Article 26The members of a specified purpose company (but only a specified purpose company that does not issue preferred equity) are specified equity members, and the members of a specified purpose company that issues preferred equity are specified equity members and preferred equity members (meaning persons that hold preferred equity; the same applies hereinafter).

Article 27(1)A member's liability is limited to the subscription price of the specified equity or preferred equity that the member holds.

(2)A member has the following rights and other rights recognized pursuant to the provisions of this Act with respect to the specified equity or preferred equity that the member holds:

(3)A specified equity member has a voting right at general meetings of members in association with the specified equity that the member holds.

(4)Unless otherwise provided for in this Act, a preferred equity member does not have a voting right at general meetings of members in association with the preferred equity that the member holds; provided, however, that this does not apply if otherwise provided for in the articles of incorporation.

(5)The provisions of the articles of incorporation indicating that members are not granted all of the rights set forth in paragraph (2), items (i) and (ii) are null and void.

(6)The provisions of Article 106 (Exercise of Rights by Co-owners) and Article 109, paragraph (1) (Equality of Shareholders) of the Companies Act apply mutatis mutandis to specified equity or preferred equity in a specified purpose company. In such a case, the term "shareholders" in that paragraph is deemed to be replaced with "members"; and the term "number" in that paragraph is deemed to be replaced with "number of units".

Article 28(1)A specified purpose company must prepare a register of specified equity members and enter or record the following information in the register:

(2)A specified purpose company may fix a specific date (hereinafter referred to as the "reference date" in this Subsection) and specify that the specified equity members entered or recorded in the register of specified equity members as of the reference date are the persons that may exercise their rights.

(3)The provisions of Article 122 (excluding paragraph (4)) (Delivery of Documents Showing Information Entered in Shareholder Register); Article 124, paragraphs (2) and (3) (Record Date); Article 125, paragraphs (1) through (3) (Keeping and Making Available for Inspection of Shareholder Register); and Article 126 (Notice to Shareholders) of the Companies Act apply mutatis mutandis to a register of specified equity members listing the specified equity members of a specified purpose company; the provisions of Article 123 (Administrator of Shareholder Register) of that Act apply mutatis mutandis to the administrator of a register of specified equity members at a specified purpose company; and the provisions of Article 196, paragraphs (1) and (2) (Omission of Notices to Shareholders) of that Act apply mutatis mutandis to a notice to the specified equity member of a specified purpose company. In such a case, the terms "item (i) of the preceding article" and "information required to be entered in the shareholder register" in Article 122, paragraph (1) of the Companies Act are deemed to be replaced with "Article 28, paragraph (1), item (i) of the Asset Securitization Act" and "information set forth in the items of Article 28, paragraph (1) of the Asset Securitization Act", respectively; the term "Shareholders as of the Record Date" in Article 124, paragraph (2) of the Companies Act is deemed to be replaced with "specified equity members stated or recorded in the register of specified equity members as of the reference date"; the term "administrator of shareholder register" in Article 125, paragraph (1) of the Companies Act is deemed to be replaced with "administrator of the register of specified equity members"; the terms "shareholder" and "shareholders" in paragraph (3), items (i) and (ii) of that Article are deemed to be replaced with "member" and "members", respectively; the term "If a share" in Article 126, paragraph (3) of the Companies Act is deemed to be replaced with "If specified equity"; the term "of the share" in paragraph (4) of that Article is deemed to be replaced with "of the specified equity"; the term "Article 299, paragraph (1) (including as applied mutatis mutandis pursuant to Article 325)" in Article 126, paragraph (5) of the Companies Act is deemed to be replaced with "Article 55, paragraph (1) or Article 56, paragraph (1) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

(4)The provisions of paragraph (2); Article 124, paragraphs (2) and (3) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph, and Article 196, paragraph (3) of that Act apply mutatis mutandis to a pledgee for which the information set forth in the items of Article 32, paragraph (3) has been entered or recorded in the register of specified equity members (hereinafter referred to as a "registered pledgee of specified equity").

Article 29(1)A specified equity member may transfer all or part of their specified equity to another specified equity member.

(2)A person other than a specified equity member must have the approval of the specified purpose company in order to acquire specified equity through a transfer.

Article 30(1)A transfer of specified equity may not be asserted against a specified purpose company or any other third party unless the name and address of the person acquiring the specified equity have been entered or recorded in the register of specified equity members.

(2)The provisions of Article 132, paragraph (1) and (2); Article 133; and Article 134 (Entry or Recording of Information Required to Be Entered in the Shareholder Register Not Requested by Shareholders) of the Companies Act apply mutatis mutandis to specified equity in a specified purpose company. In such a case, the term "shareholders" in those provisions is deemed to be replaced with "specified equity members"; the phrase "information that is required to be entered in the shareholder register" in those provisions is deemed to be replaced with "information set forth in the items of Article 28, paragraph (1) of the Asset Securitization Act"; the term "shareholder register" in those provisions is deemed to be replaced with "register of specified equity members"; the term "acquirer of shares" in those provisions is replaced with "acquirer of specified equity"; the term "treasury shares" in Article 132, paragraph (1) of the Companies Act is deemed to be replaced with "the company's own specified equity (meaning the company's own specified equity as defined in Article 59, paragraph (2) of the Asset Securitization Act)"; the term "Article 136" in Article 134, item (i) of the Companies Act is deemed to be replaced with "Article 31, paragraph (1) of the Asset Securitization Act"; the term "Article 137, paragraph (1)" in Article 134, item (ii) of the Companies Act is deemed to be replaced with "Article 31, paragraph (2) of the Asset Securitization Act"; the term "Article 140, paragraph (4)" in Article 134, item (iii) of the Companies Act is deemed to be replaced with "Article 31, paragraph (7) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 31(1)If a specified equity member seeks to transfer specified equity they hold to a person other than a specified equity member (excluding the specified purpose company that has issued the specified equity), the member may request the specified purpose company to decide whether to approve that person's acquisition of specified equity.

(2)A person that acquires specified equity from a person other than the specified purpose company that has issued that specified equity (but only if the acquirer is a person other than a specified equity member and is not the specified purpose company itself; hereinafter referred to as an "acquirer of specified equity" in this Article) may request the specified purpose company to decide whether to approve the acquisition that the acquirer of specified equity has made of that specified equity.

(3)Except in a case that Cabinet Office Order prescribes as one in which it is unlikely to damage the interests of interested persons, a person must make a request under the provisions of the preceding paragraph jointly with the person stated or recorded in the register of specified equity members as the specified equity member whose specified equity has been acquired, or the heir or other general successor of that specified equity member.

(4)To make a request as set forth in one of the following items (hereinafter referred to as a "transfer approval request" in this Article), a person must disclose the information that each item prescribes:

(5)The decision on whether to grant the approval referred to in paragraph (1) or paragraph (2) must be made by a resolution of the general meeting of members.

(6)Once a specified purpose company reaches the decision referred to in the preceding paragraph, the company must notify the person making the transfer approval request (hereinafter referred to as the "person requesting transfer approval" in this Article) of the details of that decision.

(7)If a specified purpose company receives a request referred to in paragraph (4), item (i), sub-item (c) or paragraph (4), item (ii), sub-item (c) and decides not to grant the approval referred to in paragraph (1) or (2), the company must designate a person to purchase the specified equity to which the transfer approval request pertains (excluding the specified purpose company itself; hereinafter referred to as a "designated purchaser" in this Article), by resolution at a general meeting of members

(8)The provisions of Article 142, paragraphs (1) and (2) (Designated Purchaser's Notice to Purchase) of the Companies Act apply mutatis mutandis to a designated purchaser; the provisions of Article 143, paragraph (2) (Withdrawal of Requests for Approval of Transfer) of that Act apply mutatis mutandis to a person requesting transfer approval that makes a request as referred to in paragraph (4), item (i), sub-item (c) or paragraph (4), item (ii), sub-item (c); and the provisions of Article 144, paragraphs (1) through (6) (Determination of Sale Price); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (2) (but only the part that involves item (iii)) (Hearing of Statements); Article 870-2 (Sending of a Copy of a Written Motion); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (v)) (Immediate Appeal); Article 872-2 (Sending of a Copy of a Petition for Immediate Appeal); the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of that Act apply mutatis mutandis if a person has been notified under the provisions of Article 142, paragraph (1) of that Act as applied mutatis mutandis pursuant to this paragraph. In such a case, the term "Article 140, paragraph (4)" in Article 142, paragraph (1) of the Companies Act is replaced with "Article 31, paragraph (7) of the Asset Securitization Act"; the terms "per share" and "stock company" in Article 142, paragraph (2) of the Companies Act are deemed to be replaced with "per unit" and "specified purpose company", respectively; the terms "subject shares" and "Article 140, paragraph (1), item (ii)" in Article 144, paragraph (1) and paragraphs (4) through (6) of the Companies Act are deemed to be replaced with "specified equity prescribed in Article 31, paragraph (7) of the Asset Securitization Act" and "Article 142, paragraph (1), item (ii)", respectively; the term "stock company" in Article 144, paragraphs (1), (2), and (6) of the Companies Act is deemed to be replaced with "designated purchaser"; the term "per share" in paragraph (5) of that Article is deemed to be replaced with "per unit"; the term "Article 141, paragraph (2)" in Article 144, paragraph (6) of that Act is deemed to be replaced with "Article 142, paragraph (2)"; and Cabinet Order provides for any other necessary technical replacement of terms.

(9)The provisions of Article 145 (excluding item (ii)) (Cases Where a Stock Company is Deemed to Have Approved) of the Companies Act apply mutatis mutandis to the approval referred to in paragraph (1) or (2) by a specified purpose company. In such a case, the term "Article 139, paragraph (2)" in Article 145, item (i) of that Act is deemed to be replaced with "Article 31, paragraph (6) of the Asset Securitization Act".

Article 32(1)A specified equity member may create a pledge over the specified equity they hold.

(2)A pledge of specified equity may not be asserted against a specified purpose company or any other third party unless the name and address of the pledgee have been entered or recorded in the register of specified equity members.

(3)A person that has created a pledge over specified equity may request the specified purpose company to enter or record the following information in the register of specified equity members:

(4)If a specified purpose company takes one of the following actions, any pledge over specified equity is in effect over the money and assets that the specified equity member whose specified equity it is entitled to receive as a result of the action (meaning money and other assets; the same applies hereinafter):

(5)A registered pledgee of specified equity may receive the money and assets referred to in the preceding paragraph (but only the money) and use them to cover repayment of the pledgee's own claims in preference to other creditors.

(6)The provisions of Article 147, paragraph (3) (Perfection of Pledges of Shares) of the Companies Act apply mutatis mutandis to specified equity, and the provisions of Article 149, paragraphs (1) through (3) (Delivery of Documents Showing Information Entered in Shareholder Register); Article 150 (Notices to Registered Pledgees of Shares); Article 152, paragraph (2); and Article 154, paragraph (2) (but only the part that involves item (i)) (Effect of Pledge of Shares) of that Act apply mutatis mutandis to a registered pledgee of specified equity that holds a pledge over specified equity in a specified purpose company. In such a case, the term "shareholder register" in those provisions is deemed to be replaced with "register of specified equity members"; the terms "the items of the preceding Article" and "the items of that Article" in Article 149, paragraph (1) of that Act are deemed to be replaced with "the items of Article 32, paragraph (3) of the Asset Securitization Act" and "the items of that paragraph", respectively; the term "paragraph (1) of the preceding Article" in Article 152, paragraph (2) of the Companies Act is deemed to be replaced with "Article 32, paragraph (4) of the Asset Securitization Act"; the term "the preceding paragraph" in Article 154, paragraph (2) of the Companies Act is deemed to be replaced with "Article 32, paragraph (5) of the Asset Securitization Act"; the term "Article 151, paragraph (1) items (i) through (vi), item (viii), item (ix), or item (xiv)" in Article 154, paragraph (2), item (i) of the Companies Act is deemed to be replaced with "the items of Article 32, paragraph (4) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 33(1)Notwithstanding the provisions of Article 29, paragraph (2), specified equity may be placed in trust with a trust company or financial institution (meaning a trust company or a bank or other financial institution engaged in trust business; the same applies hereinafter) without an approval at a general meeting of members.

(2)The following conditions must be attached to the agreement for a trust involving specified equity (hereinafter referred to as a "specified equity trust"):

(3)The provisions of Article 30, paragraph (1) and the preceding Article and the provisions of Article 133 (Entering or Recording Information Required to Be Entered in the Shareholder Register at the Request of Shareholders) of the Companies Act apply mutatis mutandis if specified equity is placed in trust based on the provisions of paragraph (1). In such a case, the phrase "the name and address of the person acquiring" in Article 30, paragraph (1) is deemed to be replaced with "the names and addresses of the trustee and the beneficiaries and any other information that Cabinet Office Order prescribes with regard to the specified equity trust, as well as an indication that the specified equity trust has been created"; the term "specified equity" in the provisions of paragraph (1) through (3) of the preceding Article is deemed to be replaced with "beneficial interest in a specified equity trust"; the terms "over specified equity" and "whose specified equity" in paragraph (4) of that Article are deemed to be replaced with "over the beneficial interest in a specified equity trust" and "whose beneficial interest in the specified equity trust", respectively; the term "stock company" in Article 133, paragraph (1) of the Companies Act is deemed to be replaced with "specified purpose company"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 34(1)Unless a specified purpose company purchases specified equity in response to a demand under Article 182-4, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 38, or unless it is necessary to do so in using its rights to achieve its purpose, a specified purpose company must not acquire its own specified equity or receive it as the subject of a pledge.

(2)The provisions of the preceding paragraph do not apply if a specified purpose company acquires its own specified equity in order to purchase from the heir of a specified equity member the specified equity of that specified purpose company which the heir has acquired through inheritance from the specified member, within one year of the opening of the succession; provided, however, that this does not apply to a case that falls under one of the following items:

(3)A resolution must be passed at a general meeting of members in order for a specified purpose company to effect the purchase of specified equity referred to in the preceding paragraph. In such a case, the specified member selling the specified equity may not exercise the voting right.

(4)If a specified purpose company acquires the specified equity referred to in paragraph (2), and the sum total of the amounts set forth in Article 114, paragraph (1), items (ii) through (iv) at the time when the approval referred to in Article 104, paragraph (2) is obtained (or, in the case prescribed in the first sentence of paragraph (4) of that Article, at the time when the report referred to in the second sentence of that paragraph is made) for the financial statements prescribed in Article 102, paragraph (2) in the business year in which the date of the equity's acquisition falls (or, if the preceding business year is not the most recent business year (meaning the most recent of the business years for which approval under Article 104, paragraph (2) has been obtained (or, in the case prescribed in the first sentence of paragraph (4) of that Article, for which the report referred to in the second sentence of that paragraph has been made) for the financial statements prescribed in Article 435, paragraph (2) in each business year; the same applies hereinafter), the business year preceding that one) exceeds the amount referred to in Article 114, paragraph (1), item (i), the directors undertaking the duty of acquiring the equity have a joint and several obligation to pay the excess amount (or, if the excess amount exceeds the total amount of monies delivered to specified members as a result of the acquisition of the specified equity, the total amount of those monies) to the specified purpose company; provided, however, that this does not apply to directors that prove that they did not neglect to exercise due care in undertaking that duty.

(5)The provisions of Article 94, paragraph (4) apply mutatis mutandis to the liability of directors referred to in the preceding paragraph.

(6)A specified purpose company must dispose of any specified equity or pledge it has acquired in a case prescribed in paragraph (1) or the main text of paragraph (2) at an appropriate time.

Article 35Specified equity may not be cancelled unless the amount of specified capital is reduced pursuant to the provisions of Article 108.

Article 36(1)In seeking to solicit persons to subscribe for the specified equity it issues, a specified purpose company must, on each occasion, decide the following information about the specified equity for subscription (meaning the specified equity to be alloted to persons offering to subscribe for it in response to that solicitation; hereinafter the same applies in this Article):

(2)The information set forth in the items of the preceding paragraph (hereinafter referred to as the "subscription particulars" in this Article) must be decided by resolution at a general meeting of members.

(3)If the amount to be paid in referred to in paragraph (1), item (ii) is particularly favorable to the persons subscribing for specified equity for subscription, the directors must disclose the reason for the need to solicit those persons at that amount to be paid in, at the general meeting of members referred to in the preceding paragraph.

(4)The subscription particulars must be prescribed equally for each solicitation referred to in paragraph (1).

(5)The provisions of Articles 202 through 213-3 (excluding Article 202, paragraph (3), Article 206-2; Article 207, paragraph (9), items (iii) and (v); and Article 213, paragraph (1), item (iii)) (Cases Where Entitlement to Allotment of Shares Is Granted to Shareholders; Applications for Shares for Subscription; Allotment of Shares for Subscription; Special Provisions on Subscription and Allotment of Shares for Subscription; Subscription for Shares for Subscription; Contribution of Property Other Than Monies; Performance of Contributions; Timing of Shareholder Status; Demanding Cessation of the Issuing of Shares for Subscription; Restrictions on Invalidation or Rescission of Subscription; Liabilities of Persons Who Subscribed for Shares with Unfair Amount To Be Paid In; Liabilities of Directors in Case of Shortfall in Value of Property Contributed; Liabilities of Subscribers of Shares for Subscription for which the Performance of Contribution is Disguised; Liabilities of Directors in the Case of Disguising the Performance of Contribution); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (i) and item (iv)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the specified equity for subscription of a specified purpose company referred to in paragraph (1). In such a case, the term "shareholder" in those provisions is deemed to be replaced with "specified equity member"; the term "shares" in those provisions (excluding Article 213-2, paragraph (2) of that Act) is deemed to be replaced with "specified equity"; the term "number" in those provisions is deemed to be replaced with "number of units"; the term "Article 199, paragraph (1), item (iii)" in those provisions is deemed to be replaced with "Article 36, paragraph (1), item (iii) of the Asset Securitization Act"; the term "Article 199, paragraph (1), item (iv)" in those provisions is deemed to be replaced with "Article 36, paragraph (1), item (iv) of the Asset Securitization Act"; the term "subscription requirements" in Article 202, paragraph (1) of the Companies Act is deemed to be replaced with "subscription details decided by resolution at a general meeting of members"; the term "one share" in paragraph (2) of that Article is deemed to be replaced with "one unit"; the term "paragraphs (2) through (4) of Article 199 and the preceding two Articles" in Article 202, paragraph (5) of the Companies Act is deemed to be replaced with "Article 36, paragraphs (2) and (3) of the Asset Securitization Act"; the term "shareholders meeting" in Article 204, paragraph (2) and Article 205, paragraph (2) of that Act is deemed to be replaced with "general meeting of members"; the term "total number of issued shares" in Article 207, paragraph (9), item (i) of the Companies Act is replaced with "total number of units of specified equity"; the term "treasury shares" in Article 210 of the Companies Act is replaced with "the company's own specified equity (meaning the company's own specified equity as prescribed in Article 59, paragraph (2) of the Asset Securitization Act)"; the term "laws and regulations or articles of incorporation" in Article 210, item (i) of the Companies Act is deemed to be replaced with "laws and regulations, asset securitization plan, or articles of incorporation"; the phrase "executive directors who carried out duties regarding the solicitation of subscribers for such shares for subscription (or, for a company with a nominating committee, etc., executive officers; hereinafter the same applies in this item) and other persons prescribed by Order of the Ministry of Justice as persons who were involved, in the performance of their duties, in the execution of the business of such executive directors" in Article 213, paragraph (1), item (i) of that Act is deemed to be replaced with "directors engaged in duties involving the solicitation of subscribers for specified equity for subscription and persons that Ministry of Justice Order prescribed as being involved, in the course of their duties, in the executive management of the business that those directors carry out"; the term "shareholders meeting" in item (ii) of that paragraph is deemed to be replaced with "general meeting of members"; the term "all shareholders" in Article 213-2, paragraph (2) of that Act is deemed to be replaced with "all members"; and Cabinet Order provides for any other necessary technical replacement of terms.

(6)On the date referred to in paragraph (1), item (iv) (or if the period referred to in that paragraph has been determined, on the last day of that period), a specified purpose company is deemed to have amended the articles of incorporation to increase the amount of specified capital by the amount equivalent to that of the assets paid in or delivered.

(7)The provisions of Article 64 (Certificate of Deposit of Paid Monies) of the Companies Act apply mutatis mutandis to a bank or equivalent entity that handles payment under the provisions of Article 208, paragraph (1) of that Act as applied mutatis mutandis pursuant to paragraph (5). In such a case, the term "Article 57, paragraph (1)" in Article 64, paragraph (1) of the Companies Act is deemed to be replaced with "Article 36, paragraph (1) of the Asset Securitization Act"; the term "incorporators" in Article 64, paragraph (1) of the Companies Act is replaced with "directors"; and the term "stock company after establishment" in paragraph (2) of that Article is deemed to be replaced with "specified purpose company".

(8)The provisions of Article 828, paragraph (1) (but only the part that involves item (ii)) and paragraph (2) (but only the part that involves item (ii)) (Actions Seeking Invalidation of Acts Concerning the Organization of a Company); Article 834 (but only the part that involves item (ii)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Article 836, paragraphs (1) and (3) (Order to Provide Security); Articles 837 through 840 (Mandatory Consolidation of Oral Arguments; Persons Affected by an Upholding Judgment; Effects of a Judgment of Invalidation, Revocation or Rescission; Effects of a Judgment of Invalidation of New Share Issue); Article 846 (Liability for Damages in Cases Where the Plaintiff Is Defeated); and Article 937, paragraph (1) (but only the part that involves item (i) (b)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action to invalidate the issuance of specified equity by a specified purpose company after its establishment, and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (ii)) (Immediate Appeal); the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Articles 875 through 877 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act; Supreme Court Rules; Mandatory Consolidation of Hearings); and Article 878, paragraph (1) (Effects of a Judicial Decision) of the Companies Act apply mutatis mutandis to a petition under Article 840, paragraph (2) of that Act as applied mutatis mutandis pursuant to this paragraph. In such a case, the phrase "within six months from the day on which the share issue became effective (or, for a stock company which is not a public company, within one year from the day on which the issuance of shares became effective)" in Article 828, paragraph (1), item (ii) of the Companies Act is deemed to be replaced with "within one year"; the term "shareholder, etc." in paragraph (2), item (ii) of that Article is deemed to be replaced with "member, director, company auditor, or liquidator"; and Cabinet Order provides for any other necessary technical replacement of terms.

(9)The provisions of Article 829 (but only the part that involves item (i)) (Action for Declaratory Judgment of Absence of a New Share Issue); Article 834 (but only the part that involves item (xiii)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Articles 836 through 838 (Order to Provide Security; Mandatory Consolidation of Oral Arguments; Persons Affected by an Upholding Judgment); Article 846 (Liability for Damages in Cases Where the Plaintiff Is Defeated); and Article 937, paragraph (1) (but only the part that involves item (i), sub-item (e)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action seeking a declaratory judgment establishing the non-issuance of specified equity by a specified purpose company after its establishment. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

(10)The provisions of Article 97, paragraph (3) and the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2); Article 847-2; Article 847-3; Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Action to Enforce Liability at a Stock Company) of the Companies Act apply mutatis mutandis to an action demand payment under the provisions of Article 212, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5); to an action under Article 213, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5) to enforce the liability of directors, etc. as prescribed in Article 213, paragraph (1) of the Companies Act; to an action to demand payment or delivery under the provisions of Article 213-2, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5); and to an action under the provisions of Article 213-3, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5) to enforce the liability of a director as prescribed in Article 213-3, paragraph (5) of the Companies Act. In such a case, the term "shareholder (excluding a holder of shares less than one unit who is unable to exercise rights pursuant to the provisions of the articles of incorporation) having the shares consecutively for the preceding six months or more (or, in cases where a shorter period is prescribed in the articles of incorporation, such period or more)" in Article 847, paragraph (1) of the Companies Act is deemed to be replaced with "specified equity member, or a preferred equity member that has held preferred equity continuously for the preceding six months (or, if a shorter period is prescribed in the articles of incorporation, that period)"; the term "shareholder" in paragraph (3) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "that specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849, paragraph (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholders" in paragraph (5) of that Article is deemed to be replaced with "specified equity members and preferred equity members"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 37A specified purpose company must not issue securities that are payable to order or in bearer form for specified equity.

