August 22, 2005
For Immediate Release
Address: 26-1 Sakuragaoka-cho , Shibuya-ku, Tokyo
Company name: GMO Internet Inc.
Code No.9449
Company representative: Masatoshi Kumagai , Representative Director and President
Contact person: Masashi Yasuda , Executive Director
TEL: 03-5456-2555 (switchboard)
URL: http://www.gmo.jp

Notice of Issue of Unsecured Convertible Bonds with Equity Warrants(Unsecured Convertible Bonds with Equity Warrants andSpecial Agreement on Limited Equal Priority among Bonds)
GMO Internet, Inc. is pleased to announce that, at a meeting of the Board of Directors held on August 22, 2005,
it was decided to issue the first to third unsecured convertible bonds with equity warrants (unsecured convertible
bonds with equity warrants and special agreement on limited equal priority among bonds) through allocation tothird parties as follows.
Please refer to the Reference Material for Issue of Unsecured Convertible Bonds with Equity Warrants by GMO
Internet, Inc., which provides information on this matter and shows the purpose of the funds being raised, theselection of the means for the fund-raising, and its characteristics. The material is attached at the end of this notice.
NOTE

I. First Unsecured Convertible Bonds with Equity Warrants

1. Name of bondFirst unsecured convertible bonds with equity warrants (unsecured convertible
bonds with equity warrants and a special agreement on limited equal priority
among bonds) of GMO Internet, Inc. (hereinafter referred to as “Bonds withequity warrants.” The bond portion shall hereinafter be referred to as “Bonds,”
and the equity warrants portion shall hereinafter be referred to as “Equity
Warrants.”)

2. Issue price of bond

100 yen per 100 yen par value

3. Issue price of equity warrants

Free

4. Reasons for calculation of

The Equity Warrant is attached to unsecured convertible bonds with equity

issue price of equity warrants

warrants, and cannot be transferred if detached from the Bond. In addition, given(reasons for free issue)

that, if the Equity Warrant is exercised, the Bond will be terminated throughc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

1substitutive payment and thus the Bond is closely connected to the Equity
Warrant, and in consideration of the economic value to be obtained from thevalue of the Equity Warrant, and the interest rate, issue price and otherconditions for the issue of the Bond, it was decided that the Equity Warrant shallbe issued for no consideration.
5. Payment date and the date of

September 7, 2005 (Wednesday)issue
6. Matter about offering(1) Method for offering

Allocation of the entire sum to Nomura Securities Co., Ltd. through private
placement(2) Issue price (offering price)

100 yen per 100 yen par value(3) Deadline for application

September 7, 2005 (Wednesday)(4)

Nomura Securities Co., Ltd., Head Office

Place

for

receiving

applications
7.

Matters

concerning

equitywarrants(1) Type and number of shares

The type of shares as the object of the Equity Warrant shall be the common sharesof the Company. The number of common shares which the Company will issue
in response to a request for the exercise of the Equity Warrant (as defined in
Item (6) of this Paragraph) or the number of the common shares held by theCompany to be transferred in lieu of the issue of new common shares (the issue

shares as the object of equity

or transfer of the common shares of the Company shall hereinafter be referred to

warrants

as “Delivery”) shall be the largest integral number obtained by dividing the total
amount of the issue price of the Bond related to the request for exercise by theconversion price set out in (ii) of Item (3) of this Paragraph (however, if changedor adjusted as set out in Item (8) or Item (9) of this Paragraph, this shall be theconversion price after change or adjustment). In this event, any fractional figureof less than one share shall be discarded, and no adjustment in cash shall be
made.

(2) Total number of equity
warrants

The number of Equity Warrants attached to each Bond shall be one. Thirty Equity
Warrants in total shall be issued.

(3) Amount of payment at(i) The amount to be paid at the time of exercising one Equity Warrant shall betime of exercise andequivalent to the issue price of the Bond.
(ii) The amount per share to be paid at the time of exercising the Equity Warrant

conversion priceshall be 3,000 yen (hereinafter referred to as “Conversion Price”) initially.

(4) Reasons for calculation of

The Bonds with equity warrants are convertible bonds with equity warrants and,of amount of payment attherefore, the amount to be paid at the time of exercising one equity warrant wastime of exercise

decided to be equivalent to the issue price of the Bond. The initial Conversion(Conversion Price)

Price was decided to be 3,000 yen, which is equivalent to 140.85% of thec copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

2

closing price for ordinary transactions of the common shares of the Company on
the Tokyo Stock Exchange on August 22, 2005.
(5) Amount ofIn the event of the issue of shares arising from the exercise of the Equity Warrant,

capitalization of issue

the amount of capitalization per common share of the Company shall be theprice of new sharesamount obtained by multiplying the issue price of the shares by 0.5. If any
fractional figure of less than one yen is created as a result of the calculation, thefractional figure shall be rounded up.

(6) Period for request of

The bondholder of the Bonds with equity warrants may request the exercise of theexercise

Equity Warrant (hereinafter referred to as “Request for Exercise”) at any time
between September 8, 2005 and September 6, 2007 (hereinafter referred to as“Period for Request of Exercise”).

(7) Conditions for exercise

In the event of the early redemption of the Bond by the Company or accelerationby the Company related to the Bond based on (ii) or (iii) of Item (6) of
Paragraph 8, the Equity Warrant shall not be exercised on or after the date ofredemption or the date of acceleration. In the event of the early redemption of
the Bond by the Company at the request of the bondholder of the Bonds withequity warrants as set out in (iv) of Item (6) of Paragraph 8, the Equity Warrant
shall not be partially exercised after the Bonds with equity warrants arepresented to the place of the payment of redemption money.

