Itochu Corporation and Turner Broadcasting System Asia Pacific Inc. (Turner) have agreed in principle to establish a content fund to co-produce Japanese animation.

The purpose of this content fund is to invest in high quality Japanese animation. The fund is very unique that it is considering broadcast in the US market from the beginning.
Itochu and Turner have built a relationship as joint venture partners in their Cartoon Network channel operation in Japan; their current attempt is a step forward of their current framework, geared toward a new relationship. The two companies, Turner, which holds over 170 million subscribers worldwide under their "Cartoon Network" brand (the largest animation channel in the world), along with business across multiple platforms, and Itochu, expanding their content business with investments in Ishimori Entertainment, SKY PerfecTV!, and Space Shower Networks, will not only share financial risks related to the production of animation, but also collaborate from an early planning & production stage. By doing so and aiming to produce high quality animation content, the collaboration of the two companies will enable production of a hit series and maximization of profit.

Furthermore, upon fund establishment, both companies as general partners will invite investors not only from animation-related companies such as Japanese terrestrial TV stations, toy manufacturers, and animation production houses, but from other industries interested in investing in high quality animation content. In order to maximize the fund’s profit, the companies plan to:

• 1. Increase recognition among general viewers and creation of a boom by simultaneous broadcast in US and Japan (the companies intend to broadcast their content on Cartoon Network in US and on terrestrial broadcasters in Japan; they will also seek airing their content worldwide)
• 2. Overall content and merchandising planning from early development stage, in order to conduct deployment of merchandise (such as toys, apparel, and foodstuff) that is consistent to the living environment and creative look and feel of the content
• 3. Utilization of Itochu and Turner's assets (Turner's worldwide distribution network, Itochu's DTH platform / CS Channels / Retail functions. Itochu will also promote the content on its retail business fields.)

While Itochu and Turner will further proceed with the selection of title(s) in which to produce, they plan to invite proposals from outside creators/companies as well. Furthermore, Itochu and Turner will cooperate in order to obtain simultaneous broadcast in US and on terrestrial network in Japan.

Turner Broadcasting System Asia Pacific, Inc. (TBS):

Turner Broadcasting System Asia Pacific, Inc.(TBS) is a wholly-owned subsidiary of Turner Broadcasting System, a Time Warner company, and a major producer of news and entertainment product around the world. In the Asia Pacific region, TBS distributes CNN International, CNNj (Japan), CNN Headline News, Cartoon Network, Turner Classic Movies, Pogo, Boomerang as well as interactive news and entertainment content.

A. Details on Fund Establishment (Tentative)

B. Content Fund Scheme (Tentative)

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