Note: This document has been translated from a part of the Japanese original for reference purposes only. In theevent of any discrepancy between this translated document and the Japanese original, the original shall prevail.

August 9, 2024
Company Name

Restar Corporation(Code: 3156 Tokyo Stock Exchange Prime Market)
Representative

Tomoharu Asaka,
Executive Vice President,
Representative Director

Contact Information

Susumu Nishima,
Senior Corporate Executive Officer(Tel.: +81-3-3458-4618)

Notice Regarding Commencement of Tender Offer for Shares of PCI Holdings, Inc. (Securities
Code: 3918) and Execution of Capital and Business Alliance Agreement with PCI Holdings, Inc.
Restar Corporation (the “Tender Offeror”) hereby announces that, at a meeting of the Board of Directors held on the date of thisnotice, it has resolved to acquire the ordinary shares of PCI Holdings, Inc. (securities code: 3918, listed on the Standard Market of theTokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”); the “Target Company”) (the "Target Company Shares"), through a tender
offer (the "Tender Offer") in accordance with the provisions of the Financial Instruments and Exchange Act (Act No. 25 of 1948,
including subsequent amendments; the “Act”), and to terminate the capital and business alliance agreement executed with the Target
Company on June 27, 2018, and execute a capital and business alliance agreement (the “Capital and Business Alliance Agreement,”
and the capital and business alliance pursuant to the Capital and Business Alliance Agreement is referred to as the “Capital andBusiness Alliance”) as of the date of this notice.
1. Purpose, etc., of the Purchase, etc.
(1) Outline of the Tender Offer
The Tender Offeror resolved, at a meeting of the Board of Directors held on the date of this notice, to acquire the Target
Company Shares, which are listed on the Tokyo Stock Exchange Standard Market, through the Tender Offer, and to terminate
the capital and business alliance agreement executed with the Target Company on June 27, 2018, and execute a new capital andbusiness alliance agreement as of the date of this notice. As of the date of this notice, the Tender Offeror owns 585,000 Target
Company Shares (shareholding ratio (Note 1): 5.83%), but does not own any of the Stock Acquisition Rights (defined below).
For details of the Capital and Business Alliance Agreement, please refer to “(I) Capital and Business Alliance Agreement” in "(6)Material Agreements Regarding the Tender Offer" below.
(Note 1) The "shareholding ratio" refers to the ratio as a percentage of the number of shares calculated based on the total number
of issued shares of the Target Company (10,122,400 shares) as of June 30, 2024, as stated in the “Consolidated Financial
Results for the Nine Months Ended June 30, 2024 [Japanese GAAP]” announced by the Target Company on the dateof this notice (the “Target Company Third Quarter Financial Results”), minus treasury shares held by the Target
Company as of the same date (217,695 shares) (resulting in 9,904,705 shares; the “Total Base Number of Shares”),
plus the number of Target Company Shares (124,400) underlying 964 (Note 2) stock acquisition rights reported as
outstanding by the Target Company as of June 30, 2024 (the “Stock Acquisition Rights”) (resulting in 10,029,105
shares; the “Total Number of Shares Adjusted for Dilutive Shares”) (rounded to two decimal places; hereinafter, thesame applies in calculations of shareholding ratios).
(Note 2) The breakdown of the 964 Stock Acquisition Rights is as follows.
Name of stock acquisition rights

NumberNumber of the Target Company Shares
underlying

Third series of stock acquisition rights

280

56,000 shares

Fourth series of stock acquisition rights

131

13,100 shares

Fifth series of stock acquisition rights

553

55,300 shares

Rights exercise period
November 14, 2021, toNovember 13, 2025
December 8, 2022, toDecember 7, 2026
November 27, 2023, toNovember 26, 2027