Article 38The provisions of Article 180 (excluding paragraph (2), items (iii) and (iv) and paragraphs (3) and (4)) (Consolidation of Shares); Article 181 (Notices to Shareholders); Article 182, paragraph (1) (Effectuation), Article 182-2 (Keeping and Inspection of Documents related to the Consolidation of Shares); Article 182-3 (Request to Cease Consolidation of Shares); Article 182-4 (excluding paragraph (5)) (Dissenting Shareholders' Appraisal Rights); Article 182-5 (excluding paragraph (7)) (Determination of the Price of Shares); Article 182-6 (Keeping and Inspection of Documents related to Consolidation of Shares); Article 234, paragraph (2) and Article 235, paragraph (1) (Treatment of Fractions); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 871 (Appending of the Reason); Article 874 (but only the part that involves item (iv)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to consolidation of a specified purpose company's specified equity, and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (2) (but only the part that involves item (ii)) (Hearing of Statements); Article 870-2 (Sending a Copy of the Written Petition); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (v)) (Immediate Appeal); Article 872-2 (Sending of a Copy of Petition for Appeal); the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the demand under the provisions of Article 182-4, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to this Article. In such a case, the term "shareholders meeting" in Article 180, paragraph (2) of the Companies Act is deemed to be replaced with "general meeting of members"; the term "shareholders (or, for a company with class shares, meaning the class shareholders of the classes of shares under paragraph (2), item (iii) of the preceding Article; hereinafter the same applies in this Subsection)" in Article 181, paragraph (1) of that Act is deemed to be replaced with "specified equity members"; the term "registered pledgees of the shares" in Article 181, paragraph (1) of that Act is deemed to be replaced with "registered pledgees of specified equity"; the term "shareholders" in Article 182, paragraph (1) of that Act is deemed to be replaced with "specified equity members"; the term "number" in that paragraph is deemed to be replaced with "number of units"; the term "paragraph (2) item (i) of that Article" in that paragraph is deemed to be replaced with "Article 180, paragraph (2), item (i)"; the phrase "shareholders meeting under Article 180, paragraph (2) (in cases where a resolution of a class meeting is required for consolidation of shares, including the class meeting; the same applies in Article 182-4, paragraph (2))" in Article 182-2, paragraph (1), item (i) of that Act is deemed to be replaced with "general meeting of members"; the term "shareholders" in Article 182-2, paragraph (2) of that Act is deemed to be replaced with "specified equity members"; the term "laws and regulations or articles of incorporation" in Article 182-3 of that Act is deemed to be replaced with "laws and regulations, the asset securitization plan, or articles of incorporation"; the term "shareholders" in that Article is deemed to be replaced with "specified equity members"; the term "one share in the number" in Article 182-4, paragraph (1) of that Act is deemed to be replaced with "one unit in the number of units"; the term "dissenting shareholders" in that paragraph is deemed to be replaced with "dissenting specified equity members"; the term "one share from" in that paragraph is replaced with "one unit from"; the term "dissenting shareholders" in Article 182-4, paragraph (2) of that Act is deemed to be replaced with "dissenting specified equity members"; the term "the following shareholders" in that paragraph is deemed to be replaced with "the following specified equity members"; the term "shareholders meeting" in Article 182-4, paragraph (2), item (i) of that Act is deemed to be replaced with "general meeting of members"; the term "A shareholder who" in that item is deemed to be replaced with "A specified equity member that"; the term "shareholders meeting" in Article 182-4, paragraph (2), item (ii) of that Act is deemed to be replaced with "general meeting of members"; the term "A shareholder who may not" in that item is deemed to be replaced with "A specified equity member that may not"; the term "shareholders" in Article 182-4, paragraph (3) of that Act is deemed to be replaced with "specified equity members"; the term "exercise of appraisal rights" in Article 182-4, paragraph (4) of that Act is deemed to be replaced with "exercise of appraisal rights for specified equity"; the phrase "the number of shares with regard to which the shareholder is exercising appraisal rights (or, for a company with class shares, the classes of the shares and the number of shares for each class)" in that paragraph is deemed to be replaced with "the number of units with regard to which the specified equity member is exercising appraisal rights for specified equity"; the term "exercise of appraisal rights" in Article 182-4, paragraph (6) of that Act is deemed to be replaced with "exercise of appraisal rights for specified equity"; the term "shareholder" in that paragraph is deemed to be replaced with "specified equity member"; the term "exercise of appraisal rights" in Article 182-4, paragraph (7) of that Act is deemed to be replaced with "exercise of appraisal rights for specified equity"; the term "exercise of appraisal rights" in Article 182-5, paragraph (1) of that Act is deemed to be replaced with "exercise of appraisal rights for specified equity"; the term "shareholder" in that paragraph is deemed to be replaced with "specified equity member"; the term "shareholders" in Article 182-5, paragraph (2) of that Act is deemed to be replaced with "specified equity member"; the term "shareholders" in Article 182-5, paragraph (3) of that Act is deemed to be replaced with "specified equity members"; the term "exercise of appraisal rights" in that paragraph is deemed to be replaced with "exercise of appraisal rights for specified equity"; the term "shareholders" in Article 182-5, paragraph (5) of that Act is deemed to be replaced with "specified equity members"; the term "exercise of appraisal rights" in Article 182-5, paragraph (6) of that Act is deemed to be replaced with "exercise of appraisal rights for specified equity"; the term "number" in Article 182-6, paragraph (1) of that Act is deemed to be replaced with "number of units"; the term "shareholders" in Article 182-6, paragraph (3) of that Act is deemed to be replaced with "specified equity members"; the term "the preceding paragraph" in Article 234, paragraph (2) of that Act is deemed to be replaced with "Article 235, paragraph (1) as applied mutatis mutandis pursuant to Article 38 of the Asset Securitization Act"; the term "number" in Article 235, paragraph (1) of that Act is deemed to be replaced with "number of units"; the term "shareholders" in that paragraph is deemed to be replaced with "specified equity members"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 39(1)A specified purpose company may solicit persons to subscribe for preferred equity in accordance with the provisions of the asset securitization plan and as decided by the director (or as decided by a majority of the directors, if there are multiple directors).

(2)At a Type II Specified Purpose Company as set forth in Article 51, paragraph (1), item (ii), if the amount to be paid in for preferred equity for subscription (meaning preferred equity that is to be allotted to persons offering to subscribe for preferred equity in response to the solicitation referred to in the preceding paragraph; hereinafter the same applies in this Subsection) (such an amount means the amount of monies to be paid in exchange for one unit of preferred equity for subscription; hereinafter the same applies in this Subsection) is particularly favorable to the persons subscribing for that preferred equity for subscription, the directors, at a general meeting of members, must explain the reason for the need to solicit those persons at that amount to be paid in, and the class, the number of units, and the amount to be paid in for that preferred equity for subscription must be determined by resolution at a general meeting of members.

(3)A preferred equity member is entitled to vote on the resolution referred to in the preceding paragraph.

(4)The provisions of Article 199, paragraph (5) (Determination of Subscription Requirements) of the Companies Act apply mutatis mutandis to the amount to be paid in for preferred equity for subscription.

Article 40(1)A specified purpose company must notify a person seeking to offer to subscribe for preferred equity for subscription in response to the solicitation referred to in paragraph (1) of the preceding Article of the following information:

(2)A person seeking to offer to subscribe for preferred equity for subscription in response to the solicitation referred to in paragraph (1) of the preceding Article must deliver a document stating the following information to the specified purpose company:

(3)In lieu of delivering a document referred to in the preceding paragraph, a person making an offer referred to in that paragraph may provide the company with the information that is required to be entered in the document referred to in that paragraph by electronic or magnetic means (meaning by using an electronic data processing system or applying other information and communications technology by means that Cabinet Office Order prescribes; hereinafter the same applies except in Article 194, paragraph (1), item (iii)) with the consent of the specified purpose company, pursuant to Cabinet Order provisions. In such a case, the person making the offer is deemed to have delivered the document referred to in the preceding paragraph.

(4)The provisions of paragraph (1) do not apply to cases in which the specified purpose company has delivered a prospectus as prescribed in Article 2, paragraph (10) of the Financial Instruments and Exchange Act stating the information set forth in the items of that paragraph to the person seeking to make an offer as referred to in paragraph (1), and to other cases that Cabinet Office Order prescribes as those that are unlikely to result in insufficient protection of the person seeking to make the offer to subscribe for preferred equity for subscription.

(5)If information as set forth in the items of paragraph (1) changes, the specified purpose company must immediately notify a person that has offered to subscribe as referred to in paragraph (2) (hereinafter the person is referred to as an "offeror" in this Subsection) of this and of the information that has changed.

(6)It is sufficient for a notice or demand that a specified purpose company issues to an offeror to be sent to the address referred to in paragraph (2), item (i) (or, if the offeror has notified the specified purpose company of another place or contact address for receiving notices or demands, that place or contact address).

(7)The notice or demand referred to in the preceding paragraph is deemed to have arrived at the time that it would normally arrive.

(8)A director must respond to a request by an offeror to inspect the asset securitization plan or to be issued a certified copy or extract of the asset securitization plan.

(9)With the consent of the offeror, in lieu of delivering a certified copy or extract of the asset securitization plan under the provisions of the preceding paragraph, a director may use electronic or magnetic means to provide the offeror with the information that is required to be entered in the certified copy or extract of the asset securitization plan, pursuant to Cabinet Order provisions. In such a case, the director is deemed to have issued the offeror a certified copy or extract of the asset securitization plan.

(10)Assets other than money may not be the subject of contribution for preferred equity.

Article 41(1)A specified purpose company must decide which of the persons among the offerors the preferred equity for subscription are to be allotted preferred equity for subscription and the number of units of preferred equity for subscription to be allotted to those persons.In this case, the specified purpose company may reduce the number of units of preferred equity for subscription to be allotted to the offerors to below the number referred to in paragraph (2), item (ii) of the preceding Article.

(2)The provisions of paragraphs (1) through (7) of the preceding Article and the preceding paragraph do not apply if a person seeking to subscribe for preferred equity for subscription concludes a contract to subscribe for the total number of units thereof.

(3)A person as set forth in one of the following items is a subscriber for the number of units of preferred equity for subscription prescribed in that item:

(4)Once the total number of units of preferred equity for subscription have been subscribed for, the director, without delay, must have each of the subscribers pay in the full amount to be paid in for the preferred equity for subscription for which they have subscribed (hereinafter referred to as "performance of contribution" in this Subsection), at the place where the bank or equivalent entity that the specified purpose company specifies for handling the payments.

(5)The provisions of Article 208, paragraphs (4) and (5) (Performance of Contributions) of the Companies Act apply mutatis mutandis to a specified purpose company's preferred equity for subscription. In such a case, the term "shareholder" in paragraphs (4) and (5) of that Article is deemed to be replaced with "preferred equity member".

(6)The provisions of Article 64 (Certificate of Deposit of Paid Monies) of the Companies Act apply mutatis mutandis to a bank or equivalent entity handling the performance of contributions as referred to in paragraph (4), and the provisions of Article 211 (Restrictions on Invalidation or Rescission of Subscription) of that Act apply mutatis mutandis to preferred equity for subscription. In such a case, the term "Article 57, paragraph (1)" in Article 64, paragraph (1) of the Companies Act is deemed to be replaced with "Article 39, paragraph (1) of the Asset Securitization Act"; the term "incorporators" in Article 64, paragraph (1) of the Companies Act is deemed to be replaced with "directors"; the term "stock company after establsihment" in paragraph (2) of that Article is deemed to be replaced with "specified purpose company"; the term "Article 205, paragraph (1)" in Article 211, paragraph (1) of the Companies Act is deemed to be replaced with "Article 41, paragraph (2) of the Asset Securitization Act"; the term "Article 209, paragraph (1)" in Article 211, paragraph (2) of the Companies Act is deemed to be replaced with "Article 42, paragraph (2) of the Asset Securitization Act"; the term "shareholder" in Article 211, paragraph (2) of the Companies Act is deemed to be replaced with "preferred equity member"; and the term "shares" in that paragraph is replaced with "preferred equity".

Article 42(1)A specified purpose company must register the following information in the locality of its head office as information about the issuance of preferred equity within two weeks from the date on which payment is made in full for the total number of units of preferred equity it has issued:

(2)A subscriber for preferred equity for subscription becomes a preferred equity member holding the preferred equity for subscription for which the subscriber has made a payment under the provisions of paragraph (4) of the preceding Article on the date of registration referred to in the preceding paragraph.

(3)If any part of the preferred equity issued by a specified purpose company remains unsubscribed for at the time of the registration referred to in paragraph (1), the directors are deemed to have jointly subscribed for that part of the equity. The same applies if a subscriber for preferred equity rescinds its manifestation of intention to subscribe for the preferred equity for subscription issued by the specified purpose company after the registration referred to in paragraph (1) has been made.

(4)If there is preferred equity issued by a specified purpose company for which a payment under the provisions of paragraph (4) of the preceding Article has not been made at the time of the registration referred to in paragraph (1), the directors have a joint and several obligation to pay the amount that has not been paid in.

(5)The provisions of Article 210 (Demanding Cessation of the Issuing of Shares for Subscription) of the Companies Act apply mutatis mutandis to the issuance of preferred equity in connection with solicitation referred to in Article 39, paragraph (1) by a specified purpose company, and the provisions of Article 212, paragraph (1) (Liabilities of Persons who Subscribed for Shares with Unfair Amount To Be Paid In) (but only the part that involves item (i)) of that Act apply mutatis mutandis to a subscriber for a specified purpose company's preferred equity for subscription. In such a case, the term "shareholders" in Article 210 of the Companies Act is deemed to be replaced with "members"; the phrase "any law or regulation, or articles of incorporation" in item (i) of that Article is deemed to be replaced with "any law or regulation, the asset securitization plan, or the articles of incorporation"; and Cabinet Order provides for any other necessary technical replacement of terms.

(6)The provisions of Article 828, paragraph (1) (but only the part that involves item (ii)) and paragraph (2) (but only the part that involves item (ii)) (Actions Seeking Invalidation of Acts Concerning the Organization of a Company); Article 834 (but only the part that involves item (ii)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Article 836, paragraph (1) and paragraph (3) (Order to Provide Security); Articles 837 through 840 (Mandatory Consolidation of Oral Arguments; Persons Affected by an Upholding Judgment; Effects of a Judgment of Invalidation, Revocation or Rescission; Effects of a Judgment of Invalidation of New Share Issue); Article 846 (Liability for Damages in Cases Where the Plaintiff Is Defeated); and Article 937, paragraph (1) (but only the part that involves item (i), sub-item (b)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action to invalidate the issuance of preferred equity by a specified purpose company, and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (ii)) (Immediate Appeal); the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Articles 875 through 877 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act; Supreme Court Rules; Mandatory Consolidation of Hearings); and Article 878, paragraph (1) (Effects of a Judicial Decision) of that Act apply mutatis mutandis to a petition under Article 840, paragraph (2) of that Act as applied mutatis mutandis pursuant to this paragraph. In such a case, the phrase "within six months from the day on which the share issue became effective (or, for a stock company which is not a public company, within one year from the day on which the share issue became effective)" in Article 828, paragraph (1), item (ii) of the Companies Act is is deemd to be replaced with "within one year"; the term "Shareholder, etc." in paragraph (2), item (ii) of that Article is deemed to be replaced with "member, director, company auditor, or liquidator"; and Cabinet Order provides for any other necessary technical replacement of terms.

(7)The provisions of Article 829 (but only the part that involves item (i)) (Action for Declaratory Judgment of Absence of a New Share Issue); Article 834 (but only the part that involves item (xiii)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Articles 836 through 838 (Order to Provide Security; Mandatory Consolidation of Oral Arguments; Persons Affected by an Upholding Judgment); Article 846 (Liability for Damages in Cases Where the Plaintiff Is Defeated); and Article 937, paragraph (1) (but only the part that involves item (i), sub-item (e)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action seeking a declaratory judgment establishing the non-issuance of preferred equity by a specified purpose company. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

(8)The provisions of Article 97, paragraph (3) and the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2); Article 847-2; Article 847-3; Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Action to Enforce Liability at a Stock Company) of the Companies Act apply mutatis mutandis to an action for demanding payment under the provisions of Article 212, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5). In such a case, the term "shareholder (excluding a holder of shares less than one unit who may not exercise rights pursuant to the provisions of the articles of incorporation) having the shares consecutively for the preceding six months (or, in cases where a shorter period is prescribed in the articles of incorporation, that period)" in Article 847, paragraph (1) of the Companies Act is deemed to be replaced with "specified equity member, or a preferred equity member that has held preferred equity continuously for the preceding six months or more (or, if a shorter period is prescribed in the articles of incorporation, that period or more)"; the term "shareholder" in paragraph (3) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder who made such demand or the incorporator, etc. referred to in that paragraph" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "that specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849, paragraph (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholders" in paragraph (5) of that Article is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

(9)The provisions of Article 915, paragraph (1) (Registration of a Change) of the Companies Act apply mutatis mutandis to a specified purpose company. In such a case, the phrase "in the items of Article 911, paragraph (3) or in the items of the preceding three Articles" in that paragraph is deemed to replaced with "in the items of Article 42, paragraph (1) of the Asset Securitization Act".

Article 43(1)A specified purpose company must prepare a register of preferred equity members and enter or record the following information in the register:

(2)A specified purpose company may fix a specific date (hereinafter referred to as the "reference date" in this Subsection) and establish that the preferred equity members entered or recorded in the register of preferred equity members as of the reference date are the persons that may exercise their rights.

(3)The provisions of Article 123 (Administrator of Shareholder Register); Article 124, paragraphs (2) and (3) (Record Date), Article 125, paragraphs (1) through (3) (Keeping and Making Available for Inspection of Shareholder Register); and Article 126 (Notice to Shareholders) of the Companies Act apply mutatis mutandis to a register of preferred equity members listing the preferred equity members of a specified purpose company, and the provisions of Article 196, paragraphs (1) and (2) (Omission of Notices to Shareholders) of the Companies Act apply mutatis mutandis to a notice to a preferred equity member. In such a case, the term "administrator of shareholder register" in those provisions is deemed to be replaced with "administrator of the register of preferred equity members"; the term "shareholders as of the record date" in those provisions is deemed to be replaced with "preferred equity members entered or recorded in the register of preferred equity members as of the reference date"; the term "shares" in those provisions is deemed to be replaced with "preferred equity"; the terms "shareholder" and "shareholders" in Article 125, paragraphs (2) and (3) of that Act are deemed to be replaced with "member" and "members", respectively; the term "Article 299, paragraph (1) (including as applied mutatis mutandis pursuant to Article 325)" in Article 126, paragraph (5) of that Act is deemed to be replaced with "Article 56, paragraph (1) of the Asset Securitization Act (including as applied mutatis mutandis pursuant to Article 66, paragraph (3)) of that Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

(4)The provisions of paragraph (2), the provisions of Article 124, paragraphs (2) and (3) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph, and the provisions of Article 196, paragraph (3) (Omission of Notices to Shareholders) of the Companies Act apply mutatis mutandis to a pledgee for which the information set forth in the items of Article 148 of the Companies Act as applied mutatis mutandis pursuant to Article 45, paragraph (4) has been entered or recorded in the register of preferred equity members (hereinafter referred to as a "registered pledgee of preferred equity").

(5)If a specified purpose company has not issued preferred equity securities pursuant to the provisions of Article 217, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to Article 49, paragraph (2) for all of the preferred equity, the company may, in lieu of the public notice referred to in Article 124, paragraph (3) of that Act as applied mutatis mutandis pursuant to paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph), notify the preferred equity members, the registered pledgees of preferred equity, and persons holding convertible specified bonds or subscription rights for new preferred equity of the information for which public notice is required to be given.

Article 44(1)A preferred equity member may transfer the preferred equity the member holds.

(2)A specified purpose company must not restrict the transfer of preferred equity.

(3)A transfer of preferred equity does not become effective unless the preferred equity security representing that preferred equity is delivered.

(4)A transfer of preferred equity that is made prior to the issuance of preferred equity securities is not effective against the specified purpose company.

Article 45(1)A transfer of preferred equity may not be asserted against the specified purpose company unless the name and address of the person acquiring the preferred equity have been entered or recorded in the register of preferred equity members.

(2)The possessor of a preferred equity security is presumed to be the lawful holder of rights to the preferred equity associated with the preferred equity security.

(3)The provisions of Article 131, paragraph (2) (Presumption of Rights) of the Companies Act apply mutatis mutandis to a preferred equity security, and the provisions of Article 132, paragraph (1) and paragraph (2) (Entry or Recording of Information Required to Be Entered in the Shareholder Register Not Requested by Shareholders) and Article 133 (Entering or Recording Information Required to Be Entered in the Shareholder Register at the Request of Shareholders) of that Act apply mutatis mutandis to preferred equity of a specified purpose company. In such a case, the terms "shareholder" and "shareholders" in those provisions are deemed to be replaced with "preferred equity member" and "preferred equity members", respectively; the phrase "information that is required to be entered in the shareholder register" in those provisions is deemed to be replaced with "information set forth in the items of Article 43, paragraph (1) of the Asset Securitization Act"; the term "shareholder register" in those provisions is deemed to be replaced with "register of preferred equity members"; the term "shares" in Article 131, paragraph (2) of the Companies Act is deemed to be replaced with "preferred equity"; and the term "treasury shares" in Article 132, paragraph (1), item (iii) of that Act is deemed to be replaced with "the company's own preferred equity (meaning the company's own preferred equity prescribed in Article 59, paragraph (2) of the Asset Securitization Act)".

(4)The provisions of Article 146 (Pledge of Shares); Article 147, paragraph (2) and paragraph (3) (Perfection of Pledges of Shares); Article 148 (Entries in Shareholder Register); Article 151, paragraph (1) (but only the part that involves items (iv), (viii), (ix), and (xiv)); Article 153, paragraph (2); and Article 154, paragraph (1) and paragraph (2) (but only the part that involves item (i)) (Effect of Pledge of Shares) of the Companies Act apply mutatis mutandis to pledge of a specified purpose company's preferred equity. In such a case, the term "shareholders" in those provisions is deemed to be replaced with "preferred equity members"; the term "share certificates" in those provisions is deemed to be replaced with "preferred equity securities"; the term "registered pledgees of shares" in those provisions is deemed to be replaced with "registered pledgees of preferred equity"; the term "shareholder register" in Article 148 of the Companies Act is deemed to be replaced with "register of preferred equity members"; the term "surplus" in Article 151, paragraph (1) (viii) of that Act is deemed to be replaced with "profits"; the phrase "the cases provided for in paragraph (2) of the preceding Article" in Article 153, paragraph (2) of that Act is deemed to be replaced with "if preferred equity has been consolidated"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 46(1)Except in the following cases, a specified purpose company must not acquire its own preferred equity or receive a number of units of its own preferred equity exceeding one-twentieth of the total number of units of issued preferred equity (meaning preferred equity that the specified purpose company has issued; the same applies hereinafter) as the subject of a pledge:

(2)A specified purpose company must undertake the process to invalidate preferred equity acquired as referred to in item (i) of the preceding paragraph without delay, and must dispose of preferred equity or a pledge acquired as referred to in item (ii) or item (iii) of that paragraph at an appropriate time.

Article 47(1)A specified purpose company may not cancel preferred equity other than pursuant to the provisions of the following paragraph, Article 109, or Article 110, or after obtaining approval at a general meeting of members referred to in Article 159, paragraph (1).

(2)A specified purpose company may, pursuant to the provisions of the asset securitization plan, cancel preferred equity by purchasing preferred equity using the profits to be distributed to preferred equity members. In such a case, the director must fix the date on which the cancellation becomes effective.

(3)If a specified purpose company cancels preferred equity, the specified purpose company must issue public notice by one month prior to the date that has been fixed by the director as the date on which the cancellation is to become effective (referred to as the "effective date" in the following paragraph), indicating that preferred equity securities representing the preferred equity must be submitted to the specified purpose company by that date, and must separately notify each preferred equity member and registered pledgee of preferred equity associated with the preferred equity of this.

(4)Notwithstanding the provisions of the preceding paragraph, if a specified purpose company has not issued preferred equity securities pursuant to the provisions of Article 217, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to Article 49, paragraph (2) for all of the preferred equity, the specified purpose company must issue public notice by two weeks prior to the effective date, indicating that it will cancel preferred equity pursuant to the provisions of paragraph (1) and that the cancellation of the preferred equity is to become effective on the effective date.

(5)The provisions of Article 43, paragraph (5) apply mutatis mutandis to the public notice referred to in the preceding paragraph.

