June 29, 2007

On November 29, 2005, ACE PRO SOUND AND RECORDING, L.L.C. (Headquarters: Florida, United States of America; Lines of business: Retail sales of musical instruments and audio equipment; Hereinafter: the plaintiff) brought a lawsuit against six leading sellers of musical instruments and audio equipment and Yamaha Corporation of America (hereinafter, YCA), a subsidiary of Yamaha, (for a total of seven companies) claiming that the plaintiff had suffered damages because the seven companies had refused transactions with the plaintiff. The Lawsuit also named a leading retailer and its CEO as dependants in the action.

YCA’s opinion is that the plaintiff’s claims are based on the plaintiff’s misunderstanding of the facts and that the basis for the calculation of the damages is unclear. Accordingly, YCA believes it is not liable for paying the damages claimed by the plaintiff, and, during the lawsuit proceedings, YCA has insisted on the accuracy of its views.

Recently, among the plaintiff’s various claims, the plaintiff has withdrawn its request for $1 billion in compensation for damages under a class action suit based on the allegation that YCA and the other defendants violated the provisions of Article 1 and Article 2 of the Sherman Act.

Claims remaining after the withdrawal of a portion of the lawsuit are as follows: Triple damages amounting to a cumulative $45 million on the part of YCA and YCA’s co-defendants for refusal to make sales of products as provided for under Article 1 of the Sherman Act and the Florida Antitrust Act; $15 million in damages resulting from the refusal of transactions based on the provisions of Florida’s Deceptive and Unfair Trade Practices Act; a further $15 million in damages for conspiracy under Florida law and $100 million in punitive damages, owing to the plaintiff’s allegation that YCA and its co-defendants acted in conspiracy; $45 million in triple damages under the provisions of Article 2 of the Sherman Act and the Florida Antitrust Act, owing to the plaintiff’s allegation that YCA and its co-defendants acted in conspiracy; and $15 million in damages from YCA on the claim that YCA violated a contract with the plaintiff.

YCA will continue to work to demonstrate the accuracy of its views through legal proceedings.