In connection with the Tender Offer, on the date of this notice, the Tender Offeror executed tender offer subscription
agreements with (i) Y&U Inc. (number of shares held: 565,800 shares, shareholding ratio: 5.64%; “Y&U”), the third largest
shareholder of the target company and an asset management company of which all issued shares are held by Mr. Toyomi Amano(“Mr. Amano”), the Representative Director and Chairman of the Target Company, as well as its founder, and his relatives, and(ii) Ms. Emi Sekiya (number of shares held: 319,600 shares, shareholding ratio: 3.19%; “Ms. Sekiya”; Y&U and Ms. Sekiya arecollectively referred to as the “Tendering Shareholders”), the fifth largest shareholder of the Target Company. Pursuant to these
agreements, the Tendering Shareholders have agreed to tender in the Tender Offer all Target Company Shares that they own(total: 885,400 shares, shareholding ratio: 8.83%; the “Shares to be Tendered”) (hereinafter, the tender offer subscription
agreement with Y&U is referred to as the “Subscription Agreement (Y&U),” and the tender offer subscription agreement with
Ms. Sekiya is referred to as the “Subscription Agreement (Ms. Sekiya),” and these are referred to collectively as the “Subscription
Agreements”). For details of the Subscription Agreements, please refer to “(II) Subscription Agreement (Y&U)” and “(III)Subscription Agreement (Ms. Sekiya)” in "(6) Material Agreements Regarding the Tender Offer" below.
Since the purpose of the Tender Offer is to make the Target Company a consolidated subsidiary of the Tender Offeror, andbecause the Tender Offeror’s policy is to continue to maintain the listing of the Target Company Shares after the completion of
the Tender Offer, the maximum and minimum limits for the number of shares to be purchased are set at 4,480,000 shares(shareholding ratio: 44.67%), to ensure that the Tender Offeror owns a majority of shares after the completion of the Tender Offer,as the minimum level generally required for the Tender Offeror to make the Target Company a consolidated subsidiary. The
number of Target Company Shares held by the Tender Offeror after the completion of the Tender Offer will be 5,065,000 shares(shareholding ratio: 50.50%).
If the total number of share certificates, etc., tendered in the Tender Offer ("Tendered Share Certificates, etc.") is less than theminimum number of shares to be purchased (4,480,000 shares), not all of the Tendered Share Certificates, etc., will be purchased,etc. If the total number of Tendered Share Certificates, etc., exceeds the maximum number of shares to be purchased (4,480,000
shares), the Tender Offeror will not purchase, etc., all or part of the excess portion, and will instead receive delivery and otherwise
perform settlement for the purchase, etc., of share certificates, etc., by a pro rata method, as provided for in Article 27-13,
paragraph (5) of the Act and Article 32 of the Cabinet Office Order on Disclosure Required for Tender Offer for Share Certificatesby Persons Other Than Issuers (Ministry of Finance Order No. 38 of 1990, including subsequent amendments; the “Cabinet
Office Order”).
Furthermore, according to the "Notice Regarding an Affirmative View Concerning a Tender Offer for Shares of the Company
by Restar Corporation, Expression of Neutrality Concerning Subscription, and Execution of Capital and Business AllianceAgreement with Restar Corporation” announced by the Target Company on the date of this notice (the “Target Company Press
Release”), the Target Company's Board of Directors, at a meeting held on the date of this notice, expressed an affirmative view
toward the Tender Offer and resolved to adopt a neutral position and leave it to the judgment of the Target Company's
2shareholders as to whether or not they should tender their shares in the Tender Offer.
For details of the Target Company's opinion on the Tender Offer and the decision-making process, please refer to the Target
Company Press Release and “(III) Approval of All Directors (Including Audit and Supervisory Committee Members) Without
Special Interests in the Target Company” under “(3) Measures to Ensure the Fairness of the Tender Offer, Including Measures to
Ensure the Fairness of the Tender Offer Price and Measures to Avoid Conflicts of Interest” below.
(2) Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute the Tender Offer, and Management
Policy after the Tender Offer(I) Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute the Tender Offer
With regard to the Tender Offeror, on April 1, 2019, UKC Holdings Corporation (listed on the First Section of the Tokyo
Stock Exchange on October 1, 2009), which was established on October 1, 2009, as a joint holding company through a sharetransfer between USC Corporation and Kyoshin Technosonic Co., Ltd., and Vitec Holdings Co., LTD. integrated their
management and changed their trade name to Restar Holdings Corporation on April 1, 2019. After transferring from the First
Section of the Tokyo Stock Exchange to the Tokyo Stock Exchange Prime Market in April 2022, in accordance with the revisionof the market segments of the Tokyo Stock Exchange, on April 1, 2024, the Tender Offeror conducted an absorption-type merger
with its wholly owned subsidiaries Restar Electronics Corporation, Restar Communications Corporation, and Vitec Enesta Co.,
Ltd., with the Tender Offeror as the surviving company, and changed its company name to Restar Corporation. As of the dateof this notice, the group of the Tender Offeror consists of the Tender Offeror, as well as 49 consolidated subsidiaries, two equity
method affiliates, and one other affiliated company of the Tender Offeror (hereinafter, collectively referred to as the “Tender
Offeror Group”).
Effective April 1, 2024, the Tender Offeror Group reorganized its businesses as a group, which previously consisted of four
segments, namely, the Semiconductor and Electronic Components Business, the Procurement Business, the Electronic
Equipment Business, and the Environmental Energy Business, into two segments: (i) the Devices Business Unit (“Devices BU”)
and (ii) the System Business Unit (“System BU”), as of the date of this notice. The details of each segment are as follows.
(i) Devices BU
・ Devices Business: Sales of semiconductors, electronic components, and related products in Japan and overseas; system
and module proposals that are not sales of individual products but combinations of semiconductors, electronic
components, and related products, such as sensors and LCDs, with a focus on image-related products; provision of highvalue-added solutions utilizing AI (Note 1); provision of technical support and engineering services with a focus on
LCD-related and overseas supplier products, and proposals for optimal supply chain management through global
procurement trading related to electronics and related contract services
・ EMS Business (Note 2): Contracted electronics manufacturing service for electronic components, modules, etc., with
cutting-edge technology, procurement, production management and quality assurance at our factories(ii) System BU・ System Solution Business: Design, construction, and maintenance engineering for solutions for video, audio,
communications, and measurement in various fields, including broadcasting, business, education, medical and life
sciences, public facilities, FA (Note 3), security, and electronic measuring instruments, as well as the development,
manufacture, and sale of payment terminals, security and personal authentication products, and other products that
integrate core technologies such as digital technologies and communications with NFC (Note 4) technologies
・ Eco-solution Business: Community coexistence-based operation and management services for the introduction andspread of renewable energy mainly through in-house solar power plants (in Japan and overseas), sale of electric power,
including renewable energy, to businesses and public institutions, electric power consulting including local production
and consumption of the power for community revitalization, the production and sale of vegetables made in completely
3closed vegetable factories to the commercial market, including convenience stores, supermarkets, and food service
chains, and system consulting(Note 1) "AI" is an abbreviation for “Artificial Intelligence” and refers to computer systems equipped with the functionsof human intelligence, such as learning, reasoning, and judgment.
(Note 2) "EMS" is an abbreviation for "Electronics Manufacturing Services" and refers to contracted services for the
manufacture of electronic equipment.
(Note 3) "FA" is an abbreviation for "Factory Automation" and refers to the automation of factories using sensors,
computer control technology, etc., or the equipment used for automation.
(Note 4) "NFC" is an abbreviation for "Near Field Communication" and refers to short-range wireless communication.
The Tender Offeror Group is pursuing synergies between businesses and active co-creation with external partners, diverse
business development, expansion of technological domains, and the sustainable expansion of scale, in line with its vision of “We
aim to be ‘the Electronics Value Platformer’ that accommodates all manner of stakeholder needs.”, under the mission of “Wehelp society evolve by leveraging information and technology to create and deliver new value and services.”, as set forth in its
Management Philosophy.
As corporate activities are increasingly required to contribute to a sustainable society, the Tender Offeror Group, which is
expanding its business into diverse areas, is committed to further efforts to solve social issues, including the expansion of thegeneration of electricity from renewable energy. In an ever-changing business environment, the Tender Offeror Group aims tobuild a system capable of permanent growth and evolution, and long-term management with an eye on the future. In addition,
on May 28, 2024, the Tender Offeror Group formulated and disclosed its first medium-term management plan, which sets targets
through the fiscal year ending March 31, 2027. In addition to the existing Devices BU and System BU, the Tender Offeror Groupalso aims to establish a management structure based on four business units, through the addition of the new IT & SIer (Note 5)
Business Unit (“IT & SIer BU”) and the Engineering Business Unit (“Engineering BU”), as part of efforts to achieve long-term
growth.
(Note 5) "SIer" is an abbreviation for "System Integrator" and refers to a business entity that undertakes contracted system
integration for clients.
On the other hand, with regard to the Target Company, M&S Co., Ltd. was established in April 2005 and starting with IT
system development, operation, and related information service businesses, expanded its business domains and corporate scaleby establishing multiple companies engaged in information service businesses, making companies into subsidiaries, and merging,etc., with companies in order to expand and stabilize its business. Based on the concept of contributing to society while stabilizing
management and expanding business by strengthening the management foundations and creditworthiness through thecooperation of companies that are small but have strengths in innovative technologies, the Target Company transitioned to a pureholding company in November 2006, and in April 2007, changed its trade name to the current one, PCI Holdings, Inc. At present,
it has established a group management structure in which the Target Company, a pure holding company, supports the businessesof each of its subsidiary operating companies, and each operating company formulates comprehensive strategies and engages inbusiness activities for the services it handles. Subsequently, the Target Company was listed on the Mothers Market of the Tokyo
Stock Exchange in August 2015, changed its market to the First Section of the Tokyo Stock Exchange in September 2016, andhas now transferred to the Tokyo Stock Exchange Standard Market, in accordance with the revision of the market segments of
the Tokyo Stock Exchange.
As of the date of this notice, the Target Company's corporate group is centered on the Target Company, a pure holding
company, and also consists of six consolidated subsidiaries (including three subsidiaries of subsidiaries) (hereinafter, collectively
referred to as the "Target Company Group") engaged in software development, industrial PC design and manufacturing, inhouse solution development and maintenance, semiconductor design and testing, and other information service businesses.
4While respecting the culture and uniqueness of each of its operating companies, the Target Company Group is working to further
enhance its corporate value by leveraging synergy effects across the entire group and responding agilely and flexibly to changes
in the market environment and diversifying social needs.
The Target Company Group has worked to achieve robust organic growth and the expansion of its corporate scale throughM&A since its listing in August 2015. In the fiscal year ended September 30, 2015, when the company listed, consolidated net
sales were 7.8 billion yen, but by the fiscal year ended September 30, 2023, consolidated net sales had grown to 28.4 billion yen(3.6 times the September 2015 level).
Under the Vision Statement of its long-term vision for 2032, “PCI X-formation 2032 (PX2032),” “continue to explore thepossibilities of IT and contribute to the realization of a secure, safe, and prosperous society (i.e., a sustainable society), while also
being a company that constantly adapts to change and grows,” the Target Company Group aims to achieve annual net sales of
50-70 billion yen and establish its corporate brand by increasing its presence in the information service industry. At the sametime, the Target Company Group is also prioritizing its “EBITDA margin” from the perspective of improving the “quality” ofearnings, “ROE (return on equity) and ROIC (return on invested capital)” from the perspective of capital efficiency, and “P/B
ratio (price to book value ratio),” from the perspective of market valuation. In November 2023, the Target Company Group alsoannounced its medium-term management plan “PCI-VISION 2026” (from the fiscal year ending September 30, 2024 to thefiscal year ending September 30, 2026), which outlines a growth strategy to realize the vision of PX2032. Under this plan, theTarget Company Group positions the medium-term management plan period as a second foundational start period, and isaggressively making strategic investments to improve the "quality" of its earnings, with an emphasis on building a foundation
for further growth. As a form of management that is conscious of the cost of capital, the Target Company Group will continue
to focus on achieving return on capital in excess of the cost of capital, with a target ROE of 15% or more for the fiscal year ending
September 30, 2026. In addition, it is targeting a P/B ratio of 2x or more for the fiscal year ending September 30, 2026, as
management that is conscious of the stock price. The P/B ratio is calculated as “ROE × P/E ratio (price-to-earnings ratio),” andin order to improve ROE, the Target Company Group is focusing on improving the “quality” of earnings and implementing
appropriate capital policies and shareholder returns, while also improving the P/E ratio by enhancing IR activities so thatshareholders and investors can understand the Target Company's business and growth potential.
The business environment surrounding the Target Company Group is expected to remain uncertain owing to factors such asincreasingly prolonged and multifaceted geopolitical risks, rapid increases in the prices of energy resources and raw materials,
and rising prices due to the weak yen, while economic activities are expected to normalize as a result of the shift in theclassification of COVID-19 from a Category 2 to a Category 5 disease. In the information service industry, to which the Target
Company Group belongs, IT investment demand, particularly in relation to advanced technologies such as AI and IoT (Note 7),
is expected to remain strong against the backdrop of the accelerated promotion of digitization and DX (Note 6) throughout society
as a whole.
(Note 6) "DX" is an abbreviation for "Digital Transformation" and refers to the creation of new business models and thetransformation of existing businesses through the utilization of data and digital technology.
(Note 7) "IoT" is an abbreviation for "Internet of Things" and refers to the creation of an internet for things.
The capital alliance relationship between the Tender Offeror and the Target Company began with the Target Company's capital
participation in Vitec Vegetable Factory Co., Ltd. (“Vitec Vegetable Factory”), a subsidiary of the Tender Offeror (formerly Vitec
Holdings Co., LTD.) that operates a plant factory business, in April 2018. Subsequently, the Tender Offeror and the Target
Company executed a capital and business alliance agreement on June 27, 2018, and the Tender Offeror acquired 44,300 Target
Company Shares (ratio to the total number of issued shares of the Target Company at that time (4,250,800 shares): 1.04%)
through a negotiated transaction in July 2018. In September 2018, the Tender Offeror transferred to the Target Company a
portion of its shares in VSE Corporation, then a subsidiary of a subsidiary of the Tender Offeror, and in May 2019, the Tender
Offeror transferred to the Target Company a portion of its shares in Infinitech Corporation, then a subsidiary of the Tender
Offeror. As a result, both of these companies became joint ventures of the Tender Offeror and the Target Company. In March of5the same year, the Tender Offeror acquired an additional 44,300 Target Company Shares (ratio to the total number of issued
shares of the Target Company at that time (4,261,200 shares): 1.04%) through a negotiated transaction, resulting in the Tender
Offeror owning 88,600 Target Company Shares (ratio to the total number of issued shares of the Target Company at that time
(4,261,200 shares): 2.08%). Additionally, in November of the same year, the Tender Offeror acquired a portion of the shares of
Syswave Corporation, which was a wholly owned subsidiary of the Target Company, and Syswave Corporation became a joint
venture between the Tender Offeror and the Target Company. Through becoming joint ventures in this way, VSE Corporationand Syswave Corporation began to collaborate mainly in the area of technology in semiconductor-related businesses, and thisled to VSE Corporation conducting an absorption-type merger with Syswave Corporation as the disappearing company, inJanuary 2020, for the purpose of strengthening technological collaboration, and changing its trade name to PRIVATECH Inc.
("PRIVATECH"). The two companies have taken steps to accelerate the creation of synergies, including the provision of highadded value to existing customers of the Tender Offeror and the Target Company, the acquisition of new customers, and theeffective utilization of the resources of both companies, as well as the expansion of IoT/IoE (Note 8) solutions businesses throughthe integration of hardware and software. In April 2020, the Target Company conducted a two-for-one share split, resulting in theTender Offeror owning 177,200 Target Company Shares (ratio to the total number of issued shares of the Target Company atthat time (8,522,400 shares): 2.08%). Subsequently, in January 2021, when the Target Company acquired SORDCORPORATION ("SORD"), a company engaged in the development, design, manufacture, and sale of embedded PC
controllers and peripheral devices, as a means of raising funds, the Target Company resolved to issue new shares by public
offering on May 21, 2021. The Tender Offeror subscribed to 300,000 shares of this public offering (ratio to the total number ofissued shares of the Target Company on the payment date (June 25, 2021) of the capital increase by third-party allotment resolved
at the same time as the new share issuance (10,322,400 shares): 2.91%), resulting in the Tender Offeror owing 477,200 Target
Company Shares (ratio to the total number of issued shares of the Target Company on the payment date (June 25, 2021) of thecapital increase by third-party allotment (10,322,400 shares): 4.62%). Furthermore, the Tender Offeror acquired an additional
60,400 Target Company Shares on March 15, 2022 (ratio to the total number of issued shares of the Target Company at that time
(10,322,400): 0.59%) and an additional 47,400 Target Company Shares on March 18, 2022 (ratio to the total number of issued
shares of the Target Company at that time (10,322,400): 0.46%) through negotiated transactions, resulting in the Tender Offeror
owning 585,000 Target Company Shares (shareholding ratio: 5.83%), and it has since held the same number of shares until thedate of this notice.
(Note 8) "IoE" is an abbreviation for "Internet of Everything" and refers to the connection of everything via the internet.
The Tender Offeror has set forth the following four main specific results it has achieved through the Capital and Business
Alliance with the Target Company to date.
[Specific results of the Capital and Business Alliance](i) Procurement of parts and materials (CPUs (Note 9), etc.) for embedded personal computers and controllers manufactured
by SORD and support for sales expansion mainly to medical institutions, etc., by the Tender Offeror(ii) FAE (Note 10) support by the Target Company for the Tender Offeror's marketing activities to its customers (setmanufacturers, etc.) and technical support, etc., by accepting contracts for development projects from various
manufacturers, etc.
(iii) Technical support, etc., for AI, IoT, etc., for various solutions (automated robots, plant weight estimation, AI security atsolar power plants) provided by the Tender Offeror by PCI Solutions INC. and Institute of PCI Solutions Inc.
(hereinafter, PCI Solutions INC. and Institute of PCI Solutions Inc. are collectively referred to as “PCI Solutions”) or
PRIVATECH(iv) Support by the Target Company for core system development for the Tender Offeror(Note 9) "CPU" is an abbreviation for "Central Processing Unit" and refers to a device that processes and calculates data.
(Note 10) “FAE” is an abbreviation for "Field Application Engineer" and refers to a role that supports sales with technicalexpertise.
6