(8) Change of Conversion Price(i) On or after April 1, 2006, the Conversion Price shall be changed to an amountequivalent to 92% of the average of every day’s closing price for ordinarytransactions of the common shares of the Company on the Tokyo Stock
Exchange for five consecutive business days from the business day
following the third Friday of every month (hereinafter referred to as the“Date of Determination”) (A business day without closing price shall be
excluded from the five consecutive business days. If the Date of
Determination does not fall into a business day, the five consecutive businessdays shall be five consecutive business days up to a business day
immediately preceding the Date of Determination. This shall hereinafter bereferred to as the “Period for Calculation of Market Price”) to the Date of
Determination (inclusive) (calculated down to the first decimal place, withthe first decimal place rounded up. Hereinafter referred to as “Price at theDate of Determination). However, in April 2006, two days, namely April 7
and April 21 shall become the Date of Determination, and the Conversion
Price shall be changed twice.
(ii) Irrespective of (i) of this Item, if the Company deems it necessary and notifies
the bondholder of the Bonds with equity warrants in advance before March
17, 2006 (inclusive) after the issue of the Bonds with equity warrants(hereinafter referred to as “Prior Notification”), the Conversion Price shall bec copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

3

changed using a method similar to the method set out in (i) of this Item, until
the end of March 2006. In this event, the Conversion Price shall be changed
by deeming the Friday of the week that is two weeks’ after the week including
the date of the Prior Notification as the Date of Determination (if the Friday isa bank holiday, it shall be the immediately preceding bank business day). On
or after April 1, 2006, regardless of the Prior Notification, the Conversion
Price shall be changed as set out in (i) of this Item.
(iii) If there is cause for the adjustment of the Conversion Price as set out in Item(9) of this Paragraph during the Period for Calculation of Market Price, theConversion Price after the change shall be adjusted to a figure which theCompany deems appropriate in accordance with the prospectus of the Bonds
with equity warrants. If, however, as a result of the adjustment, the Price atthe Date of Determination is lower than 1,278 yen (however, on or after
April 10, 2006 this shall be an amount equivalent to 60% of the closing pricefor ordinary transactions of the common shares of the Company on theTokyo Stock Exchange on April 7, 2006 (if there is no closing price on thatdate, this shall be the closing price on the immediately preceding day(calculated down to the first decimal place, with the first decimal placerounded up). This shall hereinafter be referred to as the “Minimum
Conversion Price,” but subject to adjustment as set out in Item (9) of thisParagraph.), the Conversion Price after the change shall become the
Minimum Conversion Price. If the Price at the Date of Determination ishigher than 4,260 yen (however, on or after April 10, 2006 this shall be an
amount equivalent to 200% of the closing price for ordinary transactions of
the common shares of the Company on the Tokyo Stock Exchange on April
7, 2006 (if there is no closing price on that date, this shall be the closing
price on the immediately preceding day. This shall hereinafter be referred toas the “Maximum Conversion Price,” but subject to adjustment as set out in
Item (9) of this Paragraph.), the Conversion Price after the change shallbecome the Maximum Conversion Price.
(9) Adjustment of the

If the Company issues or disposes of its common shares at an issue price or a

Conversion Pricedisposal price which is lower than the market price of the common shares of
the Company after the issue of the Bonds with equity warrants (however,excluding cases through the conversion or exercise of securities to be converted
or be convertible to the common shares of the Company or equity warrants(including equity warrants attached to bonds with equity warrants) based on
which the Delivery of the common shares of the Company may be demanded),
the Company shall adjust the Conversion Price using the following formula.

c copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

4

Number of newly issued shares or shares disposed of x issue or disposal price per share
Number of outstanding shares＋
Market priceConversion
Price after adjustment＝ Conversion Price before adjustment×
Number of outstanding shares ＋ Number of newly issued shares or shares disposed ofWhen the Company conducts a stock split or reverse stock split of the commonshares of the Company, or issues securities to be converted or convertible to thecommon shares of the Company, equity warrants based on which the Delivery of
the common shares of the Company may be demanded or bonds with equity
warrants, the Company shall adjust the Conversion Price appropriately. For the
purposes of the above formula, the “number of outstanding shares” denotes anumber obtained by deducting the number of the Company’s common shares
held by the Company from the number of common shares of the Company
already issued. In the event of the issue of the common shares of the Company
through stock split, the “number of newly issued or shares disposed of” shall notinclude the number of the common shares of the Company which is allocated to
the Company’s common shares held by the Company as of the date of allocation
to shareholders.
For the purposes of this Item, the “market price” denotes the average of every
day’s closing price (excluding the number of days without closing price) for
ordinary transactions of the common shares of the Company on the Tokyo Stock
Exchange for 30 business days starting from the 45th business day before a datewhen the Conversion Price after adjustment is applied (however, if the Board of
Directors resolves that, on the condition that a profit available for dividend isconverted into capital, the common shares of the Company will be issued
through a stock split using the profit, and a date before the date of the close ofshareholders meeting at which the conversion of the profit available fordividend into capital is resolved becomes the date of allocation to shareholders,
this shall be the date of allocation to shareholders).
(10) Reasons and conditions

Reasons for cancellation shall not be decided.

for cancellation(11) Method for delivery of

The Company shall deliver share certificates without delay after the Request for

Share certificates

Exercise takes effect. However, no share certificates shall be issued for shares
the number of which is less than one stock trade unit.

(12) Starting date of

The dividend of the common shares of the Company delivered as a result of thedividend payment for shares

Request for Exercise and money to be distributed (interim dividend) as provided

delivered through exercise

in Article 293-5 of the Commercial Code shall be paid deeming that the commonshares of the Company were delivered on January 1 if the Request for Exercise
was made between January 1 and June 30, and on July 1 if the Request for
Exercise was made between July 1 and December 31.

(13) Place for receiving

Transfer agent: UFJ Trust Bank, Limited, Securities Agency Division

Request for Exercise

c copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

5

(14) Matters concerning

When the Equity Warrant is exercised as provided in Items 7 and 8 of Paragraph 1

substitutive paymentof Article 341-3 of the Commercial Code, it shall be deemed that it was
requested that the whole amount to be paid at the time of the exercise of theEquity Warrant be paid, and the payment based on the request was made.

8. Matters concerning the bonds(1) Total amount of bonds(2)

Amountofeach

15.0 billion yen
bond

500 million yen, only one typecertificate(3) Interest rate of bonds

No interest shall be paid on the Bond.

(4) Date of redemption

September 7, 2007 (Friday)(5) Amount of redemption

100 yen per 100 yen par value
However, in the event of early redemption, this shall be the amount set out in (ii)to (iv) of Item (6) of this Paragraph.