(6)The provisions of Article 219, paragraph (2) (but only the part that involves item (i)) and paragraph (3) (Public Notice in Relation to Submission of Share Certificate) and Article 220 (Cases Where Share Certificates Cannot Be Submitted) of the Companies Act apply mutatis mutandis to submission of preferred equity securities in connection with the cancellation of preferred equity in a specified purpose company. In such a case, the term "share certificate submission day" in Article 219, paragraph (2) of the Companies Act is deemed to be replaced with "the date on which the action becomes effective"; the term "shareholders" in that paragraph is deemed to be replaced with "preferred equity members"; the phrase "acts listed in items (i) through (iv) of the preceding paragraph" in item (i) of that paragraph is deemed to be replaced with "cancellation of preferred equity"; the phrase "the shares provided for in each item of paragraph (1)" in paragraph (3) of that Article is deemed to be replaced with "the preferred equity that is to be cancelled"; the term "share certificate submission day" in that paragraph is deemed to be replaced with "the date on which the action becomes effective"; and the term "the acts listed in each item of paragraph (1) of the preceding Article" in Article 220, paragraph (1) of that Act is deemed to be replaced with "the cancellation of preferred equity".

Article 48(1)A specified purpose company must issue preferred equity securities without delay on or after the date on which the company makes the registration under the provisions of Article 42, paragraph (1).

(2)Preferred equity securities may not be issued until after the registration referred to in the preceding paragraph has been made.

(3)The provisions of Article 215, paragraph (2) (Issuing of Share Certificate) of the Companies Act apply mutatis mutandis to the preferred equity securities of a specified purpose company. In such a case, the term "shares" in that paragraph is deemed to be replaced with "preferred equity" and the term "Article 180, paragraph (2), item (ii)" in that paragraph is deemed to be replaced with "Article 180, paragraph (2), item (ii) as applied mutatis mutandis pursuant to Article 50, paragraph (1) of the Asset Securitization Act".

Article 49(1)A specified purpose company must enter the following information and the serial number in a preferred equity security, and the representative directors of the specified purpose company must sign it or affix their names and personal seals to it:

(2)The provisions of Article 217 (Offer Not to Possess Share Certificates) and Article 291 (Loss of Share Option Certificates) of the Companies Act apply mutatis mutandis to a preferred equity security representing preferred equity held by a preferred equity member of a specified purpose company. In such a case, the terms "number" and "company with class shares" in Article 217, paragraph (2) of the Companies Act are deemed to be replaced with "number of units" and "specified purpose company issuing two or more classes of preferred equity", respectively; and the term "shareholder register" in paragraph (3) of that Article is deemed to be replaced with "register of preferred equity members".

Article 50(1)The provisions of Article 180 (excluding paragraph (2), item (iv) and paragraphs (3) and (4)) (Consolidation of Shares); Article 181 (Notices to Shareholders); Article 182, paragraph (1) (Effectuation); and Articles 182-2 through 182-6 (Keeping and Inspection of Documents related to the Consolidation of Shares; Request to Cease Consolidation of Shares; Dissenting Shareholders' Appraisal Rights; Determination of the Price of Shares; Keeping and Inspection of Documents related to Consolidation of Shares) of the Companies Act apply mutatis mutandis to consolidation of a specified purpose company's preferred equity. In such a case, the term "shareholders meeting" in Article 180, paragraph (2) of the Companies Act is deemed to be replaced with "general meeting of members"; the term "company with class shares" in item (iii) of that paragraph is deemed to be replaced with "specified purpose company issuing two or more classes of preferred equity"; the term "shareholders (or, for a company with class shares, the class shareholders for the classes of shares under paragraph (2), item (iii) of the preceding Article" in Article 181, paragraph (1) of that Act is deemed to be replaced with "preferred equity members (or, for a specified purpose company issuing two or more classes of preferred equity, the preferred equity members for the classes of preferred equity under paragraph (2), item (iii) of the preceding Article"; the term "registered pledgees of the shares" in that paragraph is deemed to be replaced with "registered pledgees of preferred equity"; the term "shareholders" in Article 182, paragraph (1) of that Act is deemed to be replaced with "preferred equity members"; the term "shares (or, for a company with class shares, shares of the classes provided for in Article 180, paragraph (2), item (iii)" in that Article is deemed to be replaced with "preferred equity (or, for a specified purpose company issuing two or more classes of preferred equity, preferred equity of the classes provided for in Article 180, paragraph (2), item (iii)"; the term "number" in that paragraph is deemed to be replaced with "number of units"; the phrase "shareholders meeting under Article 180, paragraph (2) (in cases where a resolution of a class meeting is required for consolidation of shares, including the class meeting; the same applies in Article 182-4, paragraph (2))" in Article 182-2, paragraph (1), item (i) of that Act is deemed to be replaced with "general meeting of members"; the term "Article 319, paragraph (1)" in that item is deemed to be replaced with "Article 63, paragraph (1) of the Asset Securitization Act"; the term "shareholders" in Article 182-2, paragraph (2) of that Act is deemed to be replaced with "preferred equity members"; the term "laws and regulations or the articles of incorporation" in Article 182-3 of that Act is deemed to be replaced with "laws and regulations, the asset securitization plan, or the articles of incorporation"; the term "shareholders" in that Article is deemed to be replaced with "preferred equity members"; the term "one share in the number" in Article 182-4, paragraph (1) of that Act is deemed to be replaced with "one unit in the number of units"; the term "dissenting shareholders" in that paragraph is deemed to be replaced with "dissenting preferred equity members"; the term "one share from" in that paragraph is deemed to be replaced with "one unit from"; the term "dissenting shareholders" in Article 182-4, paragraph (2) of that Act is deemed to be replaced with "dissenting preferred equity members"; the term "following shareholders" in that paragraph is deemed to be replaced with "following preferred equity members"; the term "shareholders meeting" in Article 182-4, paragraph (2), item (i) of that Act is deemed to be replaced with "general meeting of members"; the term "A shareholder who" in that item is deemed to be replaced with "A preferred equity member that"; the term "shareholders meeting" in Article 182-4, paragraph (2), item (ii) of that Act is deemed to be replaced with "general meeting of members"; the term "A shareholder who cannot" in that item is deemed to be replaced with "A preferred equity member that cannot"; the term "shareholders" in Article 182-4, paragraph (3) of that Act is deemed to be replaced with "preferred equity members"; the term "exercise of appraisal rights" in Article 182-4, paragraph (4) of that Act is deemed to be replaced with "demand for a preferred equity buy-out"; the term "the number of shares with regard to which the shareholder is exercising appraisal rights (or, for a company with class shares, the classes of the shares and the number of shares for each class)" in that paragraph is deemed to be replaced with "the number of units with regard to which the preferred equity member is demanding to be bought out of its preferred equity (or, for a specified purpose company issuing two or more classes of preferred equity, the classes of preferred equity and the number of units of preferred equity for each class)"; the term "exercise of appraisal rights" in Article 182-4, paragraph (5) of that Act is deemed to be replaced with "demand for a preferred equity buy-out"; the term "shareholders" in that paragraph is deemed to be replaced with "preferred equity members"; the term "exercise of appraisal rights" in Article 182-4, paragraph (6) of that Act is deemed to be replaced with "demand for a preferred equity buy-out"; the term "shareholder" in that paragraph is deemed to be replaced with "preferred equity member"; the term "exercise of appraisal rights" in Article 182-4, paragraph (7) of that Act is is deemed to be replaced with "demand for a preferred equity buy-out"; the term "exercise of appraisal rights" in Article 182-5, paragraph (1) of that Act is deemed to be replaced with "demand for a preferred equity buy-out"; the term "shareholder" in that paragraph is deemed to be replaced with "preferred equity member"; the term "shareholders" in Article 182-5, paragraph (2) of that Act is deemed to be replaced with "preferred equity member"; the term "shareholders" in Article 182-5, paragraph (3) of that Act is deemed to be replaced with "preferred equity members"; the term "exercise of appraisal rights" in that paragraph is deemed to be replaced with "demand for a preferred equity buy-out"; the term "shareholders" in Article 182-5, paragraph (5) of that Act is deemed to be replaced with "preferred equity members"; the term "exercise of appraisal rights" in Article 182-5, paragraphs (6) and (7) of that Act is deemed to be replaced with "demand for a preferred equity buy-out"; the phrase "issued shares at the time when consolidation of shares comes into effect (in cases of a company with class shares, the total number of the issued shares of the classes under Article 180, paragraph (2), item (iii))" in Article 182-6, paragraph (1) of that Act is deemed to be replaced with "issued preferred equity at the time when consolidation of preferred equity comes into effect (or, for a specified purpose company issuing two or more classes of preferred equity, the total number of units of issued preferred equity of the classes under Article 180, paragraph (2), item (iii))"; the term "number" in that paragraph is deemed to be replaced with "number of units"; the term "shareholders" in Article 182-6, paragraph (3) of that Act is deemed to be replaced with "preferred equity preferred equity members"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 219, paragraph (1) (but only the part that involves item (ii)), paragraph (2) (but only the part that involves item (i)), and paragraph (3) (Public Notice in Relation to Submission of Share Certificate) and Article 220 (Cases Where Share Certificates Cannot Be Submitted) of the Companies Act apply mutatis mutandis to submission of preferred equity securities in connection with the consolidation of a specified purpose company's preferred equity. In such a case, the phrase "in cases of performing the act set forth in item (iv)-2, the acquisition day prescribed in Article 179-2, paragraph (1), item (v); hereinafter the day is referred to as the 'share certificate submission day'" in Article 219, paragraph (1) of the Companies Act is deemed to be replaced with "hereinafter referred to in this Article as the 'preferred equity securities submission day'"; the term "before the share certificate submission day" in that paragraph is deemed to be replaced with "before the preferred equity securities submission day"; the term "shareholder" in that paragraph is deemed to be replaced with "preferred equity member"; the term "registered pledgee of shares" in that paragraph is deemed to be replaced with "registered pledgee of preferred equity"; the term "shares (or, for a company with class shares, the class shares under Article 180, paragraph (2), item (iii))" in item (ii) of that paragraph is deemed to be replaced with "preferred equity (or, for a specified purpose company issuing two or more classes of preferred equity, preferred equity of the classes under Article 180, paragraph (2), item (iii) as applied mutatis mutandis pursuant to Article 50, paragraph (1) of the Asset Securitization Act)"; the term "share certificate submission day" in Article 219, paragraph (2) of the Companies Act is deemed to be replaced with "preferred equity securities submission day"; the term "shareholders" in that paragraph is deemed to be replaced with "preferred equity members"; the term "acts listed in the items (i) through (iv) of the preceding paragraph" in item (i) of that paragraph is deemed to be replaced with "consolidation of preferred equity"; the term "share certificate submission day" in paragraph (3) of that Article is deemed to be replaced with "preferred equity securities submission day"; and Cabinet Order provides for any other necessary technical replacement of terms.

(3)The provisions of Article 234, paragraph (2) and Article 235, paragraph (1) (Treatment of Fractions); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 871 (Appending of the Reason); Article 874 (but only the part that involves item (iv)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the cancellation and consolidation of a specified purpose company's preferred equity, and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (2) (but only the part that involves item (ii)) (Hearing of Statements); Article 870-2 (Sending a Copy of the Written Petition); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (v)) (Immediate Appeal); Article 872-2 (Sending of a Copy of Petition for Appeal); the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to a demand under Article 182-4 (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1). In such a case, the term "the preceding paragraph" in Article 234, paragraph (2) of the Companies Act is deemed to be replaced with "Article 235, paragraph (1) as applied mutatis mutandis pursuant to Article 50, paragraph (3) of the Asset Securitization Act"; the term "one share in the number" in Article 235, paragraph (1) of Companies Act is deemed to be replaced with "one unit in the number of units"; the term "shareholders" in that paragraph is deemed to be replaced with "preferred equity members"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 51(1)In the provisions of this Section through Section 7, Section 10, and Section 11, the meanings of the terms set forth as follows are as prescribed in each respective item:

(2)At a general meeting of members, members may pass resolutions on the particulars prescribed in this Act, on the organization, operations, and administration of the specified purpose company, and on all particulars concerning the specified purpose company.

(3)A provision of the articles of incorporation is null and void if it provides that the directors or an administrative organ other than a general meeting of members may decide on a matter that, pursuant to the provisions of this Act, requires a resolution at a general meeting of members.

Article 52(1)Annual general meetings of members must be convened at a certain time after the end of each business year.

(2)A general meeting of members may be convened whenever necessary.

(3)A general meeting of members is convened by the directors, except for cases in which it is convened pursuant to the provisions of Article 297, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5) of the following Article.

Article 53(1)Specified equity members holding voting rights that account for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of all specified equity members' voting rights may demand that the directors convene a general meeting of members, indicating a matter that is the subject for a general meeting of members (but only one with respect to which those specified equity members are entitled to vote) and a reason for convocation.

(2)Other than in the case referred to in the preceding paragraph, for a general meeting of members with a matter subject to inclusive voting as its subject, preferred equity members holding voting rights that account for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of all preferred equity members' voting rights continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period) may demand that the directors convene a general meeting of members, indicating a matter that is the subject for a general meeting of members (but only one with respect to which those preferred equity members are entitled to vote) and a reason for convocation.

(3)Voting rights held by specified equity members that are not entitled to a vote with regard to a matter that is the subject of a general meeting of members as referred to in paragraph (1) are not included in the calculation of the number of all specified equity members' voting rights as referred to in paragraph (1); and voting rights held by preferred equity members that are not entitled to a vote with regard to a matter that is the subject of a general meeting of members as referred to in the preceding paragraph are not included in the calculation of the number of all preferred equity members' voting rights as referred to in the preceding paragraph.

(4)Notwithstanding the provisions of the preceding three paragraphs, the articles of incorporation may provide that it is not permissible to demand convocation of a general meeting of members for which the subject of the meeting is the appointment or dismissal of a director.

(5)The provisions of Article 297, paragraph (4) (Demand for Calling of Meeting by Shareholders); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 871 (Appending of the Reason); Article 874 (but only the part that involves item (iv)) (Restrictions of Appeal); Article 875 (Exclusion from the Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis if a member demands that a general meeting of members be convened pursuant to the provisions of paragraph (1) or paragraph (2). In such a case, the phrase "the shareholders who made the request pursuant to the provisions of paragraph (1)" in Article 297, paragraph (4) of that Act is deemed to be replaced with "the specified equity members making the demand pursuant to Article 53, paragraph (1) of the Asset Securitization Act or the preferred equity members making the demand pursuant to paragraph (2) of that Article" and the phrase "the request pursuant to the provisions of paragraph (1)" in Article 297, paragraph (4), items (i) and (ii) of the Companies Act is deemed to be replaced with "the demand under the provisions of Article 53, paragraph (1) or (2) of the Asset Securitization Act".

Article 54(1)In convening a general meeting of members, a director (or, if the members convene a general meeting of members pursuant to the provisions of Article 297, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5) of the preceding Article, those members; the same applies in the following Article and Article 56) must specify the following particulars:

(2)A preferred equity member not attending a general meeting of members may vote in writing on matters subject to inclusive voting.

(3)If there are two or more directors, the decision on the particulars set forth in the items of paragraph (1) must be made by a majority of the directors.

Article 55(1)To convene a general meeting of members of a Type I Specified Purpose Company or to convene a general meeting of members of a Type II Specified Purpose Company that has only matters subject to exclusive voting as the subject, the director must send a notice to each of the specified equity members (other than specified equity members not entitled to vote on all of the matters that may be resolved at the general meeting of members; hereinafter the same applies in this Article) by two weeks prior (or, in a case other than one in which the particulars set forth in Article 54, paragraph (1), item (iii) or (iv) have been specified, one week (or, if a shorter period is provided for in the articles of incorporation, that period)) prior to the day of the general meeting of members.

(2)If the particulars set forth in Article 54, paragraph (1), item (iii) or (iv) have been spcified, the notice referred to in the preceding paragraph must be given in writing.

(3)In lieu of sending a notice in writing as referred to in the preceding paragraph, a director, pursuant to the provisions of Cabinet Order and with the consent of the specified equity members, may send the notice by electronic or magnetic means. In such a case, the director is deemed to have sent the notice in writing as referred to in that paragraph.

(4)The particulars set forth in the items of Article 54, paragraph (1) must be entered or recorded in the notice referred to in the preceding two paragraphs.

(5)Notwithstanding the provisions of the preceding paragraphs, a general meeting of members as referred to in paragraph (1) may be held without following the procedures for convening such a meeting, with the consent of all of the specified equity members; provided, however, that this does not apply if the particulars set forth in Article 54, paragraph (1), item (iii) or (iv) have been specified.

(6)The provisions of Article 301 (Giving of Reference Documents for Shareholders Meeting and Voting Forms) of the Companies Act apply mutatis mutandis if the particulars set forth in Article 54, paragraph (1), item (iii) have been specified and the notice referred to in paragraph (1) is to be sent; and the provisions of Article 302 (Giving of Reference Documents for Shareholders Meeting and Voting Forms) of that Act apply mutatis mutandis if the particulars set forth in Article 54, paragraph (1), item (iv) have been specified and the notice referred to in paragraph (1) is to be sent. In such a case, the terms "shareholder", "reference documents for shareholders meeting", and "Article 299, paragraph (3)" in Article 301 and Article 302 of the Companies Act are deemed to be replaced with "specified equity members", "reference documents for a general meeting of members", and "Article 55, paragraph (3) of the Asset Securitization Act", respectively; and the term "the shareholders meeting" in Article 302, paragraph (4) of that Act is deemed to be replaced with "the general meeting of members".

Article 56(1)In convening a general meeting of members that includes a matter subject to inclusive voting as the subject of the meeting, the director must send a convocation notice of that meeting in writing to each member (excluding any member not entitled to vote on all of the matters that may be resolved at the general meeting of members; hereinafter the same applies in this Article) by two weeks prior to the day of the general meeting of members.

(2)The particulars set forth in the items of Article 54, paragraph (1) must be entered or recorded in the notice referred to in the preceding paragraph.

(3)The provisions of paragraph (3) of the preceding Article and Article 301 (Giving of Reference Documents for Shareholder Meeting and Voting Forms) of the Companies Act apply mutatis mutandis to the notice referred to in paragraph (1) and the provisions of Article 302 (Giving of Reference Documents for Shareholder Meeting and Voting Forms) of that Act apply mutatis mutandis if the particulars set forth in Article 54, paragraph (1), item (iv) are specified and the notice referred to in paragraph (1) is to be sent. In such a case, the term "the specified equity members" in paragraph (3) of the preceding Article is deemed to be replaced with "the members"; the terms "shareholder", "reference documents for shareholders meeting", and "Article 299, paragraph (3)" in Article 301 and Article 302 of the Companies Act are deemed to be replaced with "members", "reference documents for a general meeting of members", and "Article 55, paragraph (3) of the Asset Securitization Act as applied mutatis mutandis pursuant to Article 56, paragraph (3) of the Asset Securitization Act", respectively; and the term "shareholders meeting" in Article 302, paragraph (4) of the Companies Act is deemed to be replaced with "general meeting of members".

Article 57(1)A specified equity member or preferred equity member of a Type II Specified Purpose Company may demand that the director make a certain matter (but only a matter subject to inclusive voting (but only a matter with regard to which the preferred equity member is entitled to vote; the same applies in the following paragraph and paragraph (3))) the subject of a general meeting of members.

(2)A specified equity member or preferred equity member of a Type II Specified Purpose Company may submit a proposal at a general meeting of members with regard to a matter subject to inclusive voting that is the subject for a general meeting of members; provided, however, that this does not apply if the proposal violates a law or regulation, the asset securitization plan, or the articles of incorporation, or if three years have not elapsed since the date on which a proposal that was substantially the same as the proposal in question failed to obtain votes in favor constituting at least one-tenth (or, if a smaller proportion is provided for in the articles of incorporation, that proportion) of the votes of all members (other than members not entitled to vote on that proposal).

(3)A member may demand that the director notify the other members of the outline of the proposal that the member seeks to submit (or, if the notice referred to in Article 55, paragraph (2) or (3) is given (including as applied mutatis mutandis pursuant to paragraph (3) of the preceding Article), that the director enter or record the outline in that notice) with regard to a matter subject to inclusive voting that is the subject of a general meeting of members, by eight weeks (or, if a shorter period is provided for in the articles of incorporation, that period) prior to the day of the general meeting of members; provided, however, that this does not apply if the proposal violates a law or regulation, the asset securitization plan, or the articles of incorporation, or if three years have not elapsed since the date on which a proposal that was substantially the same as the proposal in question failed to obtain votes in favor constituting at least one-tenth (or, if a smaller proportion is provided for in the articles of incorporation, that proportion) of the votes of all members (other than members not entitled to vote on that proposal).

(4)The preceding three paragraphs must not be construed to preclude a specified equity member from requesting that a certain matter (but only a matter subject to exclusive voting) be made the subject of a meeting or from submitting a proposal with regard to that matter at a general meeting of members.

(5)The provisions of the preceding paragraphs do not preclude the articles of incorporation from providing otherwise with regard to a particular that involves the appointment or dismissal of directors.

Article 58(1)Prior to a general meeting of members, the specified purpose company, specified equity members holding at least one percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) of the voting rights of all the specified equity members (other than members not entitled to vote on all of the matters that may be resolved at a general meeting of members), or preferred equity members holding at least one percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) of the voting rights of all the preferred equity members (other than preferred equity members not entitled to vote on all of the matters that may be resolved at a general meeting of members) may file a petition with the court to appoint an inspector to investigate the procedures for convening the general meeting of members and the means of resolution.

(2)The provisions of Article 306, paragraphs (3) through (7) (Election of Inspector on Calling Procedures of Shareholders Meeting); Article 307 (Determination by the Court of the Calling of Shareholders Meeting); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (i)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal), Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis if the petition referred to in the preceding paragraph is filed. In such a case, the term "the stock company" in Article 306, paragraphs (4) and (7) of that Act is deemed to be replaced with "the specified purpose company"; the term "a shareholders meeting" in Article 307, paragraph (1), item (i) and Article 307, paragraphs (2) and (3) of that Act is deemed to be replaced with "a general meeting of members"; the term "the shareholders" in Article 307, paragraph (1), item (ii) of that Act is deemed to be replaced with "the members"; and Cabinet Order provides for any other necessary technical replacement of terms.

(3)If the petition referred to in the preceding paragraph has been filed with regard to a general meeting of members whose subject is a matter subject to inclusive voting, the general meeting of members referred to in Article 307, paragraphs (2) and (3) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph is deemed to be the general meeting of members whose subject is a matter subject to inclusive voting.

Article 59(1)At a general meeting of members, a specified equity member (other than a specified equity member that Cabinet Office Order prescribes as being related to the specified purpose company in a way that makes it possible for the specified purpose company to substantially control its operations, due to the specified purpose company's holding one-quarter or more of all shareholders' voting rights in the member or for any other grounds) is entitled to one vote per unit of specified equity it holds for matters subject to exclusive voting that are the subject of that meeting; and a member (other than a member that Cabinet Office Order prescribes as being related to the specified purpose company in a way that makes it possible for the specified purpose company to substantially control its operations, due to the specified purpose company's holding one-quarter or more of all shareholders' voting rights in the member or for any other grounds) is entitled to one vote per unit of specified equity or preferred equity it holds for matters subject to inclusive voting that are the subject of that meeting; provided, however, that the number of voting rights of specified equity members for matters subject to exclusive voting may be otherwise specified in the articles of incorporation.

(2)Notwithstanding the provisions of the preceding paragraph, a specified purpose company is not entitled to a vote in association with its specified equity (meaning specified equity in a specified purpose company that the specified purpose company holds in itself; the same applies hereinafter) or its preferred equity (meaning preferred equity in a specified purpose company that the specified purpose company holds in itself; the same applies hereinafter).

Article 60(1)Unless otherwise provided for in the articles of incorporation, a resolution at a general meeting of members on a matter subject to exclusive voting is adopted by the majority vote of the specified equity members attending the meeting, with the specified equity members in attendance holding the majority of the voting rights of all those that are entitled to vote.

(2)Unless otherwise provided for in the articles of incorporation, a resolution at a general meeting of members on a matter subject to inclusive voting is adopted by the majority vote of the members attending the meeting, with the members in attendance holding the majority of the voting rights of all those that are entitled to vote.

(3)Notwithstanding the provisions of the preceding two paragraphs, a resolution at any of the following general meetings of members must be adopted by at least a two-thirds majority vote (or, if a higher proportion is provided for in the articles of incorporation, that proportion) of the members attending the meeting, with the members in attendance holding the majority of the voting rights of all of the members entitled to vote at that general meeting of members. In such a case, in addition to the requirements for a resolution, the specified purpose company is not precluded from providing in the articles of incorporation that votes in favor are required from at least a certain number of members or from providing for any other requirements.