While the Tender Offeror and the Target Company have both achieved certain results through the Capital and Business
Alliance, as described, the Tender Offeror felt that there was insufficient drive to deepen collaboration and there were limits tothe creation of synergies with the current loose capital relationship, because both companies are different corporate groups, andthe business practices and corporate culture of the Tender Offeror Group, which mainly has a conventional business selling goods,
and the Target Company Group, which mainly provides IT services, are different, and the direction and interests of the twocompanies do not match, meaning that they remain as an extension of each other's business partners. In late April 2024, theTender Offeror decided that in order to further enhance the corporate value of both companies through maximizing synergies
based on accelerating the promotion of business collaboration, it would be necessary to eliminate the differences in businesspractices and corporate culture, which had been an issue, and to align their interests by becoming one and the same corporategroup through the strengthening of the Capital and Business Alliance, and thereby uniting the management resources of bothcompanies and utilizing management resources as one entity, including the Tender Offeror's abundant network of business
partners in the manufacturing industry and other industries, as well as its scale and financial resources.
Based on the above considerations, on May 30, 2024, the Tender Offeror submitted to the Target Company a statement ofintent (the "Statement of Intent") stating its initial intention to (i) hold at least a majority of the voting rights of the Target Company
and make the Target Company a consolidated subsidiary, and (ii) while maintaining the independence of the Target Company,
enhance the corporate value of both companies through deeper business cooperation and collaboration between the twocompanies. Furthermore, the Tender Offeror believed that the following synergies could be realized by making the Target
Company a consolidated subsidiary.
[Synergies from the collaborative relationship after the Tender Offer](i) Expansion of business targeting the manufacturing industry through market deepening/expansion
In addition to deeply tapping the “automotive,” “industrial machinery,” “ICT (Note 11),” and other markets in which
both companies have strengths, expand business by broadening markets with the potential for mutual complementation(overseas, consumer, construction machinery, security, etc.) and by utilizing direct connections to the Tender Offeror'shigh-quality customer base(ii) Expansion of quality and quantity of technical resources
Expand the scale of existing business and technology domains (system architecture, AI, image processing,communications, and others) by increasing the number of engineers, which it is difficult for the companies to make newhires alone(iii) Expansion into SIer upstream processes by strengthening planning and proposal capabilities
Through the achievement of (i) and (ii) above, improve the ability to propose hardware and software solutions developedby both companies and accelerate the development of upstream processes, such as planning and proposals, by increasing
direct business opportunities for customers(iv) Strengthening of management foundations and economies of scale
Business expansion (working capital and growth investment) based on the financial foundations of the Tender Offeror's
net assets on the scale of 90 billion yen, and reduction and compression of various costs through economies of scale(Note 11) "ICT" is an abbreviation for "Information and Communication Technology" and refers to communication thatutilizes information and communication technology.
Additionally, in the Statement of Intent, the Tender Offeror selected the following specific themes and proposed the launch ofa collaborative project directly under the management of both companies in order to ensure the realization of these envisaged
synergies.