(6) Method for redemption(i) The total amount of the Bond shall be redeemed on September 7, 2007.
(ii) If the general shareholders meeting of the Company resolves that theCompany will become a wholly-owned subsidiary of another company
through the exchange or transfer of stocks, the Company may redeem inadvance all of the remaining Bonds (redeeming part of the remaining Bonds
shall not be permissible), which are held by the bondholders of the Bonds
with equity warrants, at the following price per 100 yen par value with thePrior Notification which is made between 30 days and 60 days before the dateof redemption before the exchange or transfer of stocks takes effect.
101 yen for the period from September 8, 2005 to September 7, 2006
100 yen for the period from September 8, 2006 to September 6, 2007(iii) The Company may redeem in advance at the option of the Company all of theremaining Bonds (redeeming part of the remaining Bonds shall not be
permissible), which are held by the bondholders of the Bonds with equity
warrants, at a price of 100 yen per 100 yen par value on the third Friday of amonth with the Prior Notification before the first Friday (inclusive) of themonth (if the first Friday is a bank holiday, it shall be the immediately
preceding business day) after the issue of the Bonds with equity warrants.
(iv) The bondholder of the Bonds with equity warrants shall have the right torequest the Company to redeem in advance all or part of the Bonds held by thebondholder at a price of 100 yen per 100 yen par value on the fourth Friday ofthe month with the Prior Notification before the second Friday (inclusive) of
the month (if the second Friday is a bank holiday, it shall be the immediately
preceding business day) by presenting the certificates of the Bonds with equity
warrants to the place of the payment of redemption money set out in Item (12)of this Paragraph.
(v) When the date of redemption set out in this Item is a bank holiday, the datec copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

6

shall be moved up to the immediately preceding business day.
(vi) The Bonds may be purchased or cancelled at any time on or after the day
following the date of issue. However, the Equity Warrant alone may not becancelled. When the Bond is purchased and cancelled, the Company shallrelinquish its rights to the Equity Warrant it acquired.
(7) Form of bond certificate

The form of the bond certificate shall be an unregistered bond certificate.
Either the Bond or the Equity Warrant of the Bonds with equity warrants alone
shall not be transferred as provided in Paragraph 4 of Article 341-2 of theCommercial Code.

(8) Existence or non-existence ofNeither mortgage nor guarantee is provided for the Bonds with equity warrants.

security

There are no assets specially reserved for the Bonds with equity warrants.

(9) Financial special agreement

When the Company establishes a security right for other convertible bonds withequity warrants (including the second and third unsecured convertible bonds withequity warrants, convertible bonds with equity warrants and special agreement onequal priority among bonds) which the Company issues in Japan in the future
after the issue of the Bonds with equity warrants, the Company shall establish asecurity right with equal priority for the Bonds with equity warrants based on the
Mortgage Debentures Trust Law as long as the un-redeemed balance of the Bonds
with equity warrants exists. The convertible bonds with equity warrants shalldenote the convertible bonds with equity warrants provided in Article 341-2 of
the Commercial Code, with respect to which the Board of Directors resolved thatit shall be deemed that, at the time of exercising equity warrants, the bondholdersof bonds with equity warrants requested the payment of the whole amount to be
paid at the time of the exercise of equity warrants in lieu of the redemption of thetotal amount of bond, and the payment was made based on the request inaccordance with the provisions of Items 7 and 8 of Paragraph 1 of Article 341-3
of the Commercial Code.

(10) Rating acquired

No rating shall be acquired.

(11)

The Bonds with equity warrants satisfies the conditions set out in the proviso of

Bondmanagementcompany

Article 297 of the Commercial Code. Therefore, no bond management company
shall be nominated.

(12) Agent for payment of

Nomura Trust and Banking Co., Ltd., Head Officeredemption money (Place of
paymentofredemption

money) )9. Whether an application for

Nillisting is filed or not
10. The above items are conditioned on the notification’s taking effect in accordance with the Securities and Exchange
Law.

II. Second Unsecured Convertible Bonds with Equity Warrants

c copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

71. Name of bond

Second unsecured convertible bonds with equity warrants (unsecured convertible
bonds with equity warrants and special agreement on limited equal priority
among bonds) of GMO Internet, Inc. (hereinafter referred to as “Bonds withequity warrants.” The bond portion thereof shall hereinafter be referred to as“Bonds,” and the equity warrants portion thereof shall hereinafter be referred toas “Equity Warrants.”)

2. Issue price of bond

100 yen per 100 yen par value

3. Issue price of equity warrants

Free

4. Reasons for calculation of

The Equity Warrant is attached to unsecured convertible bonds with equity

the issue price of equity warrants

warrants, and cannot be transferred if detached from the Bond. In addition,(reasons for free issue)

considering that, if the Equity Warrant is exercised, the Bond will be terminatedthrough substitutive payment and thus the Bond is closely connected to theEquity Warrant, and in consideration of economic values to be obtained from thevalue of the Equity Warrant, and the interest rate, issue price and otherconditions for issue of the Bond, it was decided that the Equity Warrant shall be
issued for no consideration.

5. Payment date and the date of

September 7, 2005 (Wednesday)issue
6. Matter about offering(1) Method for offering

Allocation of the whole sum to Nomura Securities Co., Ltd. through private
placement(2) Issue price (offering price)

100 yen per 100 yen par value(3) Deadline for application

September 7, 2005 (Wednesday)(4)

Nomura Securities Co., Ltd., Head Office

Place

for

receiving

applications
7.

Matters

concerning

equitywarrants(1) Type and number of shares

The type of shares as the object of the Equity Warrant shall be the common sharesof the Company. The number of common shares which the Company will issue
in response to a request for the exercise of the Equity Warrant (as defined in
Item (6) of this Paragraph) or the number of the common shares held by theCompany to be transferred in lieu of the issue of new common shares (the issue

shares as the object of equity

or transfer of the common shares of the Company shall hereinafter be referred to

warrants

as “Delivery”) shall be the largest integral number obtained by dividing the total
amount of the issue price of the Bond related to the request for exercise by theconversion price set out in (ii) of Item (3) of this Paragraph (however, if theprice is changed or adjusted as set out in Item (8) or Item (9) of this Paragraph,this shall be the conversion price after change or adjustment). In this event, any
fractional figure of less than one share shall be discarded, and no adjustment inc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

8

cash shall be made.
(2) Total number of equity
warrants

The number of Equity Warrants attached to each Bond shall be one. Twent Equity
Warrants in total shall be issued.

(3) Amount of payment at the(i) The amount to be paid at the time of exercising one Equity Warrant shall betime of exercise andequivalent to the issue price of the Bond.
(ii) The amount per share to be paid at the time of exercising the Equity Warrant

conversion priceshall be 3,000 yen (hereinafter referred to as “Conversion Price”) initially.

(4) Reasons for calculation of

The Bonds with equity warrants are convertible bonds with equity warrants and,of amount of payment attherefore, the amount to be paid at the time of exercising one equity warrant wastime of exercise

decided to be equivalent to the issue price of the Bond. The initial Conversion(Conversion Price)

Price was decided to be 3,000 yen, which is equivalent to 140.85% of theclosing price for ordinary transactions of the common shares of the Company on
the Tokyo Stock Exchange on August 22, 2005.