(4)Notwithstanding the provisions of the preceding three paragraphs, a resolution at any of the following general meetings of members must be adopted by at least half of all specified equity members (or, if a higher proportion is provided for in the articles of incorporation, that proportion), and by at least a three-quarters majority vote of all of the specified equity members (or, if a higher proportion is provided for in the articles of incorporation, that proportion):

Article 61The provisions of Article 311 of the Companies Act (Voting in Writing) apply mutatis mutandis to the exercise of voting rights in writing by the preferred equity member of a specified purpose company. In such a case, the term "the shareholders meeting" in Article 311, paragraph (3) of that Act is deemed to be replaced with "the general meeting of members".

Article 62(1)A specified purpose company may provide in its articles of incorporation that if a preferred equity member neither attends a general meeting of members nor exercises voting rights, the preferred equity member is deemed to have voted in favor of any proposal concerning a matter subject to inclusive voting that has been submitted at the general meeting of members (if multiple proposals are submitted and there are conflicting proposals among them, those conflicting proposals are excluded).

(2)A specified purpose company that has determined as prescribed in the preceding paragraph must enter or record the relevant provisions in the notice referred to in Article 56, paragraph (1).

(3)The votes of preferred equity members that are deemed to have voted in favor of a proposal based on provisions as under paragraph (1) are included in the number of votes of the preferred equity members attending the general meeting of members.

Article 63(1)If a director or a specified equity member makes a proposal on a matter subject to exclusive voting that is the subject of a general meeting of members, and all of the specified equity members (but only those entitled to exercise voting rights on that matter) manifest the intention to agree with the proposal by documents or electronic or magnetic records, a resolution approving that proposal is deemed to have been made at a general meeting of members.

(2)A specified purpose company must keep the documents or electronic or magnetic records referred to in the preceding paragraph for one year from the day on which the resolution at the general meeting of members is deemed to be have been made pursuant to the preceding paragraph.

(3)A specified equity member or preferred equity member may make the following requests at any time during the business hours of the specified purpose company:

(4)If a resolution is deemed to be made at an annual general meeting of members approving proposals on all of the subjects for the meeting, the annual general meeting of members is deemed to have been concluded at that time.

(5)The provisions of Article 320 (Omission of Reports to Shareholders Meetings) of the Companies Act apply mutatis mutandis to general meetings of members of a specified purpose company. In such a case, the term "shareholders" in that Article is deemed to be replaced with "members".

Article 64(1)If the details of a resolution at a general meeting of members violate the asset securitization plan, a member, director, company auditor, liquidator, specified bondholder, holder of a specified promissory note, or creditor from which specified borrowings have been borrowed may demand that the resolution be rescinded by filing an action within three months from the date of the resolution at the general meeting of members. The same applies to a person that is to become a director, company auditor, or liquidator (or that is to become a person holding the rights and obligations of a director, company auditor, or liquidator pursuant to Article 76, paragraph (1) (including as applied mutatis mutandis pursuant to Article 168, paragraph (5))) as a result of the rescission of that resolution.

(2)The provisions of Article 834 (but only the part that involves item (xvii)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Article 836, paragraphs (1) and (3) (Order to Provide Security); Article 837 (Mandatory Consolidation of Oral Arguments); Article 838 (Persons Affected by an Upholding Judgment); Article 846 (Liabilities for Damages in Cases Where the Plaintiff Is Defeated); and Article 937, paragraph (1) (but only the part that involves item (i), sub-item (g)-2) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action to rescind a resolution referred to in the preceding paragraph. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 65(1)The main text of Article 300 (Omission of Calling Procedures) of the Companies Act apply mutatis mutandis to a general meeting of members referred to in Article 56, paragraph (1) (other than a general meeting of members for voting on a resolution for changing the plan prescribed in Article 152, paragraph (1)) and the provisions of Article 310 (Proxy Voting), and Article 313, paragraphs (1) and (3) (Diverse Exercise of Votes) of the Companies Act apply mutatis mutandis to the exercise of voting rights by the members of a specified purpose company. In such a case, the term "shareholders" in Article 300 of that Act is deemed to be replaced with "members (other than members not entitled to vote on all of the matters that may be resolved at the general meeting of members)"; the term "shareholders meeting" in Article 310, paragraph (2) and paragraphs (5) through (7) of that Act is deemed to be replaced with "general meeting of members"; the term "Article 299, paragraph (3)" in Article 310, paragraph (4) of that Act is deemed to be replaced with "Article 55, paragraph (3) (including as applied mutatis mutandis pursuant to Article 56, paragraph (3) of the Asset Securitization Act) of the Asset Securitization Act"; the term "the shares" in Article 313, paragraph (3) of the Companies Act is deemed to be replaced with "the specified equity or preferred equity"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 311 (Voting in Writing) of the Companies Act apply mutatis mutandis to the general meetings of members of a specified purpose company that has specified the particulars set forth in Article 54, paragraph (1), item (iii); and the provisions of Article 312 (Voting by Electronic or Magnetic Means) of that Act apply mutatis mutandis to the general meetings of members of a specified purpose company that has specified the particulars set forth in Article 54, paragraph (1), item (iv). In such a case, the term "shareholders" in Article 311, paragraph (2) of that Act is deemed to be replaced with "specified equity members"; the term "shareholders" in Article 311, paragraph (4) and Article 312, paragraphs (2), (3), and (5) of that Act is deemed to be replaced with "members"; and the term "Article 299, paragraph (3)" in Article 312, paragraph (2) of that Act is deemend to be replaced with "Article 55, paragraph (3) of the Asset Securitization Act (including as applied mutatis mutandis pursuant to Article 56, paragraph (3) of the Asset Securitization Act) ".

(3)The provisions of Articles 314 through 317 (Accountability of Directors; Authority of Chairperson; Investigation of Material Submitted to the Shareholders Meeting; Resolution for Postponement or Adjournment) and Article 318, paragraphs (1) through (4) (Minutes) of the Companies Act apply mutatis mutandis to a specified purpose company's general meetings of members. In such a case, the term "by the shareholders" in Article 314 of that Act is deemed to be replaced with "by the members"; the term "Article 297" in Article 316, paragraph (2) of that Act is deemed to be replaced with "Article 53 of the Asset Securitization Act"; the term "Article 298 and Article 299" in Article 317 of the Companies Act is deemed to be replaced with "Articles 54 through Article 56 (other than Article 55, paragraph (5)) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

(4)The provisions of Article 830 (Action for Declaratory Judgment of Non-existence or Invalidation of a Resolution of a Shareholders Meeting); Article 831 (Action Seeking Revocation of a Resolution of a Shareholders Meeting); Article 834 (but only the part that involves item (xvi) and item (xvii)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Article 836, paragraphs (1) and (3) (Order to Provide Security); Article 837 (Mandatory Consolidation of Oral Arguments); Article 838 (Persons Affected by an Upholding Judgment); Article 846 (Liability for Damage in Cases Where the Plaintiff is Defeated); and Article 937 (1) (but only the part that involves item (i), sub-item (g), 2.) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action seeking a declaratory judgment establishing the non-existence or invalidity of a resolution at a general meeting of members of a specified purpose company or an action to rescind the resolution. In such a case, the phrases "a shareholder, etc. (or, in cases where the shareholders meeting, etc., referred to respectively in each such items is an organizational meeting or a class organizational meeting, a shareholder, etc., a shareholder at incorporation, a director at incorporation or a company auditor at incorporation" and "a shareholder (or, in cases where the resolution is the resolution of an organizational meeting, shareholders at incorporation) or director (or, in cases of a company with a supervisory committee, directors who are supervisory committee members or other directors; hereinafter the same applies in this paragraph), company auditor or liquidator (or, in cases where such resolution is a resolution of shareholders meeting or a class meeting, it includes a person who has the rights and obligations of a director, company auditor or liquidator pursuant to the provisions of Article 346, paragraph (1) (including as applied mutatis mutandis pursuant to Article 479, paragraph (4)), and in cases where such resolution is a resolution of an organizational meeting or organizational meeting of class shareholders, a director at incorporation (in cases where a stock company to be incorporated is a company with a supervisory committee, directors at incorporation who are supervisory committee members at incorporation or other directors at incorporation) or a company auditor at incorporation)" in Article 831, paragraph (1) of the Companies Act are deemed to be replaced with "members, directors, company auditors, or liquidators" and "member, director, company auditor, or liquidator (or a person holding the rights and obligations of a director, company auditor, or liquidator pursuant to the provisions of Article 76, paragraphs (1) of the Asset Securitization Act (including as applied mutatis mutandis pursuant to Article 168, paragraph (5) of the Asset Securitization Act))", respectively; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 66(1)If a Type II Specified Purpose Company amends its articles of incorporation and this is likely to cause detriment to preferred equity members, in addition to requiring a resolution under the provisions of Article 150, the amendment of the articles of incorporation does not become effective unless approved at a general meeting of those preferred equity members (or, if there are two or more classes of preferred equity held by preferred equity members that the amendment of the articles of incorporation is likely to cause detriment, at each separate general meeting whose constituent members are preferred equity members that hold one of those two or more classes of preferred equity); provided, however, that this does not apply if there are no preferred equity members that may exercise voting rights at the general meeting.

(2)The resolution for approval under the preceding paragraph must be adopted by at least a two-thirds majority vote of preferred equity members attending the meeting, with the preferred equity members in attendance holding a majority of the total number of units of issued preferred equity held by the preferred equity members that the amendment of the articles of incorporation referred to in that paragraph is likely to cause detriment (or, if resolutions are to be made at each separate general meeting whose constituent members are preferred equity members that hold one of two or more classes of preferred equity, the total number of units of issued preferred equity held by the preferred equity members that are the constituent members of the general meeting for each of those classes). In such a case, in addition to these requirements for a resolution, the specified purpose company is not precluded from providing in the articles of incorporation that votes in favor are required from at least a certain number of preferred equity members or from providing for any other requirements.

(3)The provisions on general meetings of members that have matters subject to inclusive voting as the subject apply mutatis mutandis to a general meeting referred to in paragraph (1).

(4)An outline of the proposal for amendment to the articles of incorporation prescribed in paragraph (1) must be entered or recorded in the notice of convocation of the general meeting referred to in that paragraph.

Article 67(1)A specified purpose company must have the following administrative organs; provided, however, that this does not apply to the administrative organ set forth in item (iii) if it is a specified purpose company that issues only specified bonds as asset-backed securities and the sum of the total amount of issuance of specified bond and the total amount of specified borrowings is less than the amount specified by Cabinet Order:

(2)A specified purpose company may employ an accounting advisor pursuant to the provisions of the articles of incorporation.

(3)The provisions of the proviso to paragraph (1) must not be construed as precluding the specified purpose company referred to in the proviso to that paragraph from having accounting auditors.

Article 68(1)Officers (meaning directors, accounting advisors, and company auditors; hereinafter the same applies in this Subsection (other than in Article 70, paragraph (1), items (vii) through (x) (including as applied mutatis mutandis pursuant to Article 72, paragraph (2)))) and accounting auditors are appointed by resolution at a general meeting of members.

(2)The provisions of Article 329, paragraph (3) (Election) of the Companies Act apply mutatis mutandis to the resolution referred to in the preceding paragraph.

Article 69The relationship between a specified purpose company and its officers and accounting auditors is governed by the provisions on mandates.

Article 70(1)The following persons may not become a director:

(2)The main text of Article 331, paragraph (2) (Qualifications of Directors) of the Companies Act apply mutatis mutandis to the director of a specified purpose company. In such a case, the term "shareholders" in the main text of that Article is deemed to be replaced with "members".

Article 71(1)An accounting advisor must be a certified public accountant (or a foreign certified public accountant prescribed in Article 16-2, paragraph (5) of the Certified Public Accountants Act (Act No. 103 of 1948); hereinafter the same applies), audit corporation, certified tax accountant, or tax accountant corporation.

(2)The provisions of Article 333, paragraphs (2) and (3) (Qualifications of Accounting Advisors) of the Companies Act apply mutatis mutandis to the accounting advisors of a specified purpose company. In such a case, the term "a stock company or its subsidiary" in Article 333, paragraph (3), item (i) of that Act is deemed to be replaced with "a specified purpose company", and Cabinet Order provides for any other necessary technical replacement of terms.

Article 72(1)A company auditor may not concurrently act as the director or employee of a specified purpose company.

(2)The provisions of Article 70 apply mutatis mutandis to company auditors.

Article 73(1)An accounting auditor must be a certified public accountant or an audit corporation.

(2)An audit corporation appointed as accounting auditor must select a person to act as accounting auditor from among its members and notify the specified purpose company of this. In such a case, the person referred to in item (ii) of the following paragraph may not be selected.

(3)The following persons may not become an accounting auditor:

(4)The provisions of Article 338 (Accounting Auditors' Terms of Office) of the Companies Act apply mutatis mutandis to the accounting auditors of a specified purpose company. In such a case, the term "annual shareholders meeting" in Article 338, paragraphs (1) and (2) of that Act is deemed to be replaced with "annual general meeting of members".

Article 74(1)An officer or accounting auditor may be dismissed at any time through a resolution at a general meeting of members.

(2)Unless there are legitimate grounds for a person's dismissal, a person dismissed pursuant to the preceding paragraph may demand the specified purpose company to compensate for damage arising from the dismissal.

(3)If, notwithstanding the presence of misconduct or a material fact in violation of laws and regulations, the asset securitization plan, or the articles of incorporation in the performance of an officer's duties, the proposal to dismiss the officer is rejected at a general meeting of members, the following members may file an action within thirty days from the date of that general meeting of members demanding the dismissal of the officer:

(4)The provisions of Article 855 (Defendant), Article 856 (Jurisdiction over an Action), and Article 937, paragraph (1) (but only the part that involves item (i), sub-item (j)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action to dismiss an officer referred to in the preceding paragraph. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 75(1)A company auditor may dismiss an accounting auditor if that accounting auditor falls under any of the following items:

(2)If there are two or more company auditors, a dismissal under the preceding paragraph must be effected by a unanimous consent of the company auditors.

(3)If an accounting auditor is dismissed pursuant to the provisions of paragraph (1), a company auditor (if the company has two or more company auditors, a company auditor appointed from among themselves) must report this and give the reason for the dismissal at the first general meeting of members convened after the dismissal.

Article 76(1)If there is a position vacancy among the officers or a shortfall in the number of officers prescribed by this Act or the articles of incorporation, an officer that has left office due to the expiration of that officer's term of office or due to resignation continues to have the rights and duties of an officer until a newly appointed officer (or a person that will temporarily perform the duties of an officer as prescribed in the following paragraph) takes office.

(2)In the case referred to in the preceding paragraph, the court may appoint a person who is to temporarily perform the duties of an officer at the petition of an interested party, if it finds this to be necessary.

(3)If the court appoints a person who is to temporarily perform the duties of an officer as prescribed in the preceding paragraph, it may fix the amount of remuneration that the specified purpose company is to pay to that person.

(4)If there is a position vacancy among the accounting auditors or a shortfall in the number of accounting auditors prescribed by the articles of incorporation, unless a new accounting auditor is appointed without delay, a company auditor must appoint a person who is to temporarily perform the duties of accounting auditor.

(5)The provisions of Article 73, paragraphs (1) through (3) and the preceding Article apply mutatis mutandis to a person who is to temporarily perform the duties of accounting auditor as prescribed in the preceding paragraph.

(6)The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (i)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); Article 876 (Supreme Court Rule); and Article 937, paragraph (1) (but only the part that involves item (ii), sub-items (a) and (c)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis if a petition prescribed in paragraph (2) has been filed.

Article 77(1)The provisions of Article 341 (Resolution at Shareholders Meeting for Election and Dismissal of Officers) of the Companies Act apply mutatis mutandis to a resolution on the appointment of a director. In such a case, the terms "Article 309, paragraph (1)", "the meeting", and "shareholder" in that Article are deemed to be replaced with "Article 60, paragraph (1) of the Asset Securitization Act", "the general meeting of members", and "members", respectively.

(2)The provisions of Article 342 (Election of Directors by Cumulative Vote) of the Companies Act apply mutatis mutandis if the members appoint the director of a specified purpose company, and Article 344, paragraphs (1) and (2) (Determination of Content of Proposal on the Election of Accounting Auditors) of that Act apply mutatis mutandis to a specified purpose company. In such a case, the term "shareholders meeting" in those provisions is deemed to be replaced with "general meeting of members"; and the terms "Article 308, paragraph (1)" and "for each one share the shareholder holds (or, in cases where the share units are provided for in the articles of incorporation, for each one unit of the shares the shareholder holds)" in Article 342, paragraph (3) of that Act are deemed to be replaced with "Article 59, paragraph (1) of the Asset Securitization Act" and "for each one unit of specified equity or preferred equity", respectively.

(3)The provisions of Article 345 (Statement of Opinions on Election of Accounting Advisors) of the Companies Act apply mutatis mutandis to a specified purpose company. In such a case, the term "the shareholders meeting" in that Article is deemed to be replaced with "the general meeting of members"; the term "Article 298, paragraph (1), item (i)" in Article 345, paragraph (3) of that Act is deemed to be replaced with "Article 54, paragraph (1), item (i) of the Asset Securitization Act"; and the term "Article 340, paragraph (1)" in Article 345, paragraph (5) of the Companies Act is deemed to be replaced with "Article 75, paragraph (1) of the Asset Securitization Act".

Article 78(1)Unless otherwise provided for in the articles of incorporation, a director engages in the execution of business of the specified purpose company.

(2)Unless otherwise provided for in the articles of incorporation, if there are two or more directors, the business of a specified purpose company is decided by the majority of the directors.

Article 79(1)A director represents a specified purpose company; provided, however, that this does not apply if other representative director or other person is designated to represent the specified purpose company.

(2)If there are two or more directors referred to in the main text of the preceding paragraph, each director represents the specified purpose company.

(3)A specified purpose company may designate a representative director from among the directors pursuant to the articles of incorporation, through appointment by the directors from among themselves pursuant to the provisions of the articles of incorporation, or through a resolution at a general meeting of members.

(4)The provisions of Article 349, paragraphs (4) and (5) (Representatives of Companies) of the Companies Act apply mutatis mutandis to the representative director of a specified purpose company, and the provisions of Article 350 (Liability for Damages Caused by Acts of Directors) of that Act apply mutatis mutandis to a specified purpose company.

Article 80(1)In the following cases, a director must disclose the material facts of the transactions at a general meeting of members and obtain approval for the transactions:

(2)The provisions of Article 108 (Self-Contracting and Representation of Both Parties) of the Civil Code (Act No. 89 of 1896) do not apply to transactions referred to in item (ii) or (iii) of the preceding paragraph that have obtained the approval referred to in that paragraph.

Article 81(1)If there are sufficient grounds to suspect presence of misconduct or a material fact that constitutes a violation of laws and regulations, the asset securitization plan, or the articles of incorporation in connection with the execution of business of a specified purpose company, any of the following members may file a petition with the court to appoint an inspector in order to have that inspector investigate the status of business and assets of the specified purpose company:

(2)The provisions of Article 358, paragraph (2), paragraph (3), and paragraphs (5) through (7) (Election of Inspector of Execution of Business); Article 359 (Decision by Court to Call Shareholders Meeting); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (i)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rule) of the Companies Act apply mutatis mutandis to an inspector in the case the petition referred to in the preceding paragraph has been filed and when that inspector makes a report. In such a case, the term "the stock company" in Article 358, paragraphs (3) and (7) of the Companies Act is deemed to be replaced with "the specified purpose company"; the term "the shareholders" in Article 358, paragraph (7) of that Act is deemed to be replaced with "members"; the term "shareholders meeting" in Article 359, paragraph (1), item (i), paragraphs (2) and (3) of that Act is deemed to be replaced with "general meeting of members"; the term "shareholders" in Article 359, paragraph (1), item (ii) of that Act is deemed to be replaced with "members"; and Cabinet Order provides for any other necessary technical replacement of terms.

(3)For a Type II Specified Purpose Company, the general meeting of members prescribed in Article 359 of the Companies Act as applied mutatis mutandis following the deemed replacement of terms pursuant to the preceding paragraph is deemed to be a general meeting of members whose subject is a matter subject to inclusive voting.

Article 82If a director is engaging, or is likely to engage, in an act that violates a law or regulation or the asset securitization plan, a member, specified bondholder, holder of a specified promissory note, or creditor from which specified borrowings have been borrowed may demand that the director cease engaging in that act.

Article 83If a director is engaging, or is likely to engage, in an act outside the scope of the purpose of the specified purpose company or in an act that violates the articles of incorporation, and that act is likely to cause substantial detriment to the specified purpose company, a specified equity member or a preferred equity member that has held preferred equity continuously for the preceding six months may demand that the director to cease engaging in that act.

Article 84(1)The following particulars concerning a director's remuneration and bonuses and other financial benefits that a director receives from a specified purpose company as consideration for performing their duties (hereinafter referred to as "remuneration, etc." in this Section) are determined by resolution at a general meeting of members if those particulars are not provided for in the articles of incorporation:

(2)The provisions of Article 361, paragraph (4) (Remuneration for Directors) of the Companies Act apply mutatis mutandis to the resolution referred to in the preceding paragraph. In such a case, the terms "paragraph (1), item (ii) of " and "shareholders meeting" in paragraph (4) of that Article are deemed to be replaced with "Article 84, paragraph (1), item (ii) of the Asset Securitization Act" and "general meeting of members", respectively.

Article 85The provisions of Article 351 (Measures When a Vacancy Arises in an Office of a Representative Director); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (i)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); Article 876 (Supreme Court Rule); and Article 937, paragraph (1) (but only the part that involves item (ii), sub-items (a) and (c)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to the representative director of a specified purpose company; the provisions of Article 352 (Authority of Persons Who Perform Duties on Behalf of Directors); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (i)) (Hearing of Statements); Article 871 (Appending of the Reason), Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rule) of that Act apply mutatis mutandis to an acting representative for a specified purpose company; the provisions of Article 354 (Apparent Representative Directors) of that Act apply mutatis mutandis to a specified purpose company; and the provisions of Article 355 (Duty of Loyalty) and Article 357, paragraph (1) (Director's Duty to Report) of that Act apply mutatis mutandis to the director of a specified purpose company. In such a case, the terms "laws and regulations, the articles of incorporation" and "shareholders meeting" in Article 355 of that Act are deemed to be replaced with "laws and regulations, the asset securitization plan, the articles of incorporation" and "general meeting of members", respectively; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 86(1)An accounting advisor, together with the directors, must prepare financial statements (meaning the financial statements prescribed in Article 102, paragraph (2); hereinafter the same applies in this Section) and their annexed detailed statements. In doing so, the accounting advisor must prepare an accounting advisor's report pursuant to Cabinet Office Order provisions.

(2)The provisions of Article 374, paragraphs (2), (3), and (5) (Authority of Accounting Advisors); Article 375, paragraph (1) (Accounting Advisor's Duty to Report); Article 377, paragraph (1) (Statement of Opinions at Shareholders Meeting); and Article 378, paragraph (1) (but only the part that involves item (i)) and paragraph (2) (Keeping and Inspection of Financial Statements by Accounting Advisors) of the Companies Act apply mutatis mutandis to a company with accounting advisors. In such a case, the term "may request reports on accounting from a subsidiary of the company with accounting advisors, or investigate the status of the operations and financial status of the company with accounting advisors or of its subsidiary" in Article 374, paragraph (3) of that Act is deemed to be replaced with "may investigate the operational and financial status of the company with accounting advisors"; the term "item (ii) or item (iii) of Article 333, paragraph (3)" in paragraph (5) of that Article is deemed to be replaced with "Article 333, paragraph (3), item (ii) or (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 71, paragraph (2) of the Asset Securitization Act"; the term "laws and regulations or the articles of incorporation" in Article 375, paragraph (1) of the Companies Act is deemed to be replaced with "laws and regulations, the asset securitization plan, or the articles of incorporation"; the terms "Article 374, paragraph (1)" and "the shareholders meeting" in Article 377, paragraph (1) of the Companies Act are deemed to be replaced with "Article 86, paragraph (1) of the Asset Securitization Act" and "the general meeting of members", respectively; the term "the annual shareholders meeting" in Article 378, paragraph (1), item (i) of the Companies Act is deemed to be replaced with "the annual general meeting of members"; the term "shareholders" in Article 378, paragraph (2) of that Act is deemed to be replaced with "members"; and Cabinet Order provides for any other necessary technical replacement of terms.