7[Collaborative project directly under the management of both companies](i) Reinforcement of systems to expand sales of products handled by SORD, particularly by the Tender Offeror's groupcompanies PALTEK CORPORATION and Restar Embedded Solutions Corporation, which have strengths in theindustrial machinery, medical, and other markets(ii) Strengthen PRIVATECH's business by expanding FAE support to the Devices BU, consolidating semiconductor design andreliability-related businesses, optimally allocating the other businesses of both companies, etc.
(iii) Utilization of PCI Solutions’ technology and promotion of entry into upstream processes through collaboration with the
System BU and businesses related to smart solutions, as well as cooperation with SBI Holdings, Inc. ("SBI Holdings"),
a capital and business alliance partner of the Tender Offeror, and security companies(iv) Creation of the Tender Offeror's platform infrastructure (total investment on the scale of 4 billion yen over five years) andutilization of PCI Solutions' functions through the functions of the Group’s IT division
Subsequently, the Tender Offeror engaged in questions and answers with the Target Company between early and late June
2024 in response to the Statement of Intent, and as part of these questions and answers, in late June 2024, the Tender Offeror
received a reply from the Target Company that deepening business cooperation and collaboration through the Capital andBusiness Alliance with the Tender Offeror could contribute to improving the Target Company's corporate value. In response tothis reply, the Tender Offeror decided to commence preparations for specific procedures to make the Target Company aconsolidated subsidiary of the Tender Offeror through the Tender Offer. In order to prepare for the Tender Offer, in late June 2024,
the Tender Offeror appointed SMBC Nikko Securities Inc. (“SMBC Nikko Securities”), Mori Hamada & Matsumoto, andPlutus Consulting Co., Ltd. (“Plutus Consulting”) as a financial advisor, legal advisor, and third-party valuation institution,
respectively, independent of the Tender Offeror and the Target Company.
From late June to late July 2024, the Tender Offeror conducted due diligence on the Target Company and its subsidiaries, andhas also conducted a series of analyses regarding the nature and probability of synergies expected from the Tender Offeror
making the Target Company its consolidated subsidiary through the Tender Offer. In addition to strengthening the value chain ofexisting businesses through the addition of the Target Company’s semiconductor design and testing business, FAE support,
industrial PC design and manufacturing, etc., the Tender Offeror aims to establish the IT & SIer BU and Engineering BU, and indoing it so, it has confirmed the probability of the creation of synergies, as the information service business of the Target Company,
where it has strengths in software development, solution development and maintenance, etc., has been developed in markets
with high affinity to the Tender Offeror. Based on such reasons, in late July 2024, the Tender Offeror decided that it would bepossible to achieve synergies (i) through (iv) listed above through the collaborative relationship after the Tender Offer. In addition,
the Tender Offeror also judged that an increase in the corporate value of both companies could be expected, partly because it
considered that the Target Company Group could assume the core functions of the IT & SIer BU, which the Tender Offeror aims
to establish as a new business unit in its medium-term management plan, as well as the enhancement of the functions of theEngineering BU.
Based on the above decision, on July 24, 2024, the Tender Offeror, based on the results of an analysis of the value of the Target
Company Shares by Plutus Consulting, a third-party valuation institution independent of the Tender Offeror and the Target
Company, submitted a proposal to the Target Company to: (i) determine a price for the purchase, etc., of Target Company Sharesin the Tender Offer (the “Tender Offer Price”) of 1,170 yen (the price of 1,170 yen proposed as the Tender Offer Price representsa premium of 20.74% (rounded to two decimal places; hereinafter, the same applies to calculations of the premium) to the closing
price of 969 yen of the Target Company Shares on the Tokyo Stock Exchange Standard Market on July 23, 2024, the business
day immediately preceding the date of the proposal, a premium of 20.74% to the simple average closing price of 969 yen(rounded to the nearest whole number; hereinafter, the same applies to calculations of the simple average closing price) of theTarget Company Shares during the period of one month up to and including the same date, a premium of 22.77% to the simple
average closing price of 953 yen for the period of three months up to and including the same date, and a premium of 22.64% to8the simple average closing price of 954 yen for the period of six months up to and including the same date), and (ii) limit the
maximum and minimum number of shares to be purchased to 4,480,000 shares. In response, on July 25, the Tender Offeror
received a request from the Target Company to increase the Tender Offer Price, as it could not assess that the Tender Offer Pricerepresented a sufficient level of premium for the Target Company's common shareholders, although it accepted the maximum
and minimum limits of the number of shares to be purchased. Based on this request, on July 30, the Tender Offeror submitted
another proposal to make the Tender Offer Price 1,210 yen (the price of 1,210 yen proposed as the Tender Offer Price representsa premium of 25.65% to the closing price of 963 yen of the Target Company Shares on the Tokyo Stock Exchange Standard
Market on July 29, 2024, the business day immediately preceding the date of the proposal, a premium of 25.13% to the simple
average closing price of 967 yen of the Target Company Shares during the period of one month up to and including the samedate, a premium of 26.83% to the simple average closing price of 954 yen for the period of three months up to and including thesame date, and a premium of 26.97% to the simple average closing price of 953 yen for the period of six months up to andincluding the same date). In response, on August 1, 2024, the Tender Offeror received a request from the Target Company toincrease the Tender Offer Price, in order to further increase the premium received by common shareholders of the Target
Company. Subsequently, although the Tender Offeror reconsidered this request from the Target Company, based on the fact thatthe price of 1,210 yen that it proposed on July 30 was the maximum price that it could offer taking into consideration information
related to the Target Company and the market environment, on August 2, the Tender Offeror submitted another proposal to theTarget Company for a Tender Offer Price of the same amount as the previous proposal of 1,210 yen (the price of 1,210 yen
proposed as the Tender Offer Price represents a premium of 28.31% to the closing price of 943 yen of the Target Company
Shares on the Tokyo Stock Exchange Standard Market on August 1, 2024, the business day immediately preceding the date of
the proposal, a premium of 25.39% to the simple average closing price of 965 yen of the Target Company Shares during theperiod of one month up to and including the same date, a premium of 26.83% to the simple average closing price of 954 yen forthe period of three months up to and including the same date, and a premium of 27.23% to the simple average closing price of
951 yen for the period of six months up to and including the same date). In response, on August 5, the Target Company responded
that, after serious consideration, given that it was the maximum price the Tender Offeror could offer, the market environment
surrounding the Target Company, and other factors, it had determined that it was not unreasonable for common shareholders of
the Target Company, and ultimately, on the date of this notice, the Tender Offeror and the Target Company reached agreementon the Tender Offer Price of 1,210 yen per share.
In addition, based on the response from the Target Company to the effect that it had judged that the Tender Offer Price was
not unreasonable for common shareholders of the Target Company, on August 6, 2024, the Tender Offeror submitted a proposal
to Y&U to make the Tender Offer Price 1,210 yen (the price of 1,210 yen proposed as the Tender Offer Price represents apremium of 56.13% to the closing price of 775 yen of the Target Company Shares on the Tokyo Stock Exchange Standard
Market on August 5, 2024, the business day immediately preceding the date of the proposal, a premium of 27.10% to the simple
average closing price of 952 yen of the Target Company Shares during the period of one month up to and including the samedate, a premium of 27.23% to the simple average closing price of 951 yen for the period of three months up to and including thesame date, and a premium of 27.64% to the simple average closing price of 948 yen for the period of six months up to andincluding the same date). In response, on August 8, the Tender Offeror received a response from Y&U to the effect that it would
accept the Tender Offer Price, and executed the Subscription Agreement (Y&U) as of the date of this notice. Furthermore,according to Y&U, if the total number of Tendered Share Certificates, etc., in the Tender Offer exceeds the maximum numberof shares to be purchased, Y&U intends to continue to hold any remaining shares in the event that Y&U has shares remaining asa result of the use of the pro rata method.
In addition, on August 7, 2024, the Tender Offeror submitted a proposal to Ms. Sekiya to make the Tender Offer Price 1,210
yen (the price of 1,210 yen proposed as the Tender Offer Price represents a premium of 45.96% to the closing price of 829 yenof the Target Company Shares on the Tokyo Stock Exchange Standard Market on August 6, 2024, the business day immediately
9preceding the date of the proposal, a premium of 27.91% to the simple average closing price of 946 yen of the Target Company
Shares during the period of one month up to and including the same date, a premium of 27.50% to the simple average closing
price of 949 yen for the period of three months up to and including the same date, and a premium of 27.77% to the simple averageclosing price of 947 yen for the period of six months up to and including the same date). In response, on August 8, the Tender
Offeror received a response from Ms. Sekiya to the effect that she would accept the Tender Offer Price, and executed the
Subscription Agreement (Ms. Sekiya) as of the date of this notice. Furthermore, according to Ms. Sekiya, if the total number ofTendered Share Certificates, etc., in the Tender Offer exceeds the maximum number of shares to be purchased, as of the date ofthis notice, Ms. Sekiya has not determined her policy regarding any remaining shares in the event that she has shares remaining
as a result of the use of the pro rata method.
After the above discussion and negotiation, the Tender Offeror, at a meeting of the Board of Directors held on the date of thisnotice, resolved that (i) the Tender Offeror will conduct the Tender Offer with the Tender Offer Price of 1,210 yen, (ii) the Tender
Offeror will execute the Capital and Business Alliance Agreement with the Target Company, and (iii) the Tender Offeror will
execute the Subscription Agreements with the Tendering Shareholders.
(II) Decision-Making Process and Reasons for the Target Company's Support of the Tender Offer
As described in the above “(I) Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute theTender Offer,” on May 30, 2024, the Tender Offeror submitted to the Target Company the Statement of Intent stating the detailsof its proposal, namely its aim to hold at least a majority of the voting rights of the Target Company and make the Target Company
a consolidated subsidiary, and while maintaining the independence of the Target Company, enhance the corporate value of bothcompanies through deeper business cooperation and collaboration between the two companies.
In the course of these discussions and considerations, the Target Company appointed Mizuho Securities Co., Ltd. ("Mizuho
Securities") as a financial advisor independent from the Tender Offeror and Target Company in mid-June 2024, and in late June
2024, it appointed Nagashima Ohno & Tsunematsu as its legal advisor.
In addition, between early and late June 2024, the Target Company engaged in questions and answers with the Tender Offeror
concerning the Statement of Intent, and it judged that creating a capital relationship with the Tender Offeror and deepening
business cooperation and collaboration could contribute to improving the Target Company's corporate value.
Subsequently, based on the judgment that deeper discussions were required concerning expected synergies and corporate
governance, from early July 2024, the Target Company and the Tender Offeror engaged in specific working-level discussions,particularly among officers and employees of corporate planning divisions, and through late July 2024, engaged in a series ofworking-level discussions with the Tender Offeror on initiatives that would contribute to the improvement of the corporate valueof both companies, synergies that could be expected to emerge, etc., as well as corporate governance after the Tender Offer. With
respect to synergies, the Target Company confirmed with the Tender Offeror that in order for both companies to exercise
synergies, it would be essential for the two companies to engage in business on an equal footing while maintaining a spirit ofequality in the field, and to continue to conduct transactions at fair prices and conditions with respect to the procurement ofsemiconductor-related parts and materials, etc., from the Tender Offeror Group and the sale of embedded electronic devices, etc.,
to the Tender Offeror Group. With respect to corporate governance, the Target Company has confirmed with the Tender Offeror
that it will maintain its independence after the Tender Offer, based on the intent of each principle of Japan’s Corporate Governance
Code and other listing rules, etc., established by the Tokyo Stock Exchange. Although the Target Company is expected to becomea subsidiary of the Tender Offeror after the Tender Offer, the Target Company believes that there are no particular disadvantages
to becoming a subsidiary of the Tender Offeror, provided that there are appropriate measures against the "risk of structural andpotential conflicts of interest," which is a common issue in parent-subsidiary listings, the spread of a "spirit and position ofequality" in the field, and governance measures.

