuyama

D30

Flexstay Inn Higashi-Jujo

D75

Hotel MyStays Sapporo Susukino

D31

Hotel MyStays Utsunomiya

D76

Hotel MyStays Sapporo Nakajima Park

D32

Flexstay Inn Kawasaki-Kaizuka

D77

Hotel MyStays Sapporo Nakajima Park Annex

D34

Flexstay Inn Kawasaki-Ogawacho

D78

Flexstay Inn Sakuragicho

D35

Flexstay Inn Ekoda

D79

MyCUBE by MYSTAYS Asakusa Kuramae

D38

Hotel MyStays Shinsaibashi

D80

Hotel MyStays Kagoshima Tenmonkan Annex

D43

Hotel MyStays Gotanda Station

D81

Hotel MyStays Nayoro

D44

Hotel Epinard Nasu

D82

Hotel MyStays Premier Narita

D45

Hotel MyStays Fukuoka Tenjin

D83

Art Hotel Morioka

D46

Hotel MyStays Hamamatsucho

This English language notice is a translation of the Japanese-language notice released on March 11, 2022 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers toundertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice isprovided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and theJapanese original, the latter shall prevail in all respects.

8