(3)The provisions of Article 379 (Remunerations for Accounting Advisors) and Article 380 (Requests for Indemnification of Expenses) of the Companies Act apply mutatis mutandis to the accounting advisors of a specified purpose company. In such a case, the term "shareholders meeting" in Article 379 of that Act is deemed to be replaced with "general meeting of members"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 87(1)Company auditors audit directors' performance of their duties (or, at a company with accounting advisors, the directors' and accounting advisors' performance of their duties). In doing so, the company auditors must prepare audit reports pursuant to Cabinet Office Order provisions.

(2)Company auditors may request reports on business from the directors and accounting advisors as well as the employees, may investigate a specified purpose company's status of business and assets, and may state an opinion to the directors at any time.

Article 88(1)If a company auditor finds that a director is engaging in, or is likely to engage in, misconduct; finds there to be a fact that constitutes a violation of laws and regulations, the asset securitization plan, or the articles of incorporation; or finds there to be a fact that constitutes a gross impropriety, the company auditor must report this without delay to the directors other than the director in question (hereinafter referred to as the "delinquent director" in this paragraph and paragraph (4)), if any; or report this at a general meeting of members (but only one composed of specified equity members) if there are no directors other than the delinquent director.

(2)On finding it to be necessary to do so in a case as prescribed in the preceding paragraph, a company auditor may request that a director convene a general meeting of members.

(3)If the request referred to in the preceding paragraph has been made, but a notice of convocation is not issued within one week from the date of the request setting a date within two weeks of the date of the request as the day for the general meeting of members, the company auditor that made the request may convene a general meeting of members.

(4)A company auditor may submit a proposal to dismiss a delinquent director at a general meeting of members.

Article 89(1)Remuneration, etc. of company auditors is to be determined by resolution at a general meeting of members, if their amounts are not provided for in the articles of incorporation.

(2)The provisions of Article 387, paragraphs (2) and (3) (Remunerations for Company Auditors) of the Companies Act apply mutatis mutandis to remuneration, etc. of the company auditor of a specified purpose company. In such a case, the term "shareholders meeting" in that Article is deemed to be replaced with "general meeting of members" and the term "the preceding paragraph" in Article 387, paragraph (2) of that Act is deemed to be replaced with "Article 89, paragraph (1) of the Asset Securitization Act".

Article 90The provisions of Article 384 (Duty to Report to Shareholders Meeting); Article 385 (Enjoinment of Acts of Directors by Company Auditors); Article 386, paragraph (1) (but only the part that involves item (i)) and paragraph (2) (but only the part that involves items (i) and (ii)) (Representation of Company in Actions between Company with Auditors and Directors); and Article 388 (Requests for Indemnification of Expenses) of the Companies Act apply mutatis mutandis to the company auditor of a specified purpose company. In such a case, the term "shareholders meeting" in Article 384 of that Act is deemed to be replaced with "general meeting of members"; the term "laws and regulations or the articles of incorporation" in Article 384 and Article 385, paragraph (1) of that Act is deemed to be replaced with "laws and regulations, the asset securitization plan, or the articles of incorporation"; the terms "Article 349, paragraph (4), Article 353 and Article 364" in Article 386, paragraph (1) of that Act and "Article 349, paragraph (4)" in Article 386, paragraph (2) of that Act are deemed to be replaced with "Article 349, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to Article 79, paragraph (4) of the Asset Securitization Act"; the phrase "Article 847, paragraph (1), Article 847-2, paragraph (1) or (3) (including as applied mutatis mutandis pursuant to paragraphs (4) and (5) of that Article), or Article 847-3, paragraph (1)" in Article 386, paragraph (2), item (i) of the Companies Act is deemed to be replaced with "Article 97, paragraph (1) of the Asset Securitization Act or Article 847, paragraph (1) as applied mutatis mutandis pursuant to Article 25, paragraph (4), Article 36, paragraph (10), or Article 119, paragraph (2) of the Asset Securitization Act"; and the terms "Article 849, paragraph (4)" and "Article 850, paragraph (2)" in Article 386, paragraph (2), item (ii) of the Companies Act are deemed to be replaced with " Article 849, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to Article 25, paragraph (4), Article 36, paragraph (10), Article 97, paragraph (2), or Article 119, paragraph (2) of the Asset Securitization Act" and "Article 850, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to Article 25, paragraph (4), Article 36, paragraph (10), Article 97, paragraph (2), or Article 119, paragraph (2) of the Asset Securitization Act", respectively.

Article 91(1)An accounting auditor audits the financial statements of a specified purpose company and their annexed detailed statements pursuant to the provisions of Subsection 3 of the following Section. In doing so, the accounting auditor must prepare financial audit reports pursuant to Cabinet Office Order provisions.

(2)An accounting auditor may inspect and copy the following things or request reports on accounting from directors, accounting advisors, and employees, at any time:

(3)If it is necessary to do so in order for an accounting auditor to carry out their duties, an accounting auditor may investigate the status of business and assets of the specified purpose company.

(4)An accounting auditor must not employ a person falling under one of the following items in carrying out their duties:

Article 92(1)If an accounting auditor, in the course of carrying out duties, discovers the presence of misconduct or a material fact in connection to violation of laws and regulations, the asset securitization plan, or the articles of incorporation in the performance of a director's duties, the accounting auditor must report this to the company auditor without delay.

(2)If it is necessary for a company auditor to do so in order to carry out their duties, the company auditor may ask the accounting auditor to report on their audit.

Article 93The provisions of Article 398, paragraphs (1) and (2) (Statement of Opinions at Annual Shareholders Meeting) of the Companies Act apply mutatis mutandis to the accounting auditors of a specified purpose company; and the provisions of Article 399, paragraph (1) (Involvement of Company Auditors in Decision on Remuneration for Accounting Auditors) of that Act apply mutatis mutandis to the accounting auditors and the persons who are to temporarily act as the accounting auditors of a specified purpose company. In such a case, the terms "Article 396, paragraph (1)" and "laws and regulations or the articles of incorporation" in Article 398, paragraph (1) of that Act are deemed to be replaced with "Article 91, paragraph (1) of the Asset Securitization Act" and "laws and regulations, the asset securitization plan, or the articles of incorporation", respectively; and the term "annual shareholders meeting" in Article 398, paragraphs (1) and (2) of the Companies Act is deemed to be replaced with "annual general meeting of members".

Article 94(1)If a director, an accounting advisor, a company auditor, or an accounting auditor (hereinafter referred to as an "officer, etc." in this Subsection) neglects their duties, the officer, etc. is liable to compensate the specified purpose company for damage resulting from this.

(2)If a director engages in the transactions referred to in Article 80, paragraph (1), item (i) in violation of Article 80, paragraph (1), the amount of the profit gained by the director or a third party as a result of the transactions is presumed to be the amount of the damage referred to in the preceding paragraph.

(3)If a specified purpose company incurs damage as a result of the transactions referred to in Article 80, paragraph (1), item (ii) or (iii), the following directors are presumed to have neglected their duties:

(4)Exemptions from the liability referred to in paragraph (1) may not be granted without the consent of all members.

(5)Even if a director's neglect of duties is due to grounds not attributable to the director, this may not be used to exempt the director that has engaged in the transactions referred to in Article 80, paragraph (1), item (ii) (but only transactions engaged in for a personal benefit) from the liability referred to in paragraph (1).

Article 95(1)If an officer, etc. has acted in bad faith or with gross negligence in carrying out their duties, the officer, etc. is liable to compensate third parties for damage resulting from this.

(2)The provisions of the preceding paragraph also apply if a person as set forth in one of the following items performs an act that the item prescribes; provided, however, that this does not apply if the person proves that they did not neglect to exercise due care in performing the act:

Article 96If an officer, etc. is liable to compensate a specified purpose company or a third party for damages incurred by them, and another officer, etc. is also liable for the damages, those persons are joint and several obligors.

Article 97(1)A specified equity member or preferred equity member that has held preferred equity continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period) may request that the specified purpose company file an action to enforce the liability of an officer, etc. (hereinafter referred to as an "action to enforce liability" in this Article) in writing or by any other means that Cabinet Office Order prescribes; provided, however, that this does not apply to actions to enforce liability filed to seek unlawful benefits of the member or a third party or to inflict damage on the specified purpose company.

(2)The provisions of Article 847, paragraphs (3) through (5) (Action to Enforce Liability by Shareholders); Article 847-4 (Court Costs for an Action to Enforce Liability); and Articles 848 through 853 (excluding Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Jurisdiction of an Action, Intervention, Settlement, Claim for Costs, Action for Retrial) of the Companies Act apply mutatis mutandis to actions to enforce liability filed by a specified purpose company. In such a case, the term "shareholder" in Article 847, paragraph (3) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "that specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849, paragraph (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the phrase "give public notice to that effect or give notice thereof to its shareholders" in paragraph (5) of that Article is deemed to be replaced with "notify its specified equity members of this, and in the case of a Type II Specified Purpose Company, issue public notice of this or notify its preferred equity members of this"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

(3)In order for a specified purpose company to participate in litigation in an action to enforce liability in order to assist a director, a liquidator, or a person formerly in those positions, the specified purpose company must obtain the consent of all of the specified equity members.

Article 98The accounting of a specified purpose company is to be subject to business accounting practices that are generally accepted as fair and appropriate.

Article 99(1)A specified purpose company must prepare accurate accounting books in a timely manner, pursuant to Cabinet Office Order provisions.

(2)A specified purpose company must preserve its accounting books and significant materials concerning its business for ten years from the time of closing the accounting books.

Article 100(1)A specified equity member holding voting rights that account for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the voting rights of all specified equity members (other than specified equity members not entitled to vote on all of the matters that may be resolved at a general meeting of members), a preferred equity member holding voting rights that account for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the voting rights of all preferred equity members (other than preferred equity members not entitled to vote on all of the matters that may be resolved at a general meeting of members), a specified equity member holding a number of units of specified equity that accounts for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the total number of units of specified equity (other than the company's own specified equity), or a preferred equity member holding a number of units of preferred equity that accounts for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the issued preferred equity (other than the company's own preferred equity) may make the following requests at any time during the business hours of the specified purpose company. In such a case, the member must disclose the reason for the request:

(2)The provisions of Article 433, paragraph (2) (Request to Inspect Account Books) of the Companies Act apply mutatis mutandis to a specified purpose company. In such a case, the term "shareholder" in Article 433, paragraph (2), items (i) and (ii) of that Act is deemed to be replaced with "member".

Article 101The court may order the parties to an action to submit their accounting books in whole or in part, upon petition or by its own authority.

Article 102(1)A specified purpose company must prepare a balance sheet as of the date of its establishment, pursuant to Cabinet Office Order provisions.

(2)Pursuant to Cabinet Office Order provisions, a specified purpose company must prepare financial statements (meaning balance sheets, profit and loss statements, and statements that Cabinet Office Order prescribes as being necessary and appropriate for showing the state of the specified purpose company's assets and its profits and losses; hereinafter the same applies in this Subsection, Article 111, paragraph (2), item (ii) and Article 118) and a business report for each business year, a proposal on the appropriation of profits or handling of losses (hereinafter referred to as a "profit appropriation proposal" in this Subsection), and their annexed detailed statements.

(3)Financial statements, business reports, profit appropriation proposals, and their annexed detailed statements may be prepared as electronic or magnetic records.

(4)A specified purpose company must preserve its financial statements and their annexed detailed statements for ten years from the date on which the financial statements were prepared.

(5)At a company with accounting auditors, the documents set forth in the following items must be audited by the person that the item prescribes, pursuant to Cabinet Office Order provisions:

(6)A specified purpose company that is not a company with accounting auditors must have the financial statements and business report referred to in paragraph (2) and their annexed detailed statements audited by the company auditors pursuant to Cabinet Office Order provisions.

Article 103(1)When issuing a notice of convocation for an annual general meeting of members, the director of a company with accounting auditors must provide the members with the financial statements, business report, and the the profit appropriation proposal which have been audited as referred to in paragraph (5) of the preceding Article, as well as the audit report and the financial audit report, pursuant to Cabinet Office Order provisions; provided, however, that this does not apply to a notice of convocation that is sent pursuant to the provisions of Article 56, paragraph (1) to persons not entitled to vote on the approval referred to in paragraph (2) of the following Article.

(2)The provisions of the main text of the preceding paragraph apply mutatis mutandis to a specified purpose company that is not a company with accounting auditors. In such a case, the terms "paragraph (5) of the preceding Article" and "as well as the audit report and the financial audit report" in the main text of the preceding paragraph are deemed to be replaced with "paragraph (6) of the preceding Article" and "as well as the audit report", respectively.

Article 104(1)The director must submit or provide the financial statements, the business report, and the profit appropriation proposal that have been audited as referred to in Article 102, paragraph (5) or (6) at the annual general meeting of members.

(2)The financial statements and profit appropriation proposal submitted or provided pursuant to the provisions of the preceding paragraph must be approved by resolution at an annual general meeting of members.

(3)The director must report the details of the business reports submitted or provided pursuant to the provisions of paragraph (1) at the annual general meeting of members.

(4)For a company with accounting auditors, if the financial statements audited pursuant to Article 102, paragraph (5) satisfy the requirements that Cabinet Office Order prescribes as accurately indicating the state of a specified purpose company's assets, and its profits and losses in compliance with laws and regulations, the asset securitization plan, and the articles of incorporation, the provisions of paragraph (2) do not apply to those financial statements. In such a case, the director must report the details of the financial statements at the annual general meeting of members.

(5)A specified purpose company must issue public notice of the balance sheet and profit and loss statement (for a specified purpose company that is not a company with accounting auditors, the balance sheet) without delay after the conclusion of the annual general meeting of members, pursuant to Cabinet Office Order provisions.

(6)Notwithstanding the provisions of the preceding paragraph, it is sufficient for a specified purpose company whose means of public notice is the means referred to in Article 194, paragraph (1), item (i) or (ii) to issue public notice of a summary of the balance sheet and profit and loss statement prescribed in the preceding paragraph.

(7)A specified purpose company referred to in the preceding paragraph may, without delay after the conclusion of the annual general meeting of members, take measures to put the information contained in the balance sheet and profit and loss statement referred to in paragraph (5) into a format that enables many and unspecified persons to have continuous access to the information through electronic or magnetic means until the day on which five years have elapsed from the day of conclusion of the annual general meeting of members, pursuant to Cabinet Office Order provisions. In such a case, the provisions of the preceding two paragraphs do not apply.

(8)The provisions of the preceding three paragraphs do not apply to a specified purpose company that must submit an annual securities report to the Prime Minister pursuant to the provisions of Article 24, paragraph (5) of the Financial Instruments and Exchange Act.

Article 105(1)A company with accounting auditors must keep the financial statements, business report, profit appropriation proposal, and their annexed detailed statements for each business year (including the audit report and financial audit report; these documents are referred to as "financial statements and associated documents" in the following paragraph), at its head office for five years, beginning on the day one week prior to the date of the annual general meeting of members (in the case referred to in Article 63, paragraph (1), the date on which the proposal referred to in Article 63, paragraph (1) was made).

(2)A company with accounting auditors must keep a copy of the financial statements and associated documents at its branch offices for three years, beginning on the day one week prior to the date of the annual general meeting of members (in the case referred to in Article 63, paragraph (1), the date on which the proposal referred to in Article 63, paragraph (1) was made); provided, however, that this does not apply if the financial statements and associated documents have been prepared as electronic or magnetic records and the company has taken the measures specified by Cabinet Office Order to enable its branch offices to respond to the requests set forth in Article 442, paragraph (3), items (iii) and (iv) of the Companies Act as applied mutatis mutandis pursuant to paragraph (4).

(3)The preceding two paragraphs apply mutatis mutandis to the financial statements, business reports, profit appropriation proposals, annexed detailed statements, and audit reports of a specified purpose company that is not a company with accounting auditors. In such a case, the term "the audit report and financial audit report" in paragraph (1) is deemed to be replaced with "the audit report".

(4)The provisions of Article 442, paragraph (3) (Keeping and Inspection of Financial Statements) of the Companies Act apply mutatis mutandis to the members and creditors of a specified purpose company.

Article 106The court may order the parties to an action to submit their financial statements and their annexed detailed statements in whole or in part, upon petition or by its own authority.

Article 107The amount of stated capital of a specified purpose company is the amount of specified capital, or, if the asset securitization plan provides for the issuance of preferred equity, the sum total of the amount of specified capital and the amount of preferred capital.

Article 108(1)A specified purpose company may reduce the amount of specified capital by amending the articles of incorporation only for the purpose of compensating for losses.

(2)In amending the articles of incorporation pursuant to the provisions of the preceding paragraph, the following information must be fixed by resolution at a general meeting of members referred to in Article 150:

(3)The amount referred to in item (i) of the preceding paragraph may not exceed the amount of specified capital on the date referred to in item (ii) of that paragraph.

(4)The amount referred to in paragraph (2), item (i) may not exceed the amount calculated by the method that Cabinet Office Order prescribes as the amount of losses.

Article 109(1)In addition to the case as under the following Article and as approved at a general meeting of members referred to in Article 159, paragraph (1), a specified purpose company may reduce the amount of preferred capital by resolution at a general meeting of members.

(2)The following information must be fixed by the resolution referred to in the preceding paragraph. In such a case, the sum total of the amounts prescribed in item (iii) and item (iv) must not exceed the amount referred to in item (i):

(3)The amount referred to in item (i) of the preceding paragraph must not exceed the amount of preferred capital on the day prescribed in item (ii) of that paragraph.

(4)In a case prescribed in paragraph (2), item (iv), the amount referred to in item (i) of that paragraph may not exceed the amount calculated by the method that Cabinet Office Order prescribes as the amount of losses.

(5)The provisions of Article 39, paragraph (3) apply mutatis mutandis to the resolution referred to in paragraph (1).

(6)The provisions of paragraph (1) do not preclude the asset securitization plan from providing that the amount of preferred capital may not be reduced.

Article 110(1)A specified purpose company may reduce the amount of preferred capital at the decision of the director (or, if there are two or more directors, at the decision of the majority of directors; hereinafter the same applies in this Article), but only if the asset securitization plan provides for the following particulars. In such a case, the amount required to cancel the preferred equity must not exceed the amount by which the preferred capital is to be reduced on the date prescribed in paragraph (3):

(2)In the case referred to in the preceding paragraph, a specified purpose company must issue public notice of the information set forth in the items of the preceding paragraph regarding the reduction of the amount of preferred capital two weeks prior to the decision of the director.

(3)If the amount of preferred capital is to be reduced as referred to in paragraph (1), the director must specify the date on which the reduction of the amount of preferred capital is to become effective.

(4)The provisions of Article 64 apply mutatis mutandis if the amount of preferred capital is to be reduced as referred to in paragraph (1). In such a case, the term "resolution at a general meeting of members" in paragraph (1) of that Article is deemed to be replaced with "decision of the director"; the term "rescission of that resolution" is deemed to be replaced with "rescission of that decision"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 111(1)If a specified purpose company reduces the amount of specified capital or the amount of preferred capital pursuant to the preceding three Articles, the creditors of the specified purpose company (if the specified purpose company reduces the amount of preferred capital pursuant to the preceding Article, excluding specified bondholders, holders of specified promissory notes, and creditors from which specified borrowings have been borrowed; hereinafter the same applies in this Article) may state their objections to the reduction of the amount of specified capital or the amount of preferred capital to the specified purpose company.

(2)If the creditors of a specified purpose company may state their objections pursuant to the preceding paragraph, the specified purpose company must issue public notice in the Official Gazette of the following information, and must issue a demand separately to each known creditor of this; provided, however, that the period referred to in item (iii) may not be shorter than one month:

(3)If a creditor does not state an objection within the period prescribed in item (iii) of the preceding paragraph, that creditor is deemed to have approved the reduction of the amount of specified capital or the amount of preferred capital.

(4)If a creditor states an objection within the period referred to in paragraph (2), item (iii), the specified purpose company must pay its debt or provide suitable collateral to the creditor, or must place reasonable property into trust with a trust company or financial institution so as to enable the creditor to receive payment for the debt; provided, however, that this does not apply if the reduction of the amount of specified capital or the amount of preferred capital is unlikely to harm the creditor.

(5)A reduction to the amount set forth in one of the following items becomes effective on the date that each item prescribes; provided, however, that this does not apply if the procedures under the preceding three paragraphs have not been completed:

(6)A specified purpose company may change the date provided for in the items of the preceding paragraph at any time before that date.

Article 112The provisions of Article 828, paragraph (1) (but only the part that involves item (v)) and paragraph (2) (but only the part that involves item (v)) (Actions Seeking Invalidation of Acts Concerning the Organization of a Company); Article 834 (but only the part that involves item (v)) (Defendant); Article 835, paragraph (1) (Jurisdiction over and Transfer of an Action); Articles 836 through 839 (Order to Provide Security; Mandatory Consolidation of Oral Arguments; Persons Affected by an Upholding Judgment; Effect of a Judgment of Invalidation; Revocation or Rescission); Article 846 (Liability for Damages in Cases Where the Plaintiff Is Defeated); and Article 937, paragraph (1) (but only the part that involves item (i), sub-item (d)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to an action to invalidate a reduction to the amount of specified capital or the amount of preferred capital. In such a case, the term "a shareholder, etc." in Article 828, paragraph (2), item (v) of that Act is deemed to be replaced with "a member, director, company auditor, liquidator", and Cabinet Order provides for any other necessary technical replacement of terms.

Article 113If the amount of preferred capital reduced pursuant to Article 109 or Article 110 exceeds the amount used to cancel preferred equity or the amount appropriated to compensate for losses, a specified purpose company must incorporate the excess amount (referred to as "reduction surplus" in Article 190) into preferred capital.

Article 114(1)A specified purpose company may distribute profits to its members (other than the specified purpose company itself) limited to the amount arrived at when the sum total of the amounts set forth in items (ii) through (iv) is subtracted from the amount set forth in item (i) as of the last day of the most recent business year:

(2)In addition to being governed by the provisions on preferred distribution to preferred equity members provided for in the asset securitization plan, a distribution of profits must be made in accordance with the number of units of preferred equity or specified equity held by each member (other than the specified purpose company itself).

Article 115(1)A specified purpose company whose business year is one year in length may provide in its articles of incorporation that the company may distribute monies to its members (other than the specified purpose company itself) limited to once on a specific date per business year as decided by the director (or as decided by a majority of the directors, if there are multiple directors) (hereinafter such a distribution of monies is referred to as an "interim dividend" in this Subsection).

(2)The decision referred to in the preceding paragraph must be made within three months from the specific date prescribed in that paragraph.

(3)Interim dividends may be paid up to the amount arrived at when the sum total of the amounts set forth in items (ii) through (v) is subtracted from the amount referred to in item (i):

(4)On finding that the sum of the amounts set forth in Article 114, paragraph (1), items (ii) through (iv) is likely to exceed the amount referred to in Article 114, paragraph (1), item (i) on the last day of the business year of a specified purpose company, the director must not decide to pay interim dividends for that business year.

(5)The payment of interim dividends is deemed to be the distribution of profits and the provisions of Article 32, paragraph (4) (but only the part that involves item (ii)) of this Act; Article 151, paragraph (1) (but only the part that involves item (viii)) of the Companies Act as applied mutatis mutandis pursuant to Article 45, paragraph (4); and paragraph (2) of the preceding Article apply.

Article 116The provisions of Article 457 (Methods of Delivery of Dividend Property) of the Companies Act apply mutatis mutandis to a specified purpose company's distribution of profits or payment of interim dividends. In such a case, the phrases "The dividend property (including monies paid pursuant to the provisions of Article 455, paragraph (2) and monies paid pursuant to the provisions of the preceding Article", "the shareholder register", "the shareholders (including registered pledgees of shares", and "the shareholders" in Article 457, paragraph (1) of the Companies Act are deemed to be replaced with "Monies distributed pursuant to the provisions of Article 114, paragraph (1) of the Asset Securitization Act (or, if interim dividends are paid, the monies that are distributed", "register of specified equity members or register of preferred equity members", "the members (including registered pledgees of specified equity and registered pledgees of preferred equity", and "the members", respectively; and the terms "dividend surplus" and "shareholders" in Article 457, paragraphs (2) and (3) of the Companies Act are deemed to be replaced with "monies" and "members", respectively.