(5) Amount ofIn the event of the issue of shares arising from the exercise of the Equity Warrant,

capitalization of issue

the amount of capitalization per common share of the Company shall be theprice of new sharesamount obtained by multiplying the issue price of the shares by 0.5. If any
fractional figure of less than one yen is created as a result of the calculation, thefractional figure shall be rounded up.

(6) Period for request of

The bondholder of the Bonds with equity warrants may request the exercise of theexercise

Equity Warrant (hereinafter referred to as “Request for Exercise”) at any time
between September 8, 2005 and September 6, 2007 (hereinafter referred to as“Period for Request of Exercise”).

(7) Conditions for exercise

In the event of the early redemption of the Bond by the Company or accelerationby the Company related to the Bond based on (ii) or (iii) of Item (6) of
Paragraph 8, the Equity Warrant shall not be exercised on or after the date ofredemption or the date of acceleration. In the event of the early redemption of
the Bond by the Company at the request of the bondholder of the Bonds withequity warrants as set out in (iv) of Item (6) of Paragraph 8, the Equity Warrant
shall not be partially exercised after the Bonds with equity warrants arepresented to the place of the payment of redemption money.

(8) Change of Conversion Price(i) On or after April 1, 2006, the Conversion Price shall be changed to an amountequivalent to 92% of the average of every day’s closing price for ordinarytransactions of the common shares of the Company on the Tokyo Stock
Exchange for five consecutive business days from the business day
following the third Friday of every month (hereinafter referred to as the“Date of Determination”) (A business day without a closing price shall be
excluded from the five consecutive business days. If the Date of
Determination does not fall on a business day, the five consecutive businessc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

9

days shall be five consecutive business days up to the business day
immediately preceding the Date of Determination. This shall hereinafter bereferred to as the “Period for Calculation of Market Price”) to the Date of
Determination (inclusive) (calculated down to the first decimal place, withthe first decimal place rounded up. Hereinafter referred to as “Price at theDate of Determination). However, in April 2006, two days, namely April 7
and April 21 shall become the Date of Determination, and the Conversion
Price shall be changed twice.
(ii) Irrespective of (i) of this Item, if the Company deems it necessary and notifies
the bondholder of the Bonds with equity warrants in advance before March
17, 2006 (inclusive) after the issue of the Bonds with equity warrants(hereinafter referred to as “Prior Notification”), the Conversion Price shall bechanged using a method similar to the method set out in (i) of this Item, until
the end of March 2006. In this event, the Conversion Price shall be changed
by deeming the Friday of the week that is two weeks’ after the week including
the date of the Prior Notification as the Date of Determination (if the Friday isa bank holiday, it shall be the immediately preceding bank business day). On
or after April 1, 2006, regardless of the Prior Notification, the Conversion
Price shall be changed as set out in (i) of this Item.
(iii) If there is cause for the adjustment of the Conversion Price as set out in Item(9) of this Paragraph during the Period for Calculation of Market Price, theConversion Price after the change shall be adjusted to a figure which theCompany deems appropriate in accordance with the prospectus of the Bonds
with equity warrants. If, however, as a result of the adjustment, the Price atthe Date of Determination is lower than 1,278 yen (however, on or after
April 10, 2006 this shall be an amount equivalent to 60% of the closing pricefor ordinary transactions of the common shares of the Company on theTokyo Stock Exchange on April 7, 2006 (if there is no closing price on thatdate, this shall be the closing price on the immediately preceding day(calculated down to the first decimal place, with the first decimal placerounded up. This shall hereinafter be referred to as the “Minimum
Conversion Price,” but subject to adjustment as set out in Item (9) of thisParagraph.), the Conversion Price after the change shall become the
Minimum Conversion Price. If the Price at the Date of Determination ishigher than 4,260 yen (however, on or after April 10, 2006 this shall be an
amount equivalent to 200% of the closing price for ordinary transactions of
the common shares of the Company on the Tokyo Stock Exchange on April
7, 2006 (if there is no closing price on that date, this shall be the closing
price on the immediately preceding day. This shall hereinafter be referred toas the “Maximum Conversion Price,” but subject to adjustment as set out inc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

10

Item (9) of this Paragraph.), the Conversion Price after the change shallbecome the Maximum Conversion Price.
(9) Adjustment of the

If the Company issues or disposes of its common shares at an issue price or a

Conversion Pricedisposal price which is lower than the market price of the common shares of
the Company after the issue of the Bonds with equity warrants (however,excluding cases through the conversion or exercise of securities to be converted
or be convertible to the common shares of the Company or equity warrants(including equity warrants attached to bonds with equity warrants) based on
which the Delivery of the common shares of the Company may be demanded),
the Company shall adjust the Conversion Price using the following formula.

Number of newly issued shares or shares disposed of x issue or disposal price per share
Number of outstanding shares＋
Market priceConversion
Price after adjustment＝ Conversion Price before adjustment×
Number of outstanding shares ＋ Number of newly issued shares or shares disposed ofWhen the Company conducts a stock split or reverse stock split of the commonshares of the Company, or issues securities to be converted or convertible to thecommon shares of the Company, equity warrants based on which the Delivery of
the common shares of the Company may be demanded or bonds with equity
warrants, the Company shall adjust the Conversion Price appropriately. For the
purposes of the above formula, the “number of outstanding shares” denotes anumber obtained by deducting the number of the Company’s common shares
held by the Company from the number of common shares of the Company
already issued. In the event of the issue of the common shares of the Company
through stock split, the “number of newly issued or shares disposed of” shall notinclude the number of the common shares of the Company which is allocated to
the Company’s common shares held by the Company as of the date of allocation
to shareholders.
For the purposes of this Item, the “market price” denotes the average of every
day’s closing price (excluding the number of days without closing price) for
ordinary transactions of the common shares of the Company on the Tokyo Stock
Exchange for 30 business days starting from the 45th business day before a datewhen the Conversion Price after adjustment is applied (however, if the Board of
Directors resolves that, on the condition that a profit available for dividend isconverted into capital, the common shares of the Company will be issued througha stock split using the profit, and a date before the date of the close of theshareholders meeting at which the conversion of the profit available for dividends
into capital is resolved becomes the date of allocation to shareholders, this shallbe the date of allocation to shareholders).
(10) Reasons and conditions

Reasons for cancellation shall not be decided.

for cancellationc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

11

(11) Method for delivery of

The Company shall deliver share certificates without delay after the Request for

Share certificates

Exercise takes effect. However, no share certificates shall be issued for shares
the number of which is less than one stock trade unit.