10With respect to the conditions of the Tender Offer, on July 24, 2024, the Target Company received a proposal from the Tender
Offeror to (i) make the Tender Offer Price 1,170 yen (the price of 1,170 yen proposed as the Tender Offer Price represents apremium of 20.74% to the closing price of 969 yen of the Target Company Shares on the Tokyo Stock Exchange Standard
Market on July 23, 2024, the business day immediately preceding the date of the proposal, a premium of 20.74% to the simple
average closing price of 969 yen of the Target Company Shares during the period of one month up to and including the samedate, a premium of 22.77% to the simple average closing price of 953 yen for the period of three months up to and including thesame date, and a premium of 22.64% to the simple average closing price of 954 yen for the period of six months up to andincluding the same date), and (ii) limit the maximum and minimum number of shares to be purchased to 4,480,000 shares. In
response, on July 25, the Target Company submitted a request to the Tender Offeror to increase the Tender Offer Price, as it could
not assess that the Tender Offer Price represented a sufficient level of premium for the Target Company's common shareholders,
although it accepted the maximum and minimum limits of the number of shares to be purchased. Subsequently, on July 30, theTarget Company received another proposal from the Tender Offeror to make the Tender Offer Price 1,210 yen (the price of 1,210
yen proposed as the Tender Offer Price represents a premium of 25.65% to the closing price of 963 yen of the Target Company
Shares on the Tokyo Stock Exchange Standard Market on July 29, 2024, the business day immediately preceding the date of the
proposal, a premium of 25.13% to the simple average closing price of 967 yen of the Target Company Shares during the periodof one month up to and including the same date, a premium of 26.83% to the simple average closing price of 954 yen for theperiod of three months up to and including the same date, and a premium of 26.97% to the simple average closing price of 953
yen for the period of six months up to and including the same date). In response, on August 1, 2024, the Target Company
submitted to the Tender Offeror a request to increase the Tender Offer Price, in order to further increase the premium received bycommon shareholders of the Target Company. Subsequently, on August 2, the Target Company received a proposal from theTender Offeror to make the Tender Offer Price 1,210 yen (the price of 1,210 yen proposed as the Tender Offer Price represents apremium of 28.31% to the closing price of 943 yen of the Target Company Shares on the Tokyo Stock Exchange Standard
Market on August 1, 2024, the business day immediately preceding the date of the proposal, a premium of 25.39% to the simple
average closing price of 965 yen of the Target Company Shares during the period of one month up to and including the samedate, a premium of 26.83% to the simple average closing price of 954 yen for the period of three months up to and including thesame date, and a premium of 27.23% to the simple average closing price of 951 yen for the period of six months up to andincluding the same date), as well as information to the effect that the Tender Offeror believed this was the maximum price it
could offer. In response, on August 5, the Target Company responded that, given that the Tender Offer Price of 1,210 yen
proposed by the Tender Offeror on August 2 was the maximum price the Tender Offeror could offer, the market environment,
including the price level of the Target Company Shares up to that date, other conditions related to the Tender Offer, and otherfactors, it had determined that it was not unreasonable for common shareholders of the Target Company, and that it would
proceed with consideration of the Tender Offer based on the assumption that the Tender Offer Price would be 1,210 yen. In
addition, as described in “(II) Announcement of Notice Regarding Expected Recording of Extraordinary Income (Gain on Saleof Investment Securities) and Revision of Consolidated Earnings Forecast for the Full Year Ending September 30, 2024" in "(2)Other Information Deemed Necessary for Investors to Decide Whether to Tender Their Shares, etc." under “4. Other” below, theTarget Company has revised its consolidated earnings forecasts for the fiscal year ending September 30, 2024 (the "Forecast
Revisions") as of the date of this notice. However, when considering the fairness and reasonableness of the Tender Offer Priceof 1,210 yen, which was proposed by the Tender Offeror on August 2, 2024, the Tender Offeror took into account the details of
the Forecast Revisions and the fact that the impact of the Forecast Revisions had not been reflected in the share price prior to thatdate, and thus determined that the Tender Offer Price of 1,210 yen is not disadvantageous to the common shareholders of theTarget Company. Furthermore, the Forecast Revisions were made irrespective of any synergies expected from the Tender Offer.
On that basis, the Target Company has comprehensively considered the various terms and conditions of the Tender Offer,various synergies, including the creation of business opportunities that can be expected from the deepening of the relationshipbetween the Target Company and the Tender Offeror, and other factors, and after careful discussions and consideration, for the11reasons outlined below, the Target Company has determined that the Tender Offer will contribute to the enhancement of theTarget Company's corporate value.
First, under the assumption that the Target Company's management independence will be maintained and the employment
and treatment of its employees will be maintained and improved, the Target Company believes that it can be expected that it will
be able to utilize the Tender Offeror's customer base and business partner base, and thereby improve order efficiency andpurchasing power.
Furthermore, in the information service business, by establishing a business promotion structure centered on the Target
Company within the Tender Offeror Group, the Target Company believes that it will be able to further expand orders by adding
the Tender Offeror Group’s extensive customer and business partner bases to the Target Company Group’s advanced
technological capabilities and abundant experience and expertise in the fields of embedded (industrial) systems for the electricalequipment manufacturing industry and LSI (Note 1) design and testing for the semiconductor manufacturing industry, which are
the core businesses of the Target Company and areas in which the Target Company Group has a competitive edge. Additionally,in the field of business (enterprise) systems, by establishing a business structure centered on the Target Company Group as partof the architecture, maintenance, and operation of the Tender Offeror Group's information systems, the Target Company believes
that it will be able to absorb the operational expertise of the Tender Offeror Group, particularly in the wholesale business, andstrengthen its ability to accept contracts for upstream processes. The Tender Offeror and the Target Company plan to holddiscussions in good faith regarding the establishment of specific measures to transfer the Tender Offeror Group's LSI design,evaluation and quality inspection business to the Target Company Group, and believe that they can expand their cooperative
relationship.
(Note 1) "LSI" is an abbreviation for "Large-Scale Integration" and refers to the integration of many integrated circuits on a single
substrate.
As a result of the above, at a meeting of the Board of Directors of the Target Company held on the date of this notice, as
described in “(III) Approval of All Directors (Including Audit and Supervisory Committee Members) Without Special Interestsin the Target Company” under “(3) Measures to Ensure the Fairness of the Tender Offer, Including Measures to Ensure theFairness of the Tender Offer Price and Measures to Avoid Conflicts of Interest” below, the Target Company resolved to support
the tender offer, by the unanimous votes of all nine Directors of the Target Company without special interests, excluding Mr.
Amano, out of the 10 Directors of the Target Company.
In addition, since a maximum number of shares to be purchased is set for the Tender Offer and the Tender Offeror’s policy is
to continue to maintain the listing of the Target Company Shares after the Tender Offer, the Target Company's shareholders will
have the option to continue to hold their Target Company Shares after the Tender Offer. Accordingly, at the meeting of the Boardof Directors of the Target Company held on the date of this notice, as described in “(III) Approval of All Directors (Including
Audit and Supervisory Committee Members) Without Special Interests in the Target Company” under “(3) Measures to Ensure
the Fairness of the Tender Offer, Including Measures to Ensure the Fairness of the Tender Offer Price and Measures to Avoid
Conflicts of Interest” below, the Target Company resolved to adopt a neutral position and entrust the decision on whether or not
to tender their shares in the Tender Offer to the discretion of the shareholders of the Target Company, by the unanimous votes of
all nine Directors of the Target Company without special interests, excluding Mr. Amano, out of the 10 Directors of the Target
Company. Furthermore, in consideration of the above circumstances, the Target Company has not obtained a valuation reportfrom a third-party valuation institution regarding the valuation of the Target Company Shares.
For details of the decision-making process of the Board of Directors of the Target Company, please refer to “(III) Approval of
All Directors (Including Audit and Supervisory Committee Members) Without Special Interests in the Target Company” under“(3) Measures to Ensure the Fairness of the Tender Offer, Including Measures to Ensure the Fairness of the Tender Offer Priceand Measures to Avoid Conflicts of Interest” below.
12