Article 117If a specified purpose company violates Article 114, paragraph (1) in distributing profits as under that paragraph or violates Article 115, paragraph (3) in paying interim dividends, the persons receiving monies distributed as dividends through that action (hereinafter referred to as a "cash dividend" in this Subsection) (or, in the case of a payment of interim dividends in violation of Article 115, paragraph (3), the monies distributed (hereinafter referred to as a "cash distribution" in this Subsection); hereinafter the same applies in this Article); the director undertaking the duty of distributing those profits or paying those interim dividends (including a person that Cabinet Office Order prescribes as having been involved, in the course of their duties, in the distribution of profits or payment of interim dividends that the director carries out); and the following persons have a joint and several obligation to pay monies equivalent to the amount of the cash dividends delivered to persons receiving a cash dividend to the specified purpose company:

Article 118If a specified purpose company pays interim dividends and the sum of the amounts set forth in Article 114, paragraph (1), items (ii) through (iv) at the time when the approval referred to in Article 104, paragraph (2) is obtained (or, in the case referred to in the first sentence of Article 104, paragraph (4), at the time when the report referred to in the second sentence of that paragraph is made) for the financial statements prescribed in Article 102, paragraph (2) in the business year in which the company pays the interim dividends (or, if the preceding business year is not the most recent business year, the business year preceding that one) exceeds the amount set forth in Article 114, paragraph (1), item (i), the directors undertaking the duty of paying those interim dividends have a joint and several obligation to pay the excess amount (or, if the excess amount exceeds the amount of the cash distributions in the payment of interim dividends, the amount of the cash distributions) to the specified purpose company; provided, however, that this does not apply to directors who prove that they did not neglect to exercise due care in undertaking that duty.

Article 119(1)The provisions of Article 462, paragraphs (2) and (3) (Liability Related to Dividends of Surplus) of the Companies Act apply mutatis mutandis to the liability of the directors of a specified purpose company as under Article 117 of this Act; the provisions of Article 463 (Restrictions on Remedy Over Against Shareholders) of that Act apply mutatis mutandis to the members of a specified purpose company; the provisions of Article 464 (Liability Where Shares Are Acquired in Response to Demand for Purchase) of that Act apply mutatis mutandis to the liability of the directors of a specified purpose company that responds to a demand under Article 182-4, paragraph (1) as applied mutatis mutandis pursuant to Article 38, the liability of the directors of a specified purpose company that responds to a demand under Article 182-4, paragraph (1) as applied mutatis mutandis pursuant to Article 50, paragraph (1), and the liability of the directors of a specified purpose company that responds to a demand under Article 153, paragraph (1) of this Act; and the provisions of Article 465, paragraph (2) (Liability in Cases of Damage) of the Companies Act apply mutatis mutandis to the liability of the directors of a specified purpose company under the preceding Article. In such a case, the term "the preceding paragraph" in Article 462, paragraph (2) of the Companies Act is deemed to be replaced with "Article 117 of the Asset Securitization Act"; the term "executing persons" in that paragraph is deemed to be replaced with "the director prescribed in that Article"; the phrase "the persons provided for in each item of that paragraph" in that paragraph is deemed to be replaced with "the persons provided for in each item of that Article"; the term "under that paragraph" in that paragraph is deemed to be replaced with "under that Article"; the term "under paragraph (1)" in paragraph (3) of that Article is deemed to be replaced with "under Article 117 of the Asset Securitization Act"; the term "executing persons" in that paragraph is deemed to be replaced with "the director prescribed in that Article"; the term "the persons prescribed in each item of that paragraph" is deemed to be replaced with "the persons prescribed in each item of that Article"; the term "the distributable amount as at the time of the act set forth in each item of paragraph (1) of the preceding Article" in that paragraph is deemed to be replaced with "the amount provided in Article 114, paragraph (1) or Article 115, paragraph (3) of the Asset Securitization Act"; the term "all shareholders" in that paragraph is deemed to be replaced with "all members"; the term "in paragraph (1) of the preceding Article" in Article 463, paragraph (1) of that Act is deemed to be replaced with "in Article 117 of the Asset Securitization Act"; the term "the acts set forth in each item of Article 461, paragraph (1)" in that paragraph is deemed to be replaced with "the distribution of profits or payment of interim dividends under the provisions of Article 114 of the Asset Securitization Act"; the term "the total book value of the monies, etc." in that paragraph is deemed to be replaced with "the amount of cash dividends or the amount of the cash distributions"; the term "the distributable amount as at the day when such act takes effect" in that paragraph is deemed to be replaced with "the amount prescribed in paragraph (1) of that Article or Article 115, paragraph (3) of the Asset Securitization Act"; the term "executing persons who made the payment of monies under paragraph (1) of the preceding Article" in that paragraph is deemed to be replaced with "director prescribed in Article 117 of the Asset Securitization Act"; the term "the persons provided for in each item of that paragraph" in that paragraph is deemed to be replaced with "the persons provided for in each item of that Article"; the term "paragraph (1) of the preceding Article" in paragraph (2) of that Article is replaced with "Article 117 of the Asset Securitization Act"; the term "that paragraph" in that paragraph is deemed to be replaced with "that Article"; the term "the book value of the monies, etc." in that paragraph is deemed to be replaced with "the amount of cash dividends or the amount of cash distributions"; the term "the distributable amount as at the day when such payment is made" in Article 464, paragraph (1) of the Companies Act is deemed to be replaced with "the amount referred to in Article 114, paragraph (1) of the Asset Securitization Act for the business year in which that payment was made (or, if the preceding business year is not the most recent business year, the business year preceding that one)"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 97, paragraph (3) of this Act and the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2); Article 847-2; Article 847-3; Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Action to Enforce Liability at a Stock Company) of the Companies Act apply mutatis mutandis to an action to enforce the liability of the directors of a specified purpose company under the provisions of Article 117 and to an action to enforce the liability of the directors of a specified purpose company under the provisions of the preceding Article or Article 464 of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph. In such a case, the phrase "A shareholder (excluding a holder of shares less than one unit who is unable to exercise right pursuant to the provisions of the articles of incorporation under Article 189, paragraph (2)) having the shares consecutively for the preceding six months (or, in cases where a shorter period is prescribed in the articles of incorporation, that period)" in Article 847, paragraph (1) of the Companies Act is deemed to be replaced with "A specified equity member or a preferred equity member that has held preferred equity continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period)"; the term "shareholder" in paragraph (3) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "that specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849, paragraph (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholders" in paragraph (5) of that Article is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 120(1)A specified purpose company must not provide any person with an economic benefit (but only one provided on the account of the specified purpose company; hereinafter the same applies in this Article) in association with that person exercising a right as a member, specified bondholder, holder of a specified promissory note, or creditor from which specified borrowings have been borrowed (referred to as a "member or similar person" in the following paragraph and paragraph (5)).

(2)If a specified purpose company provides an economic benefit to a particular member or similar person free of charge, the specified purpose company is presumed to have provided that economic benefit to the member or similar person in association with their exercise of a right. The same applies if a specified purpose company provides an economic benefit to a particular member or similar person for a charge, if the benefit received by the specified purpose company is significantly less than that economic benefit.

(3)If a specified purpose company provides a person with an economic benefit in violation of paragraph (1), the person who has received the benefit must return it to the specified purpose company. In such a case, if the person has paid or delivered something to the specified purpose company in exchange for the benefit, the person may have this returned.

(4)If a specified purpose company violates paragraph (1) in providing a person with an economic benefit, the directors that Cabinet Office Order prescribes as being involved in providing the benefit have a joint and several obligation to pay the specified purpose company an amount equivalent to the value of the benefit provided; provided, however, that this does not apply if those persons (other than the director providing the person with the economic benefit) prove that they did not neglect to exercise due care in undertaking their duties.

(5)A release from the obligation referred to in the preceding paragraph may not be granted without the consent of all members and similar persons.

(6)The provisions of Article 97, paragraph (3) of this Act and the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2); Article 847-2; Article 847-3; Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Action to Enforce Liability at a Stock Company) of the Companies Act apply mutatis mutandis to actions to demand the return of benefits under paragraph (3). In such a case, the phrase "A shareholder (excluding a holder of shares less than one unit who is unable to exercise right pursuant to the provisions of the articles of incorporation under Article 189, paragraph (2)) having the shares consecutively for the preceding six months (or, in cases where a shorter period is prescribed in the articles of incorporation, that period)" in Article 848, paragraph (1) of the Companies Act is deemed to be replaced with "A specified equity member or a preferred equity member that has held preferred equity continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period)"; the term "shareholder" in paragraph (3) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the phrase "shareholder who made such demand or the incorporator, etc. referred to in that paragraph" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "the specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849 (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholders" in paragraph (5) of that Article is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 121(1)A specified purpose company may solicit persons to subscribe for specified bonds as decided by the director (or as decided by a majority of the directors, if there are multiple directors) in accordance with the asset securitization plan.

(2)A specified purpose company may not issue specified bonds jointly with another specified purpose company.

Article 122(1)A specified purpose company must notify a person seeking to offer to subscribe for specified bonds for subscription in response to the solicitation referred to in paragraph (1) of the preceding Article (meaning specified bonds to be allotted to persons filing offers to subscribe for them in response to such a solicitation; hereinafter the same applies in this Section) of the following information:

(2)A person making an offer to subscribe for specified bonds for subscription in response to the solicitation referred to in paragraph (1) of the preceding Article must deliver a document stating the following information to the specified purpose company:

(3)In lieu of delivering the document referred to in the preceding paragraph, a person making an offer referred to in that paragraph may provide the specified purpose company with the information that the person is required to enter in the document referred to in that paragraph by electronic or magnetic means, with the consent of the specified purpose company and pursuant to Cabinet Order provisions. In doing so, the person making the offer is deemed to have delivered the document referred to in that paragraph.

(4)The provisions of paragraph (1) do not apply if the specified purpose company has delivered a prospectus prescribed in Article 2, paragraph (10) of the Financial Instruments and Exchange Act that states the information set forth in the items of that paragraph to the person seeking to make the offer referred to in paragraph (1), nor do they apply in a case that Cabinet Office Order prescribes as one that is unlikely to result in insufficient protection of the person seeking to make an offer to subscribe for the specified bonds for subscription.

(5)If information set forth in the items of paragraph (1) changes, the specified purpose company must immediately notify any person that has made an offer referred to in paragraph (2) (hereinafter referred to as the "offeror" in this Subsection) of this and of the information that has changed.

(6)It is sufficient for a notice or demand that a specified purpose company issues to an offeror to be sent to the address referred to in paragraph (2), item (i) (or, if the offeror has notified the specified purpose company of another place or contact address for receiving notices or demands, to that place or contact address).

(7)The notice or demand referred to in the preceding paragraph is deemed to have arrived at the time that it would normally arrive.

(8)Unless there is a person referred to in paragraph (1), item (xiii), if a specified purpose company has not specified which persons it will allot the total amount of specified bonds for subscription to by the deadline referred to in item (xii) of that paragraph, the company must not issue all of the specified bonds for subscription.

(9)A director must respond to an offeror's request to inspect the asset securitization plan or to be issued a certified copy or extract of the asset securitization plan.

(10)The provisions of Article 40, paragraph (9) apply mutatis mutandis if an offeror requests to be issued a certified copy or extract of the asset securitization plan, and the provisions of Article 64 (Certificate of Deposit of Paid Money) of the Companies Act apply mutatis mutandis to the bank or equivalent entity handling the payment prescribed in paragraph (1), item (xvi). In such a case, the term "the preceding paragraph" in Article 40, paragraph (9) is deemed to be replaced with "Article 122, paragraph (9)"; the terms "Article 57, paragraph (1)", "the incorporators", and "pursuant to those provisions" in Article 64, paragraph (1) of the Companies Act are deemed to be replaced with "Article 121, paragraph (1) of the Asset Securitization Act", "the directors", and "in exchange for the specified bonds for subscription", respectively; and the terms "pursuant to the provisions of Article 34, paragraph (1) or paragraph (1) of the preceding Article" and "the stock company after establishment" in Article 64, paragraph (2) of the Companies Act are deemed to be replaced with "in exchange for the specified bonds for subscription" and "the specified purpose company", respectively.

Article 123(1)A specified purpose company must specify which persons among the offerors the specified bonds for subscription are to be allotted to, and fix the amount of specified bonds for subscription and the number of specified bonds for subscription for each amount to be allotted to those persons. In doing so, the specified purpose company may reduce the number of specified bonds for subscription for each amount to be allotted to those offerors to below the number referred to in paragraph (2), item (ii) of the preceding Article.

(2)A specified purpose company must notify an offeror of the amount of specified bonds for subscription and the number of specified bonds for subscription for each amount to be allotted to that offeror, by the day before the due date referred to in paragraph (1), item (xv) of the preceding Article.

Article 124The provisions of the preceding two Articles do not apply if a person seeking to subscribe for specified bonds for subscription concludes a contract to subscribe for the total amount of specified bonds for subscription.

Article 125The provisions of Articles 680 through 701 (excluding Article 684, paragraphs (4) and (5)) (Bondholders of Bonds for Subscription; Bond Register; Delivery of Documents Showing Information Entered in Bond Register; Manager of Bond Register; Keeping and Making Available for Inspection of Bond Register; Notices to Bondholders; Exercise of Rights by Co-owners; Perfection of Assignment of Bonds; Presumption of Rights; Entering or Recording Information Required to Be Entered in Bond Register without Being Requested by Bondholder; Entering or Recording Information Required to Be Entered in Bond Register as Requested by Bondholder; Pledges of Bonds with Issued Certificates; Perfection of Pledge of Bonds; Entries in Bond Register Regarding Pledges; Delivery of Documents Showing Information Entered in Bond Register regarding Pledges; Issuing of Bond Certificates; Information Required to Be Shown on Bond Certificates; Conversions Between Registered Bonds and Bearer Bonds; Loss of Bond Certificates; Redemption of Bonds Where Coupons Missing; Extinctive Prescription of Right to Claim Redemption of Bonds) of the Companies Act apply mutatis mutandis to specified bonds, specified bondholders, specified bond certificates, and specified bond register if a specified purpose company issues specified bonds. In such a case, the terms "information required to be entered in the bond register", "bond-issuing company", and "bearer bonds" in those provisions are deemed to be replaced with "information required to be entered in the specified bond register", "company issuing the specified bonds", and "specified bonds in bearer form", respectively; the term "bonds for subscription" in Article 680 of the Companies Act is deemed to be replaced with "specified bonds for subscription"; the term "the preceding Article" in Article 680, item (ii) of that Act is deemed to be replaced with "Article 124 of the Asset Securitization Act"; the term "Article 676, items (iii) through (viii)" in Article 681, item (i) of the Companies Act is deemed to be replaced with "Article 122, paragraph (1), items (vi) through (xi) of the Asset Securitization Act"; the term "the bond register administrator" in Article 683 and Article 684, paragraph (1) of the Companies Act is deemed to be replaced with "specified bond register administrator"; the term "Article 720, paragraph (1)" in Article 685, paragraph (5) of the Companies Act is deemed to be replaced with "Article 720, paragraph (1) as applied mutatis mutandis pursuant to Article 129, paragraph (2) of the Asset Securitization Act"; the term "Article 676, item (vii)" in Article 698 of the Companies Act is deemed to be replaced with "Article 122, paragraph (1), item (x)" of the Asset Securitization Act; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 126If a specified purpose company issues specified bonds, it must employ a specified bond manager and entrust that manager with receiving payments, preserving claims, and any other management of the specified bonds on behalf of the specified bondholders; provided, however, that this does not apply if the amount of each specified bond for subscription to which its solicitation pertains is 100 million yen or more, or to other cases that Cabinet Office Order prescribes as those that are unlikely to result in insufficent protection of the specified bondholders.

Article 127(1)A specified bond manager has the authority to engage in any act in or out of court on behalf of a specified bondholder that is necessary for receiving the payment of claim under the specified bond or for preserving the fulfillment of the claim under the specified bond.

(2)If a specified bond manager receives payment as referred to in the preceding paragraph, the specified bondholder may demand payment of the redemption amount for the specified bonds or their interest from the specified bond manager. In such a case, if there are provisions indicating that specified bond certificates are to be issued, the specified bondholders must claim payment of the redemption amount in exchange for the specified bond certificate and claim payment of the interest in exchange for the coupon.

(3)The right to claim payment referred to in the first sentence of the preceding paragraph is extinguished by prescription if it is not exercised for ten years from the time when the right became exercisable.

(4)A specified bond manager must not perform the following acts without a resolution at a specified bondholders meeting; provided, however, that this does not apply with regard to the act set forth in item (ii), if persons have been notified of the information referred to in Article 122, paragraph (1), item (xi) pursuant to the provisions of that paragraph:

(5)Having performed an act set forth in item (ii) of the preceding paragraph without recourse to a resolution at a specified bondholders meeting pursuant to the proviso to the preceding paragraph, the specified bond manager must issue public notice of this and separately notify each known specified bondholder of this without delay.

(6)The public notice under the preceding paragraph must be issued by the means of public notice used at the specified purpose company that has issued the specified bonds (hereinafter referred to as the "company issuing the specified bonds" in this Section); provided, however, that if the company's means of notice is electronic public notice (meaning electronic public notice prescribed in Article 194, paragraph (1), item (iii)), public notice must be issued by publication in the Official Gazette.

(7)If it is necessary for the specified bond manager to do so in order to perform the act set forth in paragraph (1) or the act set forth in the items of paragraph (4) for specified bonds whose management the specified bond manager has been entrusted with, the manager may investigate the status of business and assets of the company issuing the specified bonds.

(8)The provisions of Article 703 (Qualifications of Bond Managers); Article 704 (Obligations of Bond Managers); Articles 707 through 714 (Appointment of Special Agent; Method of Acts of Bond Managers; Special Provisions for Multiple Bond Managers; Liability of Bond Managers; Resignation of Bond Managers; Liability of Bond Managers after Resignation; Dismissal of Bond Managers); Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 870, paragraph (1) (but only the part that involves item (ii)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 874 (but only the part that involves items (i) and (iv)) (Restrictions on Appeal); Article 875 (Exclusion from the Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rule) of the Companies Act apply mutatis mutandis to specified bond managers. In such a case, the terms "bonds", "bondholder", "bond-issuing company", and "bondholders meeting" in those provisions are deemed to be replaced with "specified bonds", "specified bondholders", "company issuing the specified bonds", and "specified bondholders' meeting", respectively; the term "paragraph (1) of Article 705" in Article 709, paragraph (2) of the Companies Act is deemed to be replaced with "Article 127, paragraph (1) of the Asset Securitization Act"; the term "this Act" in Article 710, paragraph (1) of the Companies Act is deemed to be replaced with "the Asset Securitization Act"; the term "Article 702" in Article 711, paragraph (2) of the Companies Act is deemed to be replaced with "Article 126 of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 128(1)The specified bondholders of a specified purpose company are entitled to have the claims under their own specified bonds paid in preference to other creditors from the assets of the specified purpose company; provided, however, that this does not preclude the asset securitization plan from providing otherwise.

(2)The precedence of a statutory lien as referred to in the preceding paragraph comes after the general statutory liens pursuant to the provisions of the Civil Code.

Article 129(1)The specified bondholders organize a specified bondholders meeting for each class (meaning a class prescribed in Article 681, item (i) of the Companies Act as applied mutatis mutandis pursuant to Article 125) of specified bonds.

(2)The provisions of Part IV, Chapter III (excluding Article 715) (Bondholders Meeting); Part VII, Chapter II, Section 7 (Action Seeking Rescission of Performance of a Bond-issuing Company); Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 870, paragraph (1) (but only the part that involves items (vii) through (ix)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Article 874 (but only the part that involves item (iv)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to specified bonds, specified bondholders, specified bond certificates, specified bond managers, specified bond registries, and specified bondholders meetings, if a specified purpose company issues specified bonds. In such a case, the terms "bond-issuing company", "bearer bonds", and "representative bondholder" in those provisions are deemed to be replaced with "company issuing the specified bonds", "specified bonds in bearer form", and "representative specified bondholder", respectively; the term "this Act" in Article 716 of the Companies Act is deemed to be replaced with "the Asset Securitization Act or the asset securitization plan"; the term "electronic public notice" in Article 720, paragraph (5) of the Companies Act is deemed to be replaced with "electronic public notice (meaning electronic public notice prescribed in Article 194, paragraph (1), item (iii) of the Asset Securitization Act)"; the term "bondholders meeting reference documents" in Article 721 of the Companies Act is deemed to be replaced with "reference documents for a specified bondholders meeting"; the term "each item of Article 706, paragraph (1)" in Article 724, paragraph (2), item (i) of the Companies Act is deemed to be replaced with "the items of Article 127, paragraph (4) of the Asset Securitization Act"; the term "paragraph (1) of Article 706" in Article 724, paragraph (2), item (ii) of the Companies Act is deemed to be replaced with "Article 127, paragraph (4) of the Asset Securitization Act"; the term "Article 707" in Article 729, paragraph (1) of the Companies Act is deemed to be replaced with "Article 707 as applied mutatis mutandis pursuant to Article 127, paragraph (8) of the Asset Securitization Act"; the term "Article 676" in Article 733, item (i) of the Companies Act is deemed to be replaced with "Article 122, paragraph (1) of the Asset Securitization Act"; the term "paragraphs (1) through (3) of Article 705, and under Articles 708 and 709" in Article 737, paragraph (2) of the Companies Act is deemed to be replaced with "Article 127, paragraphs (1) through (3) of the Asset Securitization Act and the provisions of Article 708 and Article 709 of the Companies Act as applied mutatis mutandis pursuant to Article 127, paragraph (8) of the Asset Securitization Act"; the term "Article 449" in Article 740, paragraph (1) of the Companies Act is deemed to be replaced with "Article 111 of the Asset Securitization Act"; the term "Article 702" in Article 740, paragraph (2) of the Companies Act is deemed to be replaced with "Article 126 of the Asset Securitization Act"; the term "paragraph (1) of Article 705 (including as applied mutatis mutandis pursuant to Article 737, paragraph (2))" in Article 741, paragraph (3) of the Companies Act is deemed to be replaced with "Article 127, paragraph (1) (including as applied mutatis mutandis pursuant to Article 737, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to Article 129, paragraph (2) of the Asset Securitization Act) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 130To apply the Secured Bond Trust Act and other laws and regulations specified by Cabinet Order, specified bonds are deemed to be corporate bonds, pursuant to the provisions of Cabinet Order.

Article 131(1)A specified purpose company may issue convertible specified bonds in accordance with the provisions of the asset securitization plan.

(2)If a Type II Specified Purpose Company issues convertible specified bonds with conditions for conversion that are particularly favorable to persons other than preferred equity members, the total amount of convertible specified bonds that may be issued to those persons, the amount to be paid in, the conditions for conversion, the details of the preferred equity to be issued upon conversion, and the period during which a person may request the conversion must be decided by resolution at a general meeting of members, even if the asset securitization plan provides for these particulars. In such a case, the director, at that general meeting of members, must explain the reason for the need to issue convertible specified bonds in an amount to be paid in that is particularly favorable to persons other than preferred equity members.

(3)The resolution referred to in the preceding paragraph is effective only on the first convertible specified bonds issued after the resolution is adopted, and these convertible specified bonds must be issued within six months from the date of that resolution.

(4)The provisions of Article 39, paragraph (3) apply mutatis mutandis to the resolution referred to in paragraph (2).

Article 132(1)If a specified purpose company issues convertible specified bonds (other than those on which a resolution referred to in paragraph (2) of the preceding Article has been adopted), the company must issue public notice or notify the members of the total amount of convertible specified bonds, the amount to be paid in, conditions for conversion, details of the preferred equity to be issued upon conversion, the period during which a person may request their conversion, and the means of subscribing for them.

(2)If a specified purpose company is to issue the notice referred to in the preceding paragraph using an electronic data processing system or by using other information and communications technology, the company must obtain the consent of the members pursuant to the provisions of Cabinet Order, and issue that notice using the means that Cabinet Office Order prescribes.

(3)A specified purpose company may not allot convertible specified bonds until after two weeks have passed since the date on which the public notice or notice under paragraph (1) was issued.

Article 133(1)For convertible specified bonds, in addition to the information of which, pursuant to Article 122, paragraph (1), a specified purpose company must notify a person that seeks to make an offer to subscribe for specified bonds for subscription in response to the solicitation referred to in Article 121, paragraph (1), the company must notify that person of the following information:

(2)The information set forth in the items of the preceding paragraph must be entered or recorded in the specified bond register for convertible specified bonds, and if convertible specified bond certificates are issued, that information must be entered in the convertible specified bond certificates.

Article 134(1)If a specified purpose company issues convertible specified bonds, the convertible specified bonds must be registered in the locality of its head office within two weeks from the due date prescribed in Article 122, paragraph (1), item (xv).

(2)The following information must be registered in a registration as referred to in the preceding paragraph:

(3)The provisions of Article 915, paragraph (1) (Registration of a Change) of the Companies Act apply mutatis mutandis if a piece of information set forth in an item of the preceding paragraph changes.