(12) Starting date of

The dividend of the common shares of the Company delivered as a result of thedividend payment for shares

Request for Exercise and money to be distributed (interim dividend) as provided

delivered through exercise

in Article 293-5 of the Commercial Code shall be paid deeming that the commonshares of the Company were delivered on January 1 if the Request for Exercise
was made between January 1 and June 30, and on July 1 if the Request for
Exercise was made between July 1 and December 31.

(13) Place for receiving

Transfer agent: UFJ Trust Bank, Limited, Securities Agency Division

Request for Exercise(14) Matters concerning

When the Equity Warrant is exercised as provided in Items 7 and 8 of Paragraph 1

substitutive paymentof Article 341-3 of the Commercial Code, it shall be deemed that it was
requested that the whole amount to be paid at the time of the exercise of theEquity warrants be paid, and that payment based on the request was made.

8. Matters concerning the bondss(1) Total amount of bonds(2)

Amountofeach

10.0 billion yen
bond

500 million yen, only one typecertificate(3) Interest rate of bonds

No interest shall be paid on the Bond.

(4) Date of redemption

September 7, 2007 (Friday)(5) Amount of redemption

100 yen per 100 yen par value
However, in the event of early redemption, this shall be the amount set out in (ii)to (iv) of Item (6) of this Paragraph.

(6) Method for redemption(i) The total amount of the Bond shall be redeemed on September 7, 2007.
(ii) If the general shareholders meeting of the Company resolves that theCompany will become a wholly-owned subsidiary of another company
through the exchange or transfer of stocks, the Company may redeem inadvance all of the remaining Bonds (redeeming part of the remaining Bonds
shall not be permissible), which are held by the bondholders of the Bonds
with equity warrants, at the following price per 100 yen par value with thePrior Notification which is made between 30 days and 60 days before the dateof redemption before the exchange or transfer of stocks takes effect.
101 yen for the period from September 8, 2005 to September 7, 2006
100 yen for the period from September 8, 2006 to September 6, 2007(iii) The Company may redeem in advance at the option of the Company all of theremaining Bonds (redeeming part of the remaining Bonds shall not be
permissible), which are held by the bondholders of the Bonds with equity
warrants, at a price of 100 yen per 100 yen par value on the third Friday of amonth with the Prior Notification before the first Friday (inclusive) of thec copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

12month (if the first Friday is a bank holiday, it shall be the immediately
preceding business day) after the issue of the Bonds with equity warrants.
(iv) The bondholder of the Bonds with equity warrants shall have the right torequest the Company to redeem in advance all or part of the Bonds held by thebondholder at a price of 100 yen per 100 yen par value on the fourth Friday ofthe month with the Prior Notification before the second Friday (inclusive) of
the month (if the second Friday is a bank holiday, it shall be the immediately
preceding business day) by presenting the certificates of the Bonds with equity
warrants to the place of the payment of redemption money set out in Item (12)of this Paragraph.
(v) When the date of redemption set out in this Item is a bank holiday, the dateshall be moved up to the immediately preceding business day.
(vi) The Bonds may be purchased or cancelled at any time on or after the day
following the date of issue. However, the Equity Warrant alone may not becancelled. When the Bond is purchased and cancelled, the Company shallrelinquish its rights to the Equity Warrant it acquired.
(7) Form of bond certificate

The form of bond certificate shall be an unregistered bond certificate.
Either the Bond or the Equity Warrant of the Bonds with equity warrants alone
shall not be transferred as provided in Paragraph 4 of Article 341-2 of theCommercial Code.

(8) Existence or non-existence ofNeither a mortgage nor guarantee is provided for the Bonds with equity warrants.

security

There are no assets specially reserved for the Bonds with equity warrants.

(9) Financial special agreement

When the Company establishes a security right for other convertible bonds withequity warrants (including the first and third unsecured convertible bonds withequity warrants (convertible bonds with equity warrants and special agreement onequal priority among bonds) which the Company issues in Japan in the future
after the issue of the Bonds with equity warrants, the Company shall establish asecurity right with equal priority for the Bonds with equity warrants based on the
Mortgage Debentures Trust Law, provided the un-redeemed balance of the Bonds
with equity warrants exists. Convertible bonds with equity warrants shall denotethe convertible bonds with equity warrants provided in Article 341-2 of theCommercial Code, with respect to which the Board of Directors resolved that itshall be deemed that, at the time of exercising equity warrants, the bondholders ofbonds with equity warrants requested the payment of the whole amount at thetime of the exercise of equity warrants in lieu of the redemption of the total
amount of bonds, and the payment was made based on the request in accordancewith the provisions of Items 7 and 8 of Paragraph 1 of Article 341-3 of theCommercial Code.

(10) Rating acquired

No rating shall be acquired.

(11)

The Bonds with equity warrants satisfies the conditions set out in the proviso of

Bondmanagementc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

13

company

Article 297 of the Commercial Code. Therefore, no bond management company
shall be nominated.

(12) Agent for payment of

Nomura Trust and Banking Co., Ltd., Head Officeredemption money (Place of
paymentofredemption

money)
9. Whether an application for

Nillisting is filed or not
10. The above items are conditioned on the notification taking effect in accordance with the Securities and Exchange Law.

III. Third Unsecured Convertible Bonds with Equity Warrants

1. Name of bondThird unsecured convertible bonds with equity warrants (unsecured convertible
bonds with equity warrants and special agreement on limited equal priority
among bonds) of GMO Internet, Inc. (hereinafter referred to as “Bonds withequity warrants.” The bond portion thereof shall hereinafter be referred to as the“Bond,” and the equity warrants portion thereof shall hereinafter be referred to as
the “Equity Warrants.”)

2. Issue price of bond

100 yen per 100 yen par value

3. Issue price of equity warrants

Free

4. Reasons for calculation of

The Equity Warrant is attached to unsecured convertible bonds with equity

issue price of equity warrants

warrants, and cannot be transferred if detached from the Bond. In addition,(reasons for free issue)

considering that, if the Equity Warrant is exercised, the Bond will be terminatedthrough substitutive payment and thus the Bond is closely connected to theEquity Warrant, and in consideration of the economic value to be obtained fromthe value of the Equity Warrant, and the interest rate, issue price and otherconditions for issue of the Bond, it was decided that the Equity Warrant shall be
issued for no consideration.