(III) Management Policy After the Tender Offer
The Tender Offeror intends to maintain the listing of the Target Company Shares on the Tokyo Stock Exchange Standard
Market. Therefore, the Tender Offeror and the Target Company have agreed in the Capital and Business Alliance Agreementthat the Tender Offeror will maintain the management independence of the Target Company as a listed company.
With respect to the composition of the Board of Directors of the Target Company after the Tender Offer, the Tender Offeror
has agreed in the Capital and Business Alliance Agreement that it will have the right to nominate up to two Directors, including
one Executive Director who is not an Audit and Supervisory Committee Member of the Target Company (for details, please see“(I) Capital and Business Alliance Agreement” in “(6) Material Agreements Regarding the Tender Offer” below).
(3) Measures to Ensure the Fairness of the Tender Offer, Including Measures to Ensure the Fairness of the Tender Offer Price andMeasures to Avoid Conflicts of Interest
Although the Tender Offeror owns 585,000 Target Company Shares (shareholding ratio: 5.83%) as of the date of this notice,
the Target Company is not a subsidiary of the Tender Offeror, and the Tender Offer does not constitute a tender offer by acontrolling shareholder. Additionally, there are no plans for direct or indirect investment in the Tender Offeror by all or part of the
management of the Target Company, and the Tender Offer does not constitute a so-called management buyout transaction.
However, as of the date of this notice, the Tender Offeror has executed the Subscription Agreement (Y&U) with Y&U, anasset management company of which all issued shares are held by Mr. Amano, the Representative Director and Chairman of theTarget Company, as well as its founder, and his relatives, and there is a possibility that the interests of Mr. Amano and the Target
Company's minority shareholders may not necessarily align. Accordingly, based on this possibility, the Tender Offeror and theTarget Company will carefully deliberate the Tender Offer to ensure the fairness of the Tender Offer, and have also taken thefollowing measures to eliminate arbitrariness in the decision-making process regarding the Tender Offer, ensure fairness,transparency, and objectivity in the decision-making process of the Target Company, and avoid any conflict of interest that may
arise between the Target Company or the Target Company's minority shareholders and the Target Company's Directors.
Furthermore, in the following information, the measures taken by the Target Company are described based on explanations
received from the Target Company.
(I) Acquisition of Valuation Report From Independent Third-Party Valuation Institution by the Tender Offeror
When determining the Tender Offer Price, the Tender Offeror requested that Plutus Consulting, as a third-party valuation
institution independent of the Tender Offeror and the Target Company, calculate the value of the Target Company Shares.
For details, please refer to “(I) Basis of Calculation” and “(II) Background of Calculation” in “(4) Basis, etc., of Calculation ofPrice for the Purchase, etc.” under “2. Outline of the Purchase, etc.” below.
(II) Advice From Independent Legal Advisors of the Target Company
According to the Target Company Press Release, the Target Company has appointed Nagashima Ohno & Tsunematsu as its
legal advisor independent of the Target Company and the Tender Offeror, in order to obtain expert advice on the fairness andlegality of the procedures in the decision-making process regarding the Tender Offer. Nagashima Ohno & Tsunematsu has
provided the Target Company with necessary legal advice with respect to the method and process of decision-making by its
Board of Directors and other points to be noted in the decision-making process regarding the Tender Offer.
(III) Approval of All Directors (Including Audit and Supervisory Committee Members) Without Special Interests in the Target
Company
According to the Target Company Press Release, as described in “(II) Decision-Making Process and Reasons for the Target
Company's Support of the Tender Offer” under “(2) Background, Purpose, and Decision-Making Process Resulting in theDecision to Execute the Tender Offer, and Management Policy after the Tender Offer” above and “(5) Prospects for Delisting
and Reasons Therefor” below, the Target Company has resolved, at a meeting of the Board of Directors of the Target Company
13