(4)If a specified purpose company solicits a person subscribing for convertible specified bonds in a foreign state and a particular required to be registered arises in a foreign state, the period for registration is counted from the date on which the notice of that information arrives.

Article 135(1)To request the conversion of convertible specified bonds, a person must disclose the following information:

(2)A person requesting a conversion must submit the convertible specified bond certificate to the specified purpose company; provided, however, that this does not apply if the convertible specified bond certificate has not been issued.

Article 136If a specified purpose company has fixed a specific date pursuant to the provisions of Article 43, paragraph (2) in order to specify which preferred equity members are entitled to vote at general meetings of members, a preferred equity member that holds preferred equity issued based on a request for conversion after that date is not entitled to vote.

Article 137A person requesting a conversion pursuant to the provisions of Article 135, paragraph (1) becomes a preferred equity member on the date referred to in item (ii) of that paragraph.

Article 138(1)The provisions of Article 151, paragraph (1) (excluding the items) (Effect of Pledge of Shares); Article 210 (Demanding Cessation of Issuance of Shares for Subscription); Article 212, paragraph (1) (but only the part that involves item (i)) (Liabilities of Persons Who Subscribed for Shares with Unfair Amount To Be Paid In); and Article 915, paragraph (3) (but only the part that involves item (i)) (Registration of a Change) of the Companies Act apply mutatis mutandis to a specified purpose company's convertible specified bonds. In such a case, the terms "If a stock company carries out any of the acts set forth below", "such act", and "shareholders" in Article 151, paragraph (1) of the Companies Act are deemed to be replaced with "If the conversion of convertible specified bonds has been effected", "such conversion", and "convertible specified bondholders", respectively; the terms "shareholders" and "Article 199, paragraph (1)" in Article 210 of the Companies Act are deemed to be replaced with "members" and "Article 121, paragraph (1) of the Asset Securitization Act", respectively; the term "laws and regulations or the articles of incorporation" in Article 210, item (i) of the Companies Act is deemed to be replaced with "laws and regulations, the articles of incorporation, or the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 97, paragraph (3) of this Act and the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2); Article 847-2; Article 847-3; Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Action to Enforce Liability at a Stock Company) of the Companies Act apply mutatis mutandis to an action for demanding payment under Article 212, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph. In such a case, the phrase "A shareholder (excluding a holder of shares less than one unit who is unable to exercise rights pursuant to the provisions of the articles of incorporation) having the shares consecutively for the preceding six months or more (or, in cases where a shorter period is prescribed in the articles of incorporation, that period or more)" in Article 847, paragraph (1) of the Companies Act is deemed to be replaced with "A specified equity member or a preferred equity member that has held preferred equity continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period)"; the term "shareholder" in paragraph (3) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the phrase "shareholder who made such demand or the incorporator, etc. referred to in that paragraph" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "that specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849, paragraph (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholders" in paragraph (5) of that Article is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 139(1)A specified purpose company may issue specified bonds with preferred equity subscription rights in accordance with the provisions of the asset securitization plan.

(2)The total amount to be contributed upon exercise of the subscription rights embedded in each specified bond with preferred equity subscription rights (referred to as the "amount to be paid in" in the following paragraph, Article 144, paragraph (1), item (ii), and Article 145, paragraph (1), item (i), and paragraph (2)) may not exceed the amount of that specified bond with preferred equity subscription rights.

(3)If a specified purpose company issues specified bonds with preferred equity subscription rights that allow the preferred equity subscription rights to be transferred independently, the total amount of specified bonds with preferred equity subscription rights, the total amount to be paid in for the preferred equity issued upon the exercise of those subscription rights, and the period during which the preferred equity subscription rights may be exercised must be decided by resolution at a general meeting of members, even if the asset securitization plan provides for these particulars; provided, however, that this does not apply if the company issues specified bonds with preferred equity subscription rights that it only redeems or cancels if the total amount to be paid in for the preferred equity associated with unexercised preferred equity subscription rights does not exceed the total amount of existing specified bonds with preferred equity subscription rights.

(4)If a Type II Specified Purpose Company issues specified bonds with preferred equity subscription rights and the details of the embedded preferred equity subscription rights are particularly favorable to persons other than preferred equity members, the amount of specified bonds with preferred equity subscription rights that may be issued to those persons, the amount to be paid in, the details of the subscription rights, and the period during which the subscription rights may be exercised must be decided by resolution at a general meeting of members, even if the asset securitization plan provides for these particulars. In such a case, the directors, at the general meeting of members, must explain the reason for the need to issue the specified bonds with preferred equity subscription rights in an amount to be paid in that is particularly favorable to persons other than preferred equity members.

(5)The provisions of Article 131, paragraphs (3) and (4) apply mutatis mutandis to a resolution at a general meeting of members referred to in the preceding two paragraphs. In such a case, the term "convertible specified bonds" in Article 131, paragraph (3) is deemed to be replaced with "specified bonds with preferred equity subscription rights ".

Article 140(1)If a specified purpose company issues specified bonds with preferred equity subscription rights (other than ones with regard to which a resolution referred to in paragraph (4) of the preceding Article has been adopted), the company must issue public notice or notify the members of the total amount of specified bonds with preferred equity subscription rights, the amount to be paid in, the details of the preferred equity subscription rights, the period during which the preferred equity subscription rights may be exercised, and the means of subscribing for them.

(2)The provisions of Article 132, paragraph (2) apply mutatis mutandis to the notice referred to in the preceding paragraph.

(3)A specified purpose company may not allot specified bonds with preferred equity subscription rights until after two weeks have passed since the date on which the public notice or notice under paragraph (1) was issued.

Article 141(1)For specified bonds with preferred equity subscription rights, in addition to the information of which, pursuant to Article 122, paragraph (1), a specified purpose company must notify a person that seeks to make an offer to subscribe for specified bonds for subscription in response to the solicitation referred to in Article 121, paragraph (1), the company must notify that person of the following information:

(2)If certificates representing specified bonds with preferred equity subscription rights are issued, the information set forth in the items of the preceding paragraph must be entered in them; provided, however, that this does not apply if preferred equity subscription warrants referred to in paragraph (1) of the following Article are issued.

(3)The information set forth in the items of paragraph (1) must be entered or recorded in the specified bond register for specified bonds with preferred equity subscription rights.

Article 142(1)If the asset securitization plan provides that preferred equity subscription rights may be transferred independently, the specified purpose company must issue preferred equity subscription warrants.

(2)The following information and serial numbers must be entered in preferred equity subscription warrants, and the representative director must sign them or have their name and personal seal affixed to them:

Article 143(1)If preferred equity subscription warrants are issued, a preferred equity subscription right must be transferred through the delivery of the preferred equity subscription warrant.

(2)The provisions of Article 258, paragraphs (1) and (2) (Presumption of Rights) and Article 291 (Loss of Share Option Certificates) of the Companies Act apply mutatis mutandis to preferred equity subscription warrants. In such a case, the term "share options with issued certificate" in Article 258 of that Act is deemed to be replaced with "preferred equity subscription rights".

Article 144(1)The following information must be registered in the registration of a specified bond with preferred equity subscription rights:

(2)The provisions of Article 134, paragraphs (1), (3), and (4) apply mutatis mutandis to the registration of a specified bond with preferred equity subscription rights.

Article 145(1)To exercise preferred equity subscription rights, a person must disclose the following information:

(2)If a person exercising preferred equity subscription rights has paid the entire amount to be paid in for the new preferred equity and preferred equity subscription warrants have been issued, the person must submit its preferred equity subscription warrants to the specified purpose company, but if preferred equity subscription warrants have not been issued (excluding cases in which certificates representing specified bonds with preferred equity subscription rights have not been issued), the person must present the certificates representing the specified bonds with preferred equity subscription rights.

(3)A payment referred to in the preceding paragraph must be made at the place where the bank or equivalent entity handles those payments as referred to in Article 141, paragraph (1), item (iii).

Article 146A person exercising a preferred equity subscription right pursuant to paragraph (1) of the preceding Article becomes a preferred equity member at the time of making the payment referred to in paragraph (2) of that Article.

Article 147(1)The provisions of Article 210 (Demanding Cessation of the Issuing of Shares for Subscriptions) and Article 212, paragraph (1) (but only the part that involves item (i)) (Liabilities of Persons who Subscribed for Shares with Unfair Amount To Be Paid In) of the Companies Act apply mutatis mutandis to specified bonds with preferred equity subscription rights, and Article 136 of this Act and Article 915, paragraph (3) (but only the part that involves item (i)) (Registration of a Change) of the Companies Act apply mutatis mutandis to the exercise of preferred equity subscription rights. In such a case, the terms "shareholders" and "Article 199, paragraph (1)" in Article 210 of the Companies Act are deemed to be replaced with "members" and "Article 121, paragraph (1) of the Asset Securitization Act", respectively; the term "laws and regulations or the articles of incorporation" in Article 210, item (i) of the Companies Act is deemed to be replaced with "laws and regulations, the asset securitization plan, or the articles of incorporation"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 97, paragraph (3) of this Act, Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2); Article 847-2; Article 847-3; Article 849, paragraph (2), paragraph (3), and paragraphs (6) through (11); Article 851; and Article 853, paragraph (1), items (ii) and (iii)) (Action to Enforce Liability at a Stock Company) of the Companies Act apply mutatis mutandis to an action for demanding payment under Article 212, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph. In such a case, the phrase "A shareholder (excluding a holder of shares of less than one unit who is unable to exercise their right pursuant to the provisions of the articles of incorporation under Article 189, paragraph (2)) having the shares consecutively for the preceding six months or more (or, in cases where a shorter period is prescribed in the articles of incorporation, that period or more)" in Article 847, paragraph (1) of the Companies Act is deemed to be replaced with "A specified equity member or a preferred equity member that has held preferred equity continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period)"; the term "shareholder" in paragraph (3) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder who made such demand or the incorporator, etc. referred to in that paragraph" in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in paragraph (5) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc. (meaning a shareholder, a qualified former shareholder or a shareholder of an ultimate, wholly owning parent company, etc.; hereinafter the same applies in this Section)" in Article 847-4, paragraph (2) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "the shareholder, etc." in that paragraph is deemed to be replaced with "that specified equity member or preferred equity member"; the term "shareholder, etc." in Article 849, paragraph (1) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder, etc." in paragraph (4) of that Article is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholders" in paragraph (5) of that Article is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholders, etc." in Article 850, paragraph (3) of that Act is deemed to be replaced with "specified equity members or preferred equity members"; the term "shareholder, etc." in Article 852 of that Act is deemed to be replaced with "specified equity member or preferred equity member"; the term "shareholder" in Article 853, paragraph (1), item (i) of that Act is deemed to be replaced with "specified equity member or preferred equity member"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 148A specified purpose company may issue specified short-term bonds only in the following cases:

Article 149(1)Specified short-term bonds do not require the preparation of a specified bond register.

(2)The provisions of Article 121, paragraph (1); Article 129; Articles 131 through 147; and Article 154 do not apply to specified short-term bonds.

Article 164In the following cases, a specified purpose company must go into liquidation pursuant to the provisions of this Subsection:

Article 165A specified purpose company that goes into liquidation pursuant to the provisions of the preceding Article (hereinafter referred to as "specified purpose company in liquidation") is deemed to continue to exist inasmuch as the task of liquidation is concerned, until the liquidation is completed.

Article 166(1)A specified purpose company in liquidation must have the following administrative organs:

(2)The provisions of Article 67 do not apply to a specified purpose company in liquidation.

Article 167(1)The following persons become the liquidators of a specified purpose company in liquidation:

(2)Preferred equity members are entitled to vote on a resolution prescribed in item (iii) of the preceding paragraph.

(3)If there is no person to become a liquidator pursuant to the provisions of paragraph (1), the court appoints a liquidator at the petition of an interested party.

(4)Notwithstanding the provisions of paragraph (1) or the preceding paragraph, the court appoints a liquidator for a specified purpose company in liquidation that has been dissolved on the grounds set forth in Article 160, paragraph (1), item (v) at the petition of an interested party or the Minister of Justice, or on its own authority.

(5)Notwithstanding the provisions of paragraph (1) and paragraph (3), the court appoints a liquidator for a specified purpose company in liquidation that has come to fall under a case set forth in Article 164, item (ii) at the petition of an interested party.

(6)Notwithstanding the provisions of paragraph (1) and paragraph (3), the court appoints a liquidator for a specified purpose company in liquidation that has been dissolved on the grounds set forth in Article 160, paragraph (1), item (vi) at the petition of an interested party or the Prime Minister, or on its own authority.

(7)The provisions of Article 69 and Article 70 apply mutatis mutandis to the liquidator of a specified purpose company in liquidation.

Article 168(1)A liquidator (other than one appointed by the court pursuant to the provisions of paragraphs (3) through (6) of the preceding Article) may be dismissed at any time by resolution at a general meeting of members.

(2)Preferred equity members are entitled to vote on the dismissal of liquidators pursuant to the provisions of the preceding paragraph.

(3)The court may dismiss a liquidator appointed pursuant to paragraph (6) of the preceding Article, at the petition of an interested party or the Prime Minister, or on its own authority.

(4)If there are material grounds for doing so, the court may dismiss the liquidator at the petition of the following members:

(5)The provisions of Article 76, paragraphs (1) through (3) and paragraph (6) of this Act, and Article 937 (1) (but only the part that involves item (ii), sub-item (e) and item (iii), sub-item (a)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to a liquidator. In such a case, the term "the number of officers" in Article 76, paragraph (1) is deemed to be replaced with "the number of liquidators"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 169A liquidator undertakes the following duties:

Article 170(1)A liquidator carries out the execution of business of a specified purpose company in liquidation.

(2)If there are two or more liquidators, the business of a specified purpose company in liquidation is decided by a majority of the liquidators, unless otherwise provided for in the articles of incorporation.

(3)The provisions of Article 80 and Articles 82 through 84 of this Act, and Article 354 (Apparent Representative Director); Article 355 (Duty of Loyalty); Article 357, paragraph (1) (Director's Duty to Report); Article 484 (Commencement of Bankruptcy Procedures for Liquidating Stock Companies); and Article 485 (Remuneration for Liquidators Appointed by the Court) of the Companies Act apply mutatis mutandis to a liquidator (but the provisions of Article 84 do not apply to liquidators appointed by the court pursuant to the provisions of Article 167, paragraphs (3) through (6)) of a specified purpose company in liquidation. In such a case, the phrase "the title of president, vice president or other title regarded as having authority to represent the stock company" in Article 354 of the Companies Act is deemed to be replaced with "the title of the person found to have the authority to represent the specified purpose company in liquidation"; the term "shareholders meeting" in Article 355 of that Act is deemed to be replaced with "general meeting of members"; the term "the shareholders (or, for a company with auditors, the company auditors)" in Article 357, paragraph (1) of that Act is deemed to be replaced with "the company auditors"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 171(1)The liquidator represents a specified purpose company in liquidation; provided, however, that this does not apply if a representative liquidator (meaning a liquidator representing the specified purpose company in liquidation; the same applies hereinafter) or other person to represent the specified purpose company in liquidation has been otherwise provided for.

(2)If there are multiple persons serving as the liquidators referred to in the main text of the preceding paragraph, each liquidator represents the specified purpose company in liquidation individually.

(3)A specified purpose company in liquidation may select a representative liquidator from among the liquidators based on the articles of incorporation, based on the person the liquidators select from amongst themselves (other than one appointed by the court pursuant to Article 167, paragraphs (3) through (6); hereinafter the same applies in this paragraph) pursuant to the provisions of the articles of incorporation, or by resolution at a general meeting of members.

(4)If the directors become the liquidators pursuant to the provisions of Article 167, paragraph (1), item (i) and a representative director has been specified, the representative director becomes the representative liquidator.

(5)If the court appoints liquidators pursuant to the provisions of Article 167, paragraphs (3) through (6), it may specify a representative liquidator from among those liquidators.

(6)The provisions of Article 349, paragraphs (4) and (5) (Representatives of Companies); Article 351 (Measures When Vacancy Arises in Office of Representative Director); and Article 937, paragraph (1) (but only the part that involves item (ii), sub-items (a) and (b)) (Commissioning of Registration by a Judicial Decision) of the Companies Act apply mutatis mutandis to the representative liquidator of a specified purpose company in liquidation, and the provisions of Article 352 (Authority of Persons Who Perform Duties on Behalf of Directors) of that Act applies mutatis mutandis to a person who is to preform duties on behalf of the liquidator or representative liquidator of a specified purpose company in liquidation. In such a case, the term "the number" in Article 351, paragraph (1) of that Act is deemed to be replaced with "the number of persons" and Cabinet Order provides for any other necessary technical replacement of terms.

Article 172(1)If a liquidator neglects their duties, the liquidator is liable to compensate the specified purpose company in liquidation for damage resulting from this.

(2)If a liquidator engages in the transactions prescribed in Article 80, paragraph (1), item (i) in violation of Article 80, paragraph (1) as applied mutatis mutandis pursuant to Article 170, paragraph (3), the amount of the profit that the liquidator or a third party gains as a result of the transactions is presumed to constitute the amount of the damage referred to in the preceding paragraph.

(3)If a specified purpose company in liquidation incurs damage as a result of the transactions prescribed in Article 80, paragraph (1), item (ii) or (iii) as applied mutatis mutandis pursuant to Article 170, paragraph (3), the following liquidators are presumed to have neglected their duties:

(4)The provisions of Article 94, paragraphs (4) and (5) apply mutatis mutandis to the liability of liquidators prescribed in paragraph (1). In such a case, the term "Article 80, paragraph (1), item (ii)" in Article 94, paragraph (5) is deemed to be replaced with "Article 80, paragraph (1), item (ii) as applied mutatis mutandis pursuant to Article 170, paragraph (3)".

Article 173(1)If a liquidator acts in bad faith or with gross negligence in the performance of their duties, the liquidator is liable to compensate a third party for damage resulting from this.

(2)The preceding paragraph also applies if a liquidator performs the following acts; provided, however, that this does not apply if the liquidator proves that they did not fail to exercise due care in performing the act:

Article 174(1)If a liquidator or company auditor is liable for damage incurred by a specified purpose company in liquidation or a third party, and other liquidators or company auditors are also liable for that damage, those persons are joint and several obligors.

(2)In the case referred to in the preceding paragraph, the provisions of Article 96 do not apply.

(3)The provisions of Article 97 apply mutatis mutandis to an action to enforce the liability of a liquidator of a specified purpose company in liquidation. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 175With regard to a specified purpose company in liquidation, the provisions of Section 3 (excluding Article 34 (excluding paragraphs (4) and (5)) and Article 46); Section 4, Subsection 1; Article 72, paragraph (1); Article 345, paragraph (4) of the Companies Act as applied mutatis mutandis pursuant to paragraph (3) of that Article, as applied mutatis mutandis pursuant to Article 345, paragrqaph (3); Article 359 of that Act as applied mutatis mutandis pursuant to Article 81, paragraph (2); and Section 4, Subsection 6 involving directors and representative directors apply to liquidators and representative liquidators as provisions on liquidators and representative liquidators.

Article 176(1)Without delay after assuming the position, a liquidator must investigate the current status of the assets of the specified purpose company in liquidation and, pursuant to Cabinet Office Order provisions, prepare an inventory of property and a balance sheet (hereinafter referred to as an "inventory of property and related materials" in this Article) as of the date on which the specified purpose company in liquidation came to fall under the case set forth in either item of Article 164, and must submit or provide them at a general meeting of members and have them approved.

(2)Preferred equity members are entitled to vote on the approval of the inventory of property and related materials.

(3)A specified purpose company in liquidation must preserve its inventory of property and related materials from the time of their preparation until the time that the completion of liquidation has been registered in the locality of its head office.

(4)The court, upon petition or on its own authority, may order a party to litigation to submit an inventory of property and related materials in whole or in part.

Article 177(1)A specified purpose company in liquidation, pursuant to Cabinet Office Order provisions, must prepare a balance sheet and an administrative report, as well as their annexed detailed statements, for each liquidation year (meaning the one-year period starting on the day after the date on which the specified purpose company in liquidation came to fall under a case as set forth in either item of Article 164 or on the corresponding date in subsequent years (or, if the corresponding date does not exist in a subsequent year, the day before this)).

(2)The balance sheet and administrative report as well as their annexed detailed statements referred to in the preceding paragraph must be audited by company auditors pursuant to Cabinet Office Order provisions.

(3)The provisions of Article 494, paragraphs (2) and (3) (Preparation and Retention of Balance Sheets); Article 496, paragraphs (1) and (2) (Keeping and Inspection of Balance Sheets); Article 497 (excluding the items of paragraph (1)) (Provision of Balance Sheets to Annual Shareholders Meeting); and Article 498 (Order to Submit Balance Sheet) of the Companies Act apply mutatis mutandis to the balance sheet and administrative report, and their annexed detailed statements referred to in paragraph (1). In such a case, the phrase "(including, in cases where the provisions of paragraph (1) of the preceding Article apply, audit reports" in Article 496, paragraph (1) of the Companies Act is deemed to be replaced with "(including audit reports audited as referred to in Article 177, paragraph (2) of the Asset Securitization Act"; the term "annual shareholders meeting" in Article 496, paragraph (1) and Article 497 of the Companies Act is deemed to be replaced with "annual general meeting of members"; the term "the balance sheet and administrative reports provided for in each such item" in Article 497, paragraph (1) of the Companies Act is deemed to be replaced with "the balance sheet and administrative reports audited as referred to in Article 177, paragraph (2) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

(4)Preferred equity members are entitled to vote on the approval of the balance sheet under Article 497, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph.

Article 178(1)Before distributing residual assets, a specified purpose company in liquidation must specify the following particulars by decision of the liquidators:

(2)In the case provided for in the preceding paragraph, if preferred equity has been issued, a specified purpose company in liquidation may specify the following particulars as the particulars set forth in item (ii) of that paragraph, in accordance with the details of the preferred equity:

(3)The provisions regarding the particulars set forth in paragraph (1), item (ii) must indicate that the residual assets are to be allotted in accordance with the number of units of specified equity or preferred equity (or, if there are any provisions with regard to the particulars set forth in item (ii) of the preceding paragraph, the number of units of specified equity or each type of preferred equity) held by the members (other than the specified purpose company in liquidation itself and the specified equity members and preferred equity members referred to in item (i) of the preceding paragraph).

(4)The provisions of Article 505 (Cases Where Residual Assets Consist of Property Other Than Monies) and Article 506 (Treatment in Cases Where a Base Number of Shares Is Provided) of the Companies Act apply mutatis mutandis to specified purpose companies in liquidation. In such a case, the term "shares" in Article 505, paragraph (1), item (ii) and Article 506 of that Act is deemed to be replaced with "of units of specified equity or preferred equity"; the terms "shares (", "minimum number of shares", and "below minimum shareholding" in Article 506 of that Act are deemed to be replaced with "units of specified equity or preferred equity (", "minimum number of units of specified equity or minimum number of units of preferred equity", and "below the minimum specified equity holding threshold or below the minimum preferred equity holding threshold", respectively; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 179(1)The provisions of Articles 499 through 503 (Public Notices to Creditors; Restrictions on Performance of Obligations; Performance of Obligations Relating to Conditional Claims; Restrictions on Distribution of Residual Assets Before Performance of Obligations; Exclusion from Liquidation); Article 507, paragraphs (1), (3), and (4) (Conclusion of Liquidation); Article 508 (Retention of Accounting Materials); Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 870, paragraph (1) (but only the part that involves items (i), (ii), (v), and (vi)) (Hearing of Statements); Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Article 874 (but only the part that involves items (i) and (iv)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Act); Article 876 (Supreme Court Rule); Article 928, paragraphs (1) and (3) (Registration of a liquidator); and Article 929 (but only the part that involves item (i)) (Registration of Completion of Liquidation) of the Companies Act apply mutatis mutandis to the liquidation of a specified purpose company. In such a case, the phrase "the settlement of accounts (or, in cases where the provisions of the preceding paragraph apply, the settlement of accounts approved under that paragraph) to the shareholders meeting" in Article 507, paragraph (3) of the Companies Act is deemed to be replaced with "the settlement of accounts (those audited as prescribed in Article 177, paragraph (2) of the Asset Securitization Act) at the general meeting of members"; the phrase "A liquidator (or, for a company with board of liquidators, the liquidators set forth in each item of paragraph (7) of Article 489)" in Article 508, paragraph (1) of the Companies Act is deemed to be replaced with "A liquidator"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)Preferred equity members are entitled to vote on approval of the settlement of accounts under Article 507, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph.