5. Payment date and date of issue

September 7, 2005 (Wednesday)

6. Matters concerning the offering(1) Method for offering

Allocation of the whole sum to Nomura Securities Co., Ltd. through private
placement(2) Issue price (offering price)

100 yen per 100 yen par value(3) Deadline for application

September 7, 2005 (Wednesday)(4)

Nomura Securities Co., Ltd., Head Office

Place

for

receiving

applications
7.

Matters

concerning

equitywarrants(1) Type and number of shares

The type of shares as the object of the Equity Warrant shall be the common sharesof the Company. The number of common shares which the Company will issue

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14

in response to a request for the exercise of the Equity Warrant (as defined in
Item (6) of this Paragraph) or the number of the common shares held by theCompany to be transferred in lieu of the issue of new common shares (the issue
as the object of equity warrants

or transfer of the common shares of the Company shall hereinafter be referred toas “Delivery”) shall be the largest integral number obtained by dividing the total
amount of the issue price of the Bond related to the request for exercise by theconversion price set out in (ii) of Item (3) of this Paragraph (however, if theprice is changed or adjusted as set out in Item (8) or Item (9) of this Paragraph,this shall be the conversion price after change or adjustment). In this event, any
fractional figure of less than one share shall be discarded, and no adjustment incash shall be made.

(2) Total number of equity
warrants

The number of Equity Warrants attached to each Bond shall be one. Twelve
Equity Warrants in total shall be issued.

(3) Amount of payment at(i) The amount to be paid at the time of exercising one Equity Warrant shall betime of exercise andequivalent to the issue price of the Bond.
(ii) The amount per share to be paid at the time of exercising the Equity Warrant

conversion priceshall be 3,000 yen (hereinafter referred to as “Conversion Price”) initially.

(4) Reasons for calculation of

The Bonds with equity warrants are convertible bonds with equity warrants andamount of payment attherefore the amount to be paid at the time of exercising one equity warrant wastime of exercise

decided to be equivalent to the issue price of the Bond. The initial Conversion(Conversion Price)

Price was decided to be 3,000 yen, which is equivalent to 140.85% of theclosing price for ordinary transactions of the common shares of the Company on
the Tokyo Stock Exchange on August 22, 2005.

(5) Amount ofIn the event of the issue of shares arising from the exercise of the Equity

capitalization of issue

Warrants, the amount of capitalization per common share of the Company shallprice of new sharesbe the amount obtained by multiplying the issue price of the shares by 0.5. If any
fractional figure of less than one yen is created as a result of the calculation, thefractional figure shall be rounded up.

(6) Period for request of

The bondholder of the Bonds with equity warrants may request the exercise of theexercise

Equity Warrant (hereinafter referred to as “Request for Exercise”) at any time
between September 8, 2005 and September 6, 2007 (hereinafter referred to as“Period for Request of Exercise”).

(7) Conditions for exercise

In the event of the early redemption of the Bond by the Company or accelerationby the Company related to the Bond based on (ii) or (iii) of Item (6) of
Paragraph 8, the Equity Warrant shall not be exercised on or after the date ofredemption or the date of acceleration. In the event of the early redemption of
the Bond by the Company at the request of the bondholder of the Bonds withequity warrants as set out in (iv) of Item (6) of Paragraph 8, the Equity Warrantc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

15

shall not be partially exercised after the Bonds with equity warrants arepresented to the place of the payment of redemption money.
(8) Change of Conversion Price(i) On or after April 1, 2006, the Conversion Price shall be changed to an amountequivalent to 92% of the average of every day’s closing price for ordinarytransactions of the common shares of the Company on the Tokyo Stock
Exchange for five consecutive business days from the business day
following the third Friday of every month (hereinafter referred to as the“Date of Determination”) (A business day without a closing price shall be
excluded from the five consecutive business days. If the Date of
Determination does not fall on a business day, the five consecutive businessdays shall be five consecutive business days up to the business day
immediately preceding the Date of Determination. This shall hereinafter bereferred to as the “Period for Calculation of Market Price”) to the Date of
Determination (inclusive) (calculated down to the first decimal place, withthe first decimal place rounded up. Hereinafter referred to as “Price at theDate of Determination). However, in April 2006, two days, namely April 7
and April 21 shall become the Date of Determination, and the Conversion
Price shall be changed twice.
(ii) Irrespective of (i) of this Item, if the Company deems it necessary and notifies
the bondholder of the Bonds with equity warrants in advance before March
17, 2006 (inclusive) after the issue of the Bonds with equity warrants(hereinafter referred to as “Prior Notification”), the Conversion Price shall bechanged using a method similar to the method set out in (i) of this Item, until
the end of March 2006. In this event, the Conversion Price shall be changed
by deeming the Friday of the week two weeks’ after the week that includes
the date of the Prior Notification as the Date of Determination (if the Friday isa bank holiday, it shall be the immediately preceding bank business day). On
or after April 1, 2006, irrespective of Prior Notification, the Conversion Priceshall be changed as set out in (i) of this Item.
(iii) If there is cause for the adjustment of the Conversion Price as set out in Item(9) of this Paragraph during the Period for the Calculation of the Market
Price, the Conversion Price after the change shall be adjusted to a figure
deemed appropriate by the Company in accordance with the prospectus of
the Bonds with equity warrants. If, however, as a result of this adjustment,
the Price at the Date of Determination is lower than 1,278 yen (however, onor after April 10, 2006 this shall be an amount equivalent to 60% of theclosing price for ordinary transactions of the common shares of theCompany on the Tokyo Stock Exchange on April 7, 2006 (if there is no
closing price on that date, it shall be the closing price on a day immediately
preceding the date (calculated down to the first decimal place, with the firstc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

16

decimal place rounded up). This shall hereinafter be referred to as the“Minimum Conversion Price,” but subject to adjustment as set out in Item(9) of this Paragraph.), the Conversion Price after the change shall become
the Minimum Conversion Price. If the Price at the Date of Determination ishigher than 4,260 yen (however, on or after April 10, 2006 this shall be an
amount equivalent to 200% of the closing price for ordinary transactions of
the common shares of the Company on the Tokyo Stock Exchange on April
7, 2006 (if there is no closing price on this date, it shall be the closing priceon the immediately preceding day. This shall hereinafter be referred to as the“Maximum Conversion Price,” but subject to the adjustment as set out in
Item (9) of this Paragraph.), the Conversion Price after the change shallbecome the Maximum Conversion Price.
(9) Adjustment of the

If the Company issues or disposes of the common shares of the Company at an

Conversion Priceissue price or a disposal price that is lower than the market price of thecommon shares of the Company after the issue of the Bonds with equity
warrants (however, excluding cases through the conversion or exercise of
securities to be converted or be convertible to common shares of the Company
or equity warrants (including equity warrants attached to bonds with equity
warrants) based on which the Delivery of the common shares of the Company
may be demanded), the Company shall adjust the Conversion Price using thefollowing formula.