held on the date of this notice, to support the Tender Offer, because it has judged that the Tender Offer will contribute to theenhancement of the Target Company's corporate value, based on the expectation that, by establishing a business promotion
structure centered on the Target Company Group within the Tender Offeror Group in the information service business throughthe Tender Offer, while maintaining the independence of the management of the Target Company through keeping the listingof the Target Company Shares, the Target Company will be able to further expand orders by adding the Tender Offeror Group’s
extensive customer and business partner bases to its advanced technological capabilities and abundant experience and expertisein the fields of embedded (industrial) systems for the electrical equipment manufacturing industry and LSI design and testing forthe semiconductor manufacturing industry, which are the core businesses of the Target Company and areas in which the Target
Company Group has a competitive edge, as well as the expectation that, by establishing a business structure centered on theTarget Company Group as part of the architecture, maintenance, and operation of the Tender Offeror Group's information
systems in the field of business (enterprise) systems, the Target Company will be able to absorb the operational expertise of theTender Offeror Group, particularly in the wholesale business, and strengthen its ability to accept contracts for upstream processes.
In addition, as described in “(II) Decision-Making Process and Reasons for the Target Company's Support of the Tender Offer”
under “(2) Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute the Tender Offer, andManagement Policy after the Tender Offer” above and “(5) Prospects for Delisting and Reasons Therefor” below, since a
maximum number of shares to be purchased is set for the Tender Offer and the Tender Offeror’s policy is to continue to maintainthe listing of the Target Company Shares after the Tender Offer, the Target Company's shareholders will have the option tocontinue to hold their Target Company Shares after the Tender Offer. Accordingly, at the meeting of the Board of Directors of
the Target Company held on the date of this notice, the Target Company resolved to adopt a neutral position and entrust thedecision on whether or not to tender their shares in the Tender Offer to the discretion of the shareholders of the Target Company.
Additionally, of the 10 Directors of the Target Company, with respect to Mr. Amano, the Tender Offeror and Y&U, an asset
management company of which all issued shares are held by Mr. Amano and his relatives, executed the Subscription Agreement(Y&U) on the date of this notice, and there is a possibility that the interests of Mr. Amano and the Target Company's minority
shareholders may not necessarily align. Based on this possibility, Mr. Amano did not participate in the deliberations andresolution at the above meeting of the Board of Directors, and the resolution at the above meeting of the Board of Directors was
adopted by the unanimous votes of all nine Directors of the Target Company without special interests, excluding Mr. Amano.
Additionally, all four members of the Audit and Supervisory Committee Members of the Target Company participated in themeeting of the Board of Directors pertaining to the above resolution, and stated that they had no objection to the Target
Company's expression of the above opinion.
(4) Planned Acquisition of Additional Target Company Share Certificates, etc., After the Tender Offer
Since the Tender Offeror will conduct the Tender Offer for the purpose of making the Target Company a consolidated
subsidiary and its policy is to respect the management independence of the Target Company by continuing to maintain the listingof the Target Company Shares even after the completion of the Tender Offer, if the Tender Offeror achieves that purpose throughthe Tender Offer, the Tender Offeror does not currently plan to acquire additional share certificates, etc., of the Target Company
after the Tender Offer. In addition, if the total number of Tendered Share Certificates, etc., exceeds the maximum number ofshares to be purchased and a pro rata method is applied, the Tendering Shareholders will not be able to sell all of their Shares tobe Tendered in the Tender Offer, but the Tender Offeror does not currently plan to acquire any additional Shares to be Tenderedthat could not be sold.
(5) Prospects for Delisting and Reasons Therefor
The Target Company Shares are listed on the Tokyo Stock Exchange Standard Market as of the date of this notice, but theTender Offer is not intended to result in the delisting of the Target Company Shares, and the Tender Offeror has set a maximum
number of shares to be purchased of 4,480,000 shares (shareholding ratio: 44.67%) when conducting the Tender Offer. Therefore,
the number of Target Company Shares to be held by the Tender Offeror after the completion of the Tender Offer is expected to14

