M&A Guideline Compliance

1. 1

   We fulfill our obligations based on contracts with clients.

   • We conduct intermediary and FA services with the duty of care of a prudent manager.
   • We do not pursue our own or third parties' interests at the expense of clients' interests.
   • (As an intermediary) We are fair and impartial to all clients, and do not prioritize one party's interests or unjustly harm another's.
2. 2

   Regardless of contractual obligations, we respect clients' intentions as a matter of professional ethics and act to realize their interests.

3. 3

   The representative recognizes that (1) enhancing knowledge and capabilities and (2) ensuring proper operations are essential, communicates this internally and externally, and implements measures consistent with such messages.

4. 4

   We implement effective measures to improve knowledge and capabilities.

5. 5

   We implement measures to ensure proper operations by officers and employees engaged in support services.

6. 6

   When outsourcing part of our services to third parties, we implement measures to ensure proper conduct by outsourcees.

[Decision-Making]

1. 7

   Based on expert knowledge, we provide practical proposals and support the client's M&A decision-making. We expressly explain anticipated major merits and demerits, and treat company information shared before contract conclusion with the duty of a prudent manager.

2. 8

   Advertising and sales activities toward contract conclusion respect stop requests, avoid false or misleading content, and are conducted from the perspective of properly supporting client decision-making.

[Conclusion of Intermediary/FA Agreement]

1. 9

   We conclude intermediary or FA contracts that match the actual form of services provided.

2. 10

   Before contract conclusion, we provide written documentation explaining 17 important matters (intermediary vs. FA distinctions, service scope, qualifications, fees, exclusivity, tail provisions, contract period, termination grounds, etc.) and obtain the client's consent.

3. 11

   We clearly explain fees, services provided, and counterparty fees in writing (including electronic means), including success-fee rates and base amounts, minimum fees, payment timing, specific service contents, and the qualifications, experience, and track record of personnel.

4. 12

   The explanations in items 10 and 11 are provided to the person with authority to conclude the contract.

5. 13

   After the explanations in items 10 and 11, we give clients sufficient time to consider the contract conclusion.

[Valuation]

1. 14

   When conducting valuation, we explain methods and underlying assumptions to clients in advance and obtain their understanding of methods and price ranges.

[Selection of Acquirer (Matching)]

1. 15

   Name clearance (disclosure of detailed materials including the transferor's identity) is performed after presenting non-name sheets (teasers), obtaining the transferor's consent for interested candidates, and concluding NDAs with such candidates.

2. 16

   Consent from the transferor is obtained individually for each candidate to whom disclosure is made.

3. 17

   We take care to prevent leakage of detailed transferor information before NDA conclusion.

[Negotiation]

1. 18

   We support negotiations in a client-centered manner, including by explaining the overall M&A process and next steps in clear terms even to inexperienced clients.

[Due Diligence (DD)]

1. 19

   In conducting DD, we encourage and support the transferor in preparing materials requested by the acquirer.

[Final Contract Negotiation and Conclusion]

1. 20

   We support final contract conclusion in a manner that satisfies both parties to the greatest extent possible and minimizes post-M&A dispute risk (or, where risk remains, ensures the parties understand it).

2. 21

   We implement adjustments and explanations to clients regarding risks that could escalate into post-closing disputes — including treatment of transferor's management guarantees, representations and warranties, post-closing payment and procedural adjustments, and matters concerning the closing window.

3. 22

   In concluding the final contract, we prompt clients to reconfirm the contract content to avoid omissions.

[Closing]

1. 23

   After preparing specific closing arrangements, we confirm on the closing day that the consideration has been received from the acquirer.

1. 24

   To maximally exclude inappropriate acquirers, we conduct investigations of acquirers — including their intent and capability to perform the final contract and continue the target business — and explain the investigation summary to the transferor client. We review financial status, compliance (anti-social forces affiliation, past M&A disputes, etc.), and business actuality, and build an organizational sharing and cautious review system when information on inappropriate acquirers is obtained.

Exclusivity Clauses

1. 25

   When setting exclusivity clauses, we limit the scope as much as possible. We allow clients to seek second opinions from other support institutions where there is no reasonable basis to prevent it.

2. 26

   When setting exclusivity clauses, the contract period is set within a maximum of approximately 6 months to 1 year.

3. 27

   We include clauses (including oral declarations) clearly stating that clients may terminate the contract at any time.

Direct Negotiation Restrictions

1. 28

   Candidates subject to direct negotiation restrictions are limited to those introduced through our involvement and contact.

2. 29

   Restricted direct negotiations are limited to those concerning M&A between the client and the candidate.

3. 30

   The effective period of direct negotiation restriction clauses is limited to the duration of the intermediary/FA agreement.

Tail Provisions

1. 31

   The tail period is targeted within a maximum of approximately 2 to 3 years.

2. 32

   Tail provisions apply only to acquirers involved/contacted by our firm and introduced to the transferor — limited to acquirers for whom name clearance has been completed.

3. 33

   When no exclusivity clause exists and the client receives support from multiple M&A professionals resulting in introductions of the same candidate from multiple firms, we do not claim fees based on tail provisions if not selected as the supporting firm for closing.

1. 34

   Before contract conclusion, we inform both parties that we will be an intermediary contracting with both transferor and acquirer — particularly disclosing if fees are received from both parties.

2. 35

   Upon contract conclusion, we expressly explain matters where conflicts of interest are anticipated to each party, and timely disclose such information when separately identified.

3. 36

   As we accept commissions from both parties, we must be neutral and fair to both, and do not engage in conflict-of-interest acts that unjustly benefit or harm one party.

4. 37

   In particular, we never engage in such acts for our or third parties' benefit. The intermediary contract sets forth duties not to take additional fees from acquirers, favor repeat clients, demand fees based on price-gap manipulation, distort communications, or conceal one-sided information.

5. 38

   We do not conduct definitive valuations and advise clients to seek opinions from qualified professionals as needed.

6. 39

   When presenting simplified valuations as reference, we expressly state that they are simplified reference estimates, disclose any party's influence considered, and that clients may seek expert opinions as needed.

7. 40

   In negotiations, we do not pursue only one party's interests, but seek to realize both parties' interests with neutrality and fairness.

8. 41

   We do not conduct DD ourselves nor determine conclusions on DD report content, and advise clients to seek expert opinions as needed.

1. 42

   In addition to the above, we endeavor to act in accordance with the spirit of the Small and Medium M&A Guidelines.