Number of newly issued shares or shares disposed of x issue or disposal price per share
Number of outstanding shares＋
Market priceConversion
Price after adjustment＝ Conversion Price before adjustment×
Number of outstanding shares ＋ Number of newly issued shares or shares disposed ofWhen the Company conducts a stock split or reverse stock split of the commonshares of the Company, or issues securities to be converted or convertible tocommon shares of the Company, equity warrants based on which the Delivery of
the common shares of the Company may be demanded or bonds with equity
warrants, the Company shall adjust the Conversion Price appropriately. For the
purposes of the above formula, the “number of outstanding shares” denotes anumber obtained by deducting the number of the Company’s common shares
held by the Company from the number of common shares of the Company
already issued. In the event of the issue of the common shares of the Company
through a stock split, the “number of newly issued or shares disposed of” shallnot include the number of the common shares of the Company which isallocated to the Company’s common shares held by the Company as of the dateof allocation to shareholders.
For the purposes of this Item, the “market price” denotes the average of every
day’s closing price (excluding the number of days without a closing price) forc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

17

ordinary transactions of the common shares of the Company on the Tokyo Stock
Exchange for 30 business days starting from the 45th business day before the day
when the Conversion Price after adjustment applies (however, if the Board of
Directors resolves that, on the condition that a profit available for dividend isconverted into capital, the common shares of the Company will be issued througha stock split using profit, and a day before the day of the close of the shareholders
meeting at which the conversion of the profit available for dividend into capital isresolved becomes the date of allocation to shareholders, this shall be the date ofallocation to shareholders).
(10) Reasons and conditions

Reasons for cancellation shall not be decided.

for cancellation(11) Method for delivery of

The Company shall deliver share certificates without delay after the Request for

Share certificates

Exercise takes effect. However, no share certificates shall be issued for shares
the number of which is less than one stock trade unit.

(12) Starting date of

The dividend on the common shares of the Company delivered as a result of thedividend payment for shares

Request for Exercise and money to be distributed (interim dividend) as provided

delivered through exercise

in Article 293-5 of the Commercial Code shall be paid deeming that the commonshares of the Company were delivered on January 1 if the Request for Exercise
was made between January 1 and June 30, and on July 1 if the Request for
Exercise was made between July 1 and December 31.

(13) Place for receiving

Transfer agent: UFJ Trust Bank, Limited, Securities Agency Division

Request for Exercise(14) Matters concerning

When the Equity Warrant is exercised as provided in Items 7 and 8 of Paragraph 1

substitutive paymentof Article 341-3 of the Commercial Code, it shall be deemed that it was
requested that the whole amount be paid at the time of the exercise of theEquity warrants be paid, and that payment based on this request was made.

8. Matters concerning the bondss(1) Total amount of bonds(2)

Amountofeach

6.0 billion yen
bond

500 million yen, only one typecertificate(3) Interest rate of bonds

No interest shall be paid on the Bond.

(4) Date of redemption

September 7, 2007 (Friday)(5) Amount of redemption

100 yen per 100 yen par value
However, in the event of early redemption, this shall be the amount set out in (ii)to (iv) of Item (6) of this Paragraph.

(6) Method of redemption(i) The total amount of the Bond shall be redeemed on September 7, 2007.
(ii) If a general shareholders meeting of the Company resolves that the Company
will become a wholly-owned subsidiary of another company through theexchange or transfer of stocks, the Company may redeem in advance all of theremaining Bonds (redeeming part of the remaining Bonds shall not bec copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

18permissible), held by the bondholders of the Bonds with equity warrants, atthe following price per 100 yen par value with the Prior Notification madebetween 30 days and 60 days before the date of redemption, before theexchange or transfer of stocks takes effect.
101 yen for the period from September 8, 2005 to September 7, 2006
100 yen for the period from September 8, 2006 to September 6, 2007(iii) The Company may redeem in advance at the option of the Company all of theremaining Bonds (redeeming part of the remaining Bonds shall not be
permissible), which are held by the bondholders of the Bonds with equity
warrants, at a price of 100 yen per 100 yen par value on the third Friday ofthe month with Prior Notification before the first Friday (inclusive) of themonth (if the first Friday is a bank holiday, it shall be the immediately
preceding business day) after the issue of the Bonds with equity warrants.
(iv) The bondholder of the Bonds with equity warrants shall have the right torequest the Company to redeem in advance all or part of the Bonds held by thebondholder at a price of 100 yen per 100 yen par value on the fourth Friday ofthe month with the Prior Notification before the second Friday (inclusive) of
the month (if the second Friday is a bank holiday, it shall be the immediately
preceding business day) by presenting certificates of the Bonds with equity
warrants to the place of payment of the redemption money set out in Item (12)of this Paragraph.
(v) When the date of redemption set out in this Item is a bank holiday, the dateshall be moved up to an immediately preceding business day.
(vi) The Bonds may be purchased or cancelled at any time on or after the day
following the date of issue. However, the Equity Warrant alone may not becancelled. When the Bond is purchased and cancelled, the Company shallrelinquish its rights to the Equity Warrant it acquired.
(7) Form of bond certificate

The form of bond certificate shall be an unregistered bond certificate.
Either the Bond or the Equity Warrant of the Bonds with equity warrants alone
shall not be transferred as provided in Paragraph 4 of Article 341-2 of theCommercial Code.

(8) Existence or non-existence ofNeither mortgage nor guarantee is provided for the Bonds with equity warrants.

security

There are no assets specially reserved for the Bonds with equity warrants.