Article 180(1)If the court finds that the following grounds exist for a specified purpose company in liquidation, the court, upon petition and based on the provisions of Article 514 of the Companies Act as applied mutatis mutandis pursuant to paragraph (4), orders the specified purpose company in liquidation to commence special liquidation:

(2)A creditor, liquidator, company auditor, or member may file a petition to commence special liquidation.

(3)If the specified purpose company in liquidation is suspected to be insolvent, the liquidator must file a petition to commence special liquidation.

(4)The provisions of Articles 512 through 518-2 (Order to Suspend Other Procedures; Restrictions on Withdrawal of Petition for Commencement of Special Liquidation; Order to Commence Special Liquidation; Suspension of Other Procedures; Order to Suspend Procedures to Enforce Security Interest; Prohibition of Set-offs; Participation in Procedures by Parties with a claim in Respect of Foreign Taxes Subject to Mutual Assistance); Part II, Chapter IX, Section 2, Subsections 2 through 10 (excluding Article 522, paragraph (3); Article 530, paragraph (2); and Article 536) (Supervision and Investigation by the Court; Liquidators; Supervisor; Investigators; Restrictions on Acts of Liquidating Stock Companies; Dispositions Necessary); Part VII, Chapter II, Section 4 (Action Concerning Special Liquidation); Part VII, Chapter III, Section 1 (excluding Article 868, paragraphs (2) through (6) and Articles 870 through 874) (General Provisions); Part VII, Chapter III, Section 3 (excluding Article 879; Article 882, paragraph (2); and Article 896) (Special Provisions on the Procedures of Special Liquidation); and Article 938 (excluding paragraph (6)) (Commissioning of Registration by a Juridical Decision Concerning Special Liquidation) of the Companies Act apply mutatis mutandis to the special liquidation of a specified purpose company in liquidation. In such a case, the phrase "procedures to enforce the security interest that exists in the assets of the liquidating stock company, procedures to enforce charge on whole company assets or compulsory execution procedures based on the general liens and other claims that have general priority that have already been enforced against the assets of the liquidating stock company" in Article 516 of the Companies Act is deemed to be replaced with "procedures to exercise a security interest that exists over the assets of the specified purpose company in liquidation or compulsory execution based on a general statutory lien or a claim with general priority that has already been enforced against the property of the specified purpose company in liquidation"; the phrase "or shareholders who have held, for the consecutive period of past six months or more (or, in cases where a shorter period is provided for in the articles of incorporation, such period), not less than three hundredths (3/100) of the voting rights of all shareholders (excluding the shareholders that cannot exercise voting rights on all particulars on which resolutions can be passed at the shareholders meeting; or, in cases where any proportion less than that is provided for in the articles of incorporation, such proportion) or shareholders who have held, for the consecutive period of past six months or more (or, in cases where a shorter period is provided for in the articles of incorporation, such period), not less than three hundredths (3/100) of the issued shares (excluding treasury shares; or, in cases where a lower proportion is provided for in the articles of incorporation, such proportion)" in Article 522, paragraph (1) of the Companies Act is deemed to be replaced with "or specified equity members holding voting rights that account for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the voting rights of all specified equity members (other than specified equity members not entitled to vote on all of the matters that may be resolved at a general meeting of members) or preferred equity members holding voting rights that account for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the voting rights of all preferred equity members (other than preferred equity members not entitled to vote on all of the matters that may be resolved at a general meeting of members) continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period); or specified equity members holding a number of units of specified equity that accounts for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the total number of units of specified equity (other than the company's own specified equity) or preferred equity members holding a number of units of preferred equity that accounts for three percent (or, if a smaller percentage is provided for in the articles of incorporation, that percentage) or more of the issued preferred equity (other than the company's own preferred equity) continuously for the preceding six months (or, if a shorter period is provided for in the articles of incorporation, that period)"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 240(1)The rights of the beneficiaries and the settlor of a specified purpose trust (other than the right to receive repayment for the debts that the trustee trust company or financial institution owes to the beneficiaries under the specified purpose trust agreement) may be exercised only at a meeting of interest holders.

(2)The exercise of a right referred to in the preceding paragraph must be based on a resolution to exercise it.

(3)The provisions of Chapter IV, Section 3 (Special Provisions on Decision-Making Methods Involving Two or More Beneficiaries) of the Trust Act do not apply to a specified purpose trust.

Article 241A matter other than one that is prescribed by a law or regulation or the specified purpose trust agreement as requiring a resolution at a meeting of interest holders may not be resolved at a meeting of interest holders.

Article 242(1)A meeting of interest holders is convened by the trustee trust company or financial institution, the representative interest holder, or the specified trust administrator.

(2)To convene a meeting of interest holders, the convener must send a notice of convocation in writing to each beneficiary certificate holder (but only those that are entitled to vote) two weeks prior to the date of the meeting.

(3)In lieu of sending a written notice as referred to in the preceding paragraph, a convener may send the notice by electronic or magnetic means, pursuant to the provisions of Cabinet Order, with the consent of the persons that are required to receive the notice referred to in the preceding paragraph. In such a case, the convener is deemed to have sent the written notice referred to in the preceding paragraph.

(4)The subject of the meeting and the number of voting rights held by each beneficiary certificate holder must be entered or recorded in the notice referred to in the preceding two paragraphs, as well as the total number of voting rights or the proportion of voting rights held by each beneficiary certificate holder.

(5)The provisions of Article 108 (Decision to Call a Beneficiaries Meeting) and Article 191 (excluding paragraph (5)) (Notice to Beneficiaries) of the Trust Act and the provisions of Article 718, paragraphs (1) and (3) (Demand for Calling Meeting by Bondholders) of the Companies Act apply mutatis mutandis to the convocation of a meeting of interest holders. In such a case, the phrase "the total amount of bonds of a certain class (excluding bonds that have been redeemed)" in Article 718, paragraph (1) of the Companies Act is deemed to be replaced with "the total share of principal"; the term "the bond-issuing company or bond manager" in that paragraph is deemed to be replaced with "the trustee trust company or financial institution, representative interest holder, or specified trust administrator"; and Cabinet Order provides for any other necessary technical replacement of terms.

(6)The provisions of Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases); Article 869 (Prima Facie Showing); Article 871 (Appending of the Reason); Article 874 (but only the part that involves item (iv)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the convocation of a meeting of interest holders under the provisions of Article 718, paragraph (3) of that Act as applied mutatis mutandis pursuant to the preceding paragraph. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 243(1)Unless otherwise provided for in this Act or the specified purpose trust agreement, a resolution at a meeting of interest holders must be passed by the majority vote of the beneficiary certificate holders attending the meeting, where those beneficiary certificate holders in attendance hold more than half of the total shares of principal.

(2)The shares of principal held by beneficiary certificate holders not entitled to vote on specific resolutions at a meeting of interest holders are not to be included in the calculation of the shares of principal of beneficiary certificate holders referred to in the preceding paragraph.

(3)The provisions of Article 62 apply mutatis mutandis to how resolutions are passed at a meeting of interest holders. In such a case, the term "articles of incorporation" in paragraph (1) of that Article is deemed to be replaced with "specified purpose trust agreement"; the phrase "proposal concerning a matter subject to inclusive voting" in that paragraph is deemed to be replaced with "proposal"; the term "Article 56, paragraph (1)" in paragraph (2) of that Article is deemed to be replaced with "Article 242, paragraph (2) or (3)"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 244(1)A beneficiary certificate holder is entitled to vote in proportion to the share of principal of the beneficial interest held by them.

(2)Notwithstanding the provisions of the preceding paragraph, a trustee trust company or financial institution is not entitled to vote in connection with beneficial interest it holds as its own asset.

(3)The provisions of paragraph (1) do not preclude the specified purpose trust agreement from providing otherwise.

Article 245(1)A beneficiary certificate holder not attending a meeting of interest holders may vote in writing.

(2)The provisions of Article 110, paragraphs (1) and (2) (Provision of Voting Forms and Reference Documents for a Beneficiaries Meeting); Article 115, paragraphs (2) and (3) (Voting in Writing); and Article 116 (Voting by Electronic or Magnetic Means) of the Trust Act, and the provisions of Article 311, paragraphs (3) and (4) (Voting in Writing) of the Companies Act apply mutatis mutandis to voting in writing referred to in the preceding paragraph. In such a case, the phrase "Upon issuing a notice set forth in paragraph (1) of the preceding Article, a convener" in Article 110, paragraph (1) of the Trust Act is deemed to be replaced with "If a trust is a specified purpose trust, the convener, when issuing a convocation notice for a meeting of interest holders"; the term "paragraph (2) of the preceding Article" in paragraph (2) of that Article is deemed to be replaced with "Article 242, paragraph (3) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 246(1)A resolution at a meeting of interest holders is executed by the representative interest holder or specified trust administrator if there is such a person, and executed by the person specified by resolution at a meeting of interest holders if there is no representative interest holder or specified trust administrator.

(2)The provisions of Article 708 (Method of Acts of Bond Managers) and Article 709, paragraph (1) (Special Provisions for Multiple Bond Managers) of the Companies Act apply mutatis mutandis to the person specified by resolution at a meeting of interest holders referred to in the preceding paragraph. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 247Remuneration that is to be given to the person specified by resolution at a meeting of interest holders referred to in paragraph (1) of the preceding Article, the costs required for that person to administer affairs, the interest that accrues beginning on the day of their expenditure, and compensation for damage incurred by that person for administering the affairs in the absence of negligence are borne by the trustee trust company or financial institution as costs that it is to bear in connection with the trust property.

Article 248(1)The costs of a meeting of interest holders are borne by the trustee trust company or financial institution as costs that it is to bear in connection with the trust property.

(2)The costs associated with a petition referred to in Article 732 of the Companies Act as applied mutatis mutandis pursuant to the following Article are borne by the trustee trust company or financial institution as costs that it is to bear in connection with the trust property; provided, however, that at the petition of an interested person or on its own authority, the court may specify another person to bear all or part of those costs.

Article 249(1)The provisions of Article 114 (Proxy Voting); Article 117 (Inconsistent Voting); Article 118, paragraph (2) (Attendance of Beneficiaries); Article 119 (Resolutions for Postponement or Continuation); and Article 120 (Minutes of a Meeting) of the Trust Act and the provisions of Article 314 (Accountability of the Directors); Article 315 (Authority of the Chairperson); Article 731 (excluding paragraph (1)) (Minutes of a Meeting); Articles 732 through 735 (Petitions for Approval of Resolutions Made at Bondholders Meetings; Rejection of Resolutions Made at Bondholders Meetings; Effectiveness of Resolutions Made at Bondholders Meetings; Public Notice of Rulings Approving or Rejecting Resolutions Made at Bondholders Meetings); and Article 738 (Dismissal of Representative Bondholders) of the Companies Act apply mutatis mutandis to meetings of interest holders. In such a case, the term "Article 108 and Article 109" in Article 119 of the Trust Act is deemed to be replaced with "Article 242 of the Asset Securitization Act"; the phrase "a director, an accounting advisor, a company auditor or an executive officer" in Article 314 of the Companies Act is deemed to be replaced with "a trustee trust company or financial institution"; the term "bond-issuing company" in Article 731, paragraph (2) of that Act is deemed to be replaced with "trustee trust company or financial institution"; the term "The bond manager and bondholders" in paragraph (3) of that Article is deemed to be replaced with "The representative interest holder, specified trust administrator, and each beneficiary certificate holder"; the term "bond-issuing company" in that paragraph is deemed to be replaced with "trustee trust company or financial institution"; the term "the solicitation in Article 676" in Article 733, item (i) of that Act is deemed to be replaced with "the solicitation for beneficiary certificates"; the term "such bond-issuing company" in that item is deemed to be replaced with "the trustee trust company or financial institution"; the term "bond-issuing company" in Article 735 of that Act is deemed to be replaced with "trustee trust company or financial institution"; the term "the representative bondholders or resolution administrator" in Article 738 of that Act is deemed to be replaced with "the person specified by the resolution referred to in Article 246, paragraph (1) of the Asset Securitization Act"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases); Article 870 (1) (but only the part that involves item (vii)) (Hearing of Statements); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the petitions for approval of resolutions referred to in Article 732 of that Act as applied mutatis mutandis pursuant to the preceding paragraph.

Article 250(1)If a resolution is to be passed at a meeting of interest holders, and if provisions have been established in the specified purpose trust agreement in advance or consent of all of the beneficiary certificate holders (but only those entitled to vote) have been obtained, that resolution may be passed in writing.

(2)A written resolution has the same effect as a resolution at a meeting of interest holders.

(3)The provisions of Article 63, paragraphs (1) to (3) and the provisions concerning meetings of interest holders (excluding Article 243, paragraph (3) and Article 245) apply mutatis mutandis if a resolution is passed in writing. In such a case, the phrase "If a director or a specified equity member makes a proposal on a matter subject to exclusive voting that is the subject of a general meeting of members, and all of the specified equity members (but only those entitled to vote on that matter) manifest the intention to agree with the proporsal by documents or electronic or magnetic records" in Article 63, paragraph (1) is deemed to be replaced with "If all of the specified equity members (but only those entitled to vote on the relevant matter) manifest the intention to agree with the subject of resolution by documents or electronic or magnetic records"; the term "approving that proposal" in that paragraph is deemed replaced with "approving that subject"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 251(1)If the beneficial interest in a specified purpose trust has been divided into multiple classes of beneficial interests with different features under an asset trust securitization plan, and a resolution at a meeting of interest holders (but only a resolution for approval referred to in Article 269, paragraph (1), item (i); a resolution referred to in Article 273, paragraph (1); Article 274, paragraph (1); or Article 276, paragraph (1); or a resolution for approval referred to in Article 275, paragraph (1)) is likely to cause detriment to the holders of beneficiary certificates representing a certain class of beneficial interest, in addition to the resolution at the meeting of interest holders, approval must be obtained at a meeting of the beneficiary certificate holders for that class of beneficial interest (hereinafter referred to as a "class meeting of interest holders") (or, if there are two or more classes of beneficial interest in connection with which a resolution at a meeting of interest holders is likely to cause detriment, approval must be obtained at each class meeting of interest holders whose constituent members are beneficiary certificate holders that hold one of those two or more classes of beneficial interest).

(2)A resolution for approval under the preceding paragraph at each class meeting of interest holders must be passed by at least a two-thirds majority vote (or, if a higher proportion is provided for in the specified purpose trust agreement, that proportion) of the beneficiary certificate holders attending the meeting, with those beneficiary certificate holders in attendance holding more than half (or, if a proportion of one-third or more is provided for in the specified purpose trust agreement, that proportion) of the total shares of principal of the beneficial interest associated with that class meeting of interest holders.

(3)To apply the provisions of the preceding paragraph to a resolution for approval at a class meeting of interest holders whose constituent members are beneficiary certificate holders holding a class of beneficial interest with no share of principal, the term "shares of principal" in that paragraph is replaced with "shares of interest".

Article 252(1)A representative interest holder or a specified trust administrator may attend a class meeting of interest holders or state an opinion in writing.

(2)The provisions of Article 109, paragraphs (1) through (3) (Notice of a Beneficiaries' Meeting) of the Trust Act apply mutatis mutandis to a class meeting of interest holders. In such a case, the phrase "known beneficiaries and trustee (in cases where there is a trust supervisor, known beneficiaries, trustee, and trust supervisor)" in paragraph (1) of that Article is deemed to be replaced with "the representative interest holder or the specified trust administrator"; and Cabinet Order provides for any other necessary technical replacement of terms.

Article 253The provisions of Articles 242 through 245, Article 248, and Article 249 apply mutatis mutandis to class meeting of interest holders. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 254(1)Interest holders may appoint one or multiple representative interest holders at a meeting of interest holders from among beneficiary certificate holders with at least one-thousandth of share of principal, and entrust that person or those persons with exercising the rights of the beneficiaries and settlor of the specified purpose trust (other than the following rights) on behalf of the beneficiary certificate holders:

(2)If there are multiple representative interest holders, unless otherwise specified at a meeting of interest holders, the exercise of a right referred to in the preceding paragraph is effected based on the decision of the majority of the representative interest holders.

Article 255The trustee trust company or financial institution of a specified purpose trust or its officer or employee may not become a representative interest holder of that specified purpose trust.

Article 256(1)If a representative interest holder has been appointed at a meeting of interest holders, only the representative interest holder may exercise the rights of the beneficiaries and settlor of the specified purpose trust.

(2)In the case referred to in the preceding paragraph, each beneficiary certificate holder may file a request with the representative interest holder in writing, to exercise their right (other than the right to convene a meeting of interest holders and the rights referred to in Article 36 (Duty to Report on the Status of Trust-Related Administrative Processes), Article 38 (Request for Inspection of Books), and Article 39 (Request for Disclosure of the Name of Another Beneficiary) of the Trust Act).

(3)Having received a request referred to in the preceding paragraph, a representative interest holder may not deny the request unless the beneficiary certificate holder filing the request is found to have filed the request for the purpose of obstructing the implementation of affairs of the specified purpose trust or of harming the common interests of the beneficiary certificate holders, or there are other legitimate grounds for doing so.

Article 257(1)A representative interest holder may resign upon obtaining consent to do so at a meeting of interest holders.

(2)The provisions of Article 57 (excluding paragraphs (1) and (6)) (Resignation of the Trustee), Article 262 (excluding paragraph (5)) (Jurisdiction over Non-Contentious Cases Concerning Trusts), Article 263 (Special Provisions on the Proceedings in Non-Contentious Cases Concerning Trusts), and Article 264 (Supreme Court Rules) of the Trust Act apply mutatis mutandis to the resignation of a representative interest holder referred to in the preceding paragraph. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

Article 258Remuneration that is to be given to a representative interest holder, the costs required for the person to administer affairs, the interest that accrues beginning on the day of their expenditure, and compensation for damage incurred by the person in administering the affairs in the absence of negligence are borne by the trustee trust company or financial institution as costs that it is to bear in connection with the trust property.

Article 259(1)The provisions of Article 44 (Cessation of Acts of the Trustee at the Demand of the Beneficiaries) and Article 85, paragraph (4) (Special Provisions on Trustee Liability) of the Trust Act and the provisions of Article 385, paragraph (2) (Enjoinment of Acts of Directors by Company Auditors) of the Companies Act apply mutatis mutandis to demand for an injunction against a trustee trust company or financial institution by a representative interest holder, the provisions of Article 707 (Appointment of Special Agent); Article 708 (Method of Acts of Bond Managers); and Article 710, paragraph (1) (Liability of Bond Manager) of the Companies Act apply mutatis mutandis to a representative interest holder, and the provisions of Article 738 (Dismissal of Representative Bondholders) of the Companies Act apply mutatis mutandis to the dismissal of a representative interest holder. In such a case, the term "acts of trust" in Article 44, paragraph (1) of the Trust Act is deemed to be replaced with "specified purpose trust agreement"; the term "this Act" in Article 710, paragraph (1) of the Companies Act is deemed to be replaced with "this Act, the specified purpose trust agreement"; and Cabinet Order provides for any other necessary technical replacement of terms.

(2)The provisions of Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases); Article 871 (Appending of the Reason); Article 874 (but only the part that involves item (i)) (Restrictions on Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the appointment of a special agent referred to in Article 707 of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph.

Article 260(1)If there is no representative interest holder, the trustee trust company or financial institution may appoint a specified trust administrator.

(2)The appointment of a specified trust administrator must be done in accordance with the provisions of the specified purpose trust agreement.

(3)Notwithstanding the provisions of Article 240, paragraph (1), a specified trust administrator has the authority to conduct, in its own name, all acts in and out of court in connection with the rights of the beneficiaries and settlor of a specified purpose trust (other than the right to receive repayment for the debts that the trustee trust company or financial institution owes to the beneficiaries under the specified purpose trust agreement and the rights set forth in the items of Article 254, paragraph (1)) on behalf of the beneficiary certificate holders.

(4)If the trustee trust company or financial institution appoints a specified trust administrator, it must notify the beneficiary certificate holders of this without delay.

(5)The provisions of Article 255, Article 256, and Article 258 of this Act; the provisions of Article 44 (Cessation of a Trustee's Acts at the Demand of the Beneficiaries) and Article 85, paragraph (4) (Special Provisions on Trustee Liability, etc.) of the Trust Act; and the provisions of Article 385, paragraph (2) (Enjoinment of Acts of Directors by Company Auditors); Article 704 (Obligations of Bond Managers), Article 707 (Appointment of Special Agent); Article 709, paragraph (1) (Special Provisions for Multiple Bond Managers); Article 710, paragraph (1) (Liability of Bond Manager); the first sentence of Article 711, paragraphs (1) and (3) (Resignation of Bond Managers); and Article 713 (Dismissal of Bond Managers) of the Companies Act apply mutatis mutandis to a specified trust administrator. In such a case, the phrase "If a representative interest holder has been appointed at a meeting of interest holders" in Article 256, paragraph (1) is deemed to be replaced with "If the trustee trust company or financial institution has appointed a specified trust administrator"; the phrase "as costs that it is to bear in connection with the trust property" in Article 258 is deemed to be replaced with "unless it has been provided in the specified purpose trust agreement in advance that they are costs that it is to bear in connection with the trust property"; the term "the purpose of the company with auditors" in Article 385, paragraph (1) of the Companies Act is deemed to be replaced with "the purpose of the specified purpose trust"; the term "articles of incorporation" in that paragraph is deemed to be replaced with "specified purpose trust agreement"; the phrase "substantial detriment to such company with auditors" in that paragraph is deemed to be replaced with "substantial detriment to the trust property"; the term "acts of trust" in Article 44, paragraph (1) of the Trust Act is deemed to be replaced with "specified purpose trust agreement"; the term "this Act" in Article 710, paragraph (1) of the Companies Act is deemed to be replaced with "this Act, the specified purpose trust agreement"; the term "bond-issuing company" in the first sentence of Article 711, paragraph (1) and Article 713 of that Act is deemed to be replaced with "trustee trust company or financial institution"; and Cabinet Order provides for any other necessary technical replacement of terms.

(6)The provisions of Article 868 (4) (Jurisdiction over Non-Contentious Cases), Article 871 (Appending of the Reason), Article 874 (but only the part that involves item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act), and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to appointment of a special agent referred to in Article 707 of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph; the provisions of Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 871 (Appending of the Reason), Article 874 (but only the part that involves item (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act), and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the resignation of a specified trust administrator under Article 711, paragraph (3) of that Act as applied mutatis mutandis pursuant to the preceding paragraph; and the provisions of Article 868, paragraph (4) (Jurisdiction over Non-Contentious Cases); Article 870, paragraph (1) (but only the part that involves item (ii)) (Hearing of Statements); the main text of Article 871 (Appending of the Reason); Article 872 (but only the part that involves item (iv)) (Immediate Appeal); Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act); and Article 876 (Supreme Court Rules) of the Companies Act apply mutatis mutandis to the dismissal of a specified trust administrator under Article 713 of that Act as applied mutatis mutandis pursuant to the preceding paragraph. In such a case, Cabinet Order provides for the necessary technical replacement of terms.

(7)If there is a specified trust administrator and a resolution is passed at a meeting of interest holders to appoint a representative interest holder, the specified trust administrator may not exercise the rights of the beneficiaries and settlor of the specified purpose trust.

(8)The provisions of Chapter IV, Section 4 (Trust Administrator) of the Trust Act do not apply to a specified purpose trust.

Article 261Notwithstanding the provisions of Article 240, paragraph (1), if there is neither a representative interest holder nor a specified trust administrator, each beneficiary certificate holder may exercise the rights of the beneficiaries and settlor of the specified purpose trust, excluding matters that, pursuant to this Act, requires a resolution at a meeting of interest holders and matters involved in the convocation of a meeting of interest holders.

Article 262(1)Notwithstanding the provisions of Article 240, paragraph (1), if a trustee trust company or financial institution is engaging, or is likely to engage in, an act that violates a law or regulation or the specified purpose trust agreement, and that act is likely to cause irreparable damage to the trust property, a beneficiary certificate holder may demand that the trustee trust company or financial institution cease the act.

(2)Notwithstanding the provisions of Article 240, paragraph (1), if a trustee trust company or financial institution is engaging, or is likely to engage in, an act that violates Article 33 (Duty of Impartiality) of the Trust Act, and that act is likely to cause irreparable damage to some of the beneficiary certificate holders, those beneficiary certificate holders may demand that the trustee trust company or financial institution cease that act.

Article 263Notwithstanding the provisions of Article 240, paragraph (1), a beneficiary certificate holder may file a request with the court, pursuant to the provisions of Article 150 (Judicial Decision Ordering Changes to a Trust Due to Special Circumstances) of the Trust Act, to change the specified purpose trust.