(9) Financial special agreement

When the Company establishes a security right for other convertible bonds withequity warrants (including the first and second unsecured convertible bonds withequity warrants (convertible bonds with equity warrants and a special agreementon equal priority among bonds) which the Company issues in Japan in the future
after the issue of the Bonds with equity warrants, the Company shall establish asecurity right with equal priority for the Bonds with equity warrants based on the
Mortgage Debentures Trust Law, as long as the un-redeemed balance of thec copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

19

Bonds with equity warrants exists. Convertible bonds with equity warrants shalldenote the convertible bonds with equity warrants provided in Article 341-2 of
the Commercial Code, with respect to which the Board of Directors resolved thatit shall be deemed that, at the time of exercising equity warrants, the bondholdersof bonds with equity warrants requested the payment of the whole amount at thetime of the exercise of equity warrants in lieu of the redemption of the total
amount of the bonds, and payment was made based on the request in accordancewith the provisions of Items 7 and 8 of Paragraph 1 of Article 341-3 of theCommercial Code.
(10) Rating acquired

No rating shall be acquired.

(11)

The Bonds with equity warrants satisfies the conditions set out in the proviso of

Bondmanagementcompany

Article 297 of the Commercial Code. Therefore, no bond management company
shall be nominated.

(12) Agent for payment of

Nomura Trust and Banking Co., Ltd., Head Officeredemption money (Place of
paymentofredemption

money)
9. Whether an application for

Nillisting is filed or not
10. The above items are conditioned on the notification taking effect in accordance with the Securities and Exchange Law.

Endc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

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【Reference】
1. Purpose of use of funds raised(1) Purpose of use of funds raised this time
The approximate net amount of funds raised of 30,800,000,000 yen is planned to be appropriated for theredemption of unsecured bonds of 28,000,000,000 yen, the repayment of short-term borrowings of
2,178,000,000 yen and the expansion of new business in the future requiring funds of 622,000,000 yen.
(2) Change in purpose of use of funds raised previously
There is no applicable item.
(3) Outlook for effect on business results
There is no change in the projected results (on a consolidated and non-consolidated basis) announced on August
15, 2005. We believe that shareholders’ equity will be built up through the conversion into shares in the future,
thereby strengthening the financial position of the Company.

2. Distribution of profits to shareholders, etc.
(1) Basic policy on the distribution of profits and the policy for dividends
The basic policy of the Company is to attach importance to the ongoing payment of stable dividends over thelong term, returning profits based on profitability, and distributing profits while giving consideration to
improving retained earnings to make preparations for the strengthening of the Company’s financial position
and the development of future business.
(2) Dividends paid in the past three accounting terms, etc.
Fiscal 2002

Fiscal 2003

Fiscal 2004

Net profit per share

4.48 yen

20.81 yen

38.75 yen

Annual dividend per share

4.00 yen

6.00 yen

5.00 yen

89.4％

28.8％

12.9％

1.5％

6.4％

19.9％

1.3％

1.8％

2.7％

P a y o u t

r a t i o

Ratio of net profit toshareholders’ equity
Ratio of dividend toshareholders’ equity(Note)1. The ratio of net profit to shareholders’ equity is a figure obtained by dividing net profit by shareholders’equity (an average of opening total shareholders’ equity and closing total shareholders’ equity).
2. The ratio of dividend to shareholders’ equity is a figure obtained by dividing the total amount of annual
dividends by shareholders’ equity (an average of opening total shareholders’ equity and closing total
shareholders’ equity).
3. The Company conducted a 2-to-1 stock split on June 30, 2004.
3. Others(1) Information on dilution due to latent shares, etc.
The ratio of the number of latent shares to the total number of outstanding shares will become 17.3% as a result of thisfinancing, assuming rights are exercised using the initial conversion price. If rights are exercised using the maximum
conversion price or the minimum conversion price, the ratio would be 39.9% or 12.4%, respectively.
(Note) The ratio of the number of latent shares is a figure obtained by dividing the number of shares to be issued if
all of the equity warrants already issued are exercised and the number of shares to be issued if all of theequity warrants of the unsecured convertible bonds with equity warrants to be issued this time are exercisedby the latest total number of outstanding shares.

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21

(2) Past equity financing, etc.
①

Equity financing arranged during the past three years
There is no applicable item.

②

Stock price trends during the past three accounting terms and latest stock priceOpening priceHighest price

Lowest price

Closing priceFiscal 2002

Fiscal 2003

486 yen

6774 yen

714 yen2,260 yen

300 yen

298 yen

350 yen

1,330 yen

Fiscal 2004

Fiscal 2005

1,340 yen

2,405 yen

[2,740 yen]
7,300 yen

3,400 yen

[3,200 yen]
1,340 yen

2,020 yen

[1,370 yen]
5,080 yen

2,130 yen

[2,390 yen]

(Note) 1.
The stock price for fiscal 2005 is the stock price as of August 22, 2005.
2. The Company conducted a 2-to-1 stock split on June 30, 2004. The figures in parenthesis show the stock priceafter the stock split.
③

Trends in the price earnings ratio and return on equity during the past three accounting terms
Fiscal 2002

Fiscal 2003

Fiscal 2004

Price earnings ratio

78.13

63.91

61.67

Return on equity

1.5％

6.4％

19.9％

(Note) The price earnings ratio denotes a figure obtained by dividing the stock price (closing) at the end of theaccounting term by net profit per share for that accounting term.
(3) Others
Restrictions on transfer are expected to be imposed on the bonds with equity warrants in question.
Nomura Securities Co., Ltd., to which the bonds with equity warrants in question will be allocated, will not borrow
shares for the purpose of short selling related to this purchase, with the exception of the sale of shares of the same
issue as the shares to will be acquired as a result of the exercise of equity warrants attached to these bonds withequity warrants, up to the limit of the volume of the shares to be acquired.

4. Parties to which convertible bonds with equity warrants will be allocated and planned amount of allocation
Name of party to be allocatedNomura Securities Co., Ltd.

Allocated convertible bonds with equity warrants (par value)

31,000,000,000 yen in total

Amount of payment

31,000,000,000 yen in total

Party for allocation

Address

1-9-1, Nihonbashi, Chuo-ku Tokyo

Name of representative

Nobuyuki Koga, President

Capital stock

10,000,000,000 yen

Business

Securities business

Large shareholder

Nomura Holdings, Inc. (100%)

with

the

EquityNumber of shares of the party for allocation

Relation which are held by the Company

c copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

22

Nil (as of June 30, 2005)

Number of shares of the Company which areheld for the party for allocation

Nil (as of June 30, 2005)

Trading relationship, etc.

Lead manager securities company

Personnel relationships, etc.

There is no applicable item.

Endc copyright 1995-2005 -- GMO Internet Group -- GMO Internet, Inc. all right reserved.

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