be no higher than 5,065,000 shares (shareholding ratio: 50.50%), and therefore, the Target Company Shares are expected toremain listed on the Tokyo Stock Exchange Standard Market after the completion of the Tender Offer.
Furthermore, as of the date of this notice, the Target Company meets all of the criteria for maintaining its listing on the Tokyo
Stock Exchange's Standard Market, and as of March 31, 2024, the Target Company's ratio of shares in circulation was 76.64%(rounded down to two decimal places). Therefore, the Target Company is not expected to violate the Tokyo Stock Exchange's
criteria for maintaining listing on the Tokyo Stock Exchange's Standard Market for the ratio of shares in circulation (25.00% ormore) as a result of the Tender Offer.
(6) Material Agreements Regarding the Tender Offer(I) Capital and Business Alliance Agreement
The Tender Offeror has executed the Capital and Business Alliance Agreement with the Target Company as of the date of thisnotice. The outline of the Capital and Business Alliance Agreement is as follows.
(i) Purpose
・ The purpose of the Capital and Business Alliance Agreement is to ensure that through the Tender Offer and the Capitaland Business Alliance, the Tender Offeror and the Target Company effectively utilize the management resources of bothcompanies while maintaining the Target Company's independence as a listed company, based on the intent of eachprinciple of Japan’s Corporate Governance Code and other listing rules and regulations applicable to companies listedon the Tokyo Stock Exchange Standard Market, while also ensuring that, by promoting and accelerating the creation ofthe "IT & SIer" and "Engineering" business pillars with the Target Company's technological capabilities at their core
based on the Tender Offeror's extensive accounts, scale, financial resources, etc., in manufacturing and other industries,
and thus enhancing scale and profitability (technological capabilities), the companies will pursue further synergies basedon the partnership relationship between the two companies, which has been continuously strengthened in the past, andthereby improve the corporate value of both companies, and ultimately maximize the shareholder returns of bothcompanies, and make both companies into a corporate group that leads the restructuring of the IT industry.
(ii) Matters Concerning the Tender Offer (Note 1)
・ The Tender Offeror shall commence the Tender Offer in accordance with laws, regulations, etc., and the Capital andBusiness Alliance Agreement.
・ If the Tender Offer is to be implemented, the Target Company shall pass a resolution at a meeting of its Board of Directors
to support the Tender Offer (the “Resolution of Support”) and publicly announce the details thereof in accordance with
the Securities Listing Regulations of the Tokyo Stock Exchange. Provided, however, that the Target Company may passa resolution to the effect that it will leave the decision on whether or not to tender shares in the Tender Offer to thediscretion of its shareholders.
・ The Target Company shall maintain the Resolution of Support and shall not revoke or amend the Resolution of Support.
Provided, however, that the Target Company may revoke or amend the Resolution of Support, only (a) in cases when,at least 10 business days prior to the last day of the period for purchase, etc., in the Tender Offer (the "Tender Offer
Period"), the Target Company receives a specific and serious proposal (a “Counterproposal”) concerning a tender offer
for the Target Company Shares for the purpose of making the Target Company a subsidiary or making it private, or atransaction that is inconsistent or conflicts with the Capital and Business Alliance (a “Competing Transaction”), with noviolation of any obligation regarding competing transactions by the Target Company, and (b) despite good faith
discussions between the Tender Offeror and the Target Company regarding a response to the Counterproposal, (c) taking
into consideration the terms of such Counterproposal and the Tender Offer Price and other conditions (including the priceor other conditions after any changes, if the Tender Offeror makes any changes to the Tender Offer Price, the Business
Alliance (as defined below in "(iii) Details of Business Alliance"; hereinafter, the same applies), or other conditions), as
well as any synergies arising from the Business Alliance and all other related factors, the Board of Directors of the Target
15

Company reasonably determines that there is a reasonable possibility that the Target Company's retention of the
Resolution of Support will constitute a breach of its fiduciary duty of loyalty or duty of care as Directors of the Target
Company.
(Note 1) In addition to the above, the Target Company has made pledges, including: (a) the Target Company Group will
execute business operations, etc., within the scope of normal business operations with the due care of a prudent
manager and will not perform certain acts (Note 2) without the advance approval of the Tender Offeror inwriting, during the period lasting until the commencement date of settlement for the Tender Offer; (b) the Target
Company will take all necessary measures to ensure that the Tender Offer does not conflict with Article 166,
paragraph (1) and Article 167, paragraph (1) of the Act; (c) the Target Company will complete all necessary
procedures for the implementation of the Transaction by the day before the commencement date of settlement
for the Tender Offer; (d) if the Target Company receives a proposal for a Competing Transaction, it will
immediately notify the Tender Offeror of that fact and the details of the proposal in writing, and will conduct
discussions in good faith with the Tender Offeror about a response thereto; and (e) the Target Company will
not solicit, provide information on, discuss, negotiate or agree to any Competing Transaction (provided,
however, that if the Target Company receives a Counterproposal directly or indirectly without solicitation,
provision of information, discussion, or negotiation, and, after discussions in good faith with the Tender Offeror
concerning a response to the Counterproposal, the Board of Directors of the Target Company reasonably
determines that the failure to discuss or negotiate in response to such Counterproposal could reasonably
constitute a breach of its fiduciary duty of loyalty or duty of care as Directors of the Target Company, the Target
Company may discuss and negotiate such Counterproposal). In addition, the Tender Offeror has made pledges,
including: (a) by the day prior to the last day of the Tender Offer Period, the Tender Offeror will have received
notification from the Japan Fair Trade Commission that it will not issue a cease and desist order with respect tonotification submitted to the Fair Trade Commission pursuant to the provisions of the Act on Prohibition ofPrivate Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947, including subsequent
amendments; the “Antimonopoly Act”) and that the Tender Offeror will make reasonable efforts to let thewaiting period under the Antimonopoly Act elapse; and (b) the Tender Offeror will take all necessary steps to
implement the Transaction by the day before the commencement date of settlement for the Tender Offer. In
addition, the Tender Offeror and the Target Company have made agreements, including that, if the Tender Offer
takes effect, (a) the Target Company will confirm that it will transfer all of the issued common shares of theTender Offeror it holds to KMF Corporation for 974,750,000 yen, as soon as practically possible after theTender Offer takes effect (by September 27, 2024, or another date separately agreed upon by the Tender Offeror
and the Target Company), and (b) the Target Company will transfer all of the issued shares of Vitec Vegetable
Factory it holds to the Tender Offeror for 100 million yen, the acquisition price when the Target Company
acquired those shares, as soon as practically possible after the Tender Offer takes effect (by September 27, 2024,
or another date separately agreed upon by the Tender Offeror and the Target Company).
(Note 2) (I) Changes to the Articles of Incorporation, (II) issuance, disposal, or granting of shares, etc. (excluding thedisposal of treasury stock owing to the exercise of stock acquisition rights that have already been issued), (III)acquisition or transfer of shares accompanying changes in subsidiaries, (IV) purchase of treasury stock or any
other form of acquisition, (V) stock split or consolidation, or gratis allotment of shares or stock acquisition rights,(VI) distribution or other disposition of surplus (limited to that which exceeds any forecast dividend), (VII)increase or decrease of capital or reserves; (VIII) petition for dissolution, liquidation, or commencement ofbankruptcy proceedings, etc.
(iii) Details of Business Alliance・ The Tender Offeror and the Target Company will enter into a business alliance (the "Business Alliance") as follows.
16

(I) Reinforcement of systems to expand sales of SORD products, particularly by PALTEK CORPORATION and Restar
Embedded Solutions Corporation, which have strengths in the industrial machinery, medical, and other markets(II) Strengthen PRIVATECH's business by expanding FAE support to the Devices BU, consolidating semiconductor
design and reliability-related operations, splitting and integrating businesses, etc.
(III) Utilization of PCI Solutions’ technology and promotion of entry into upstream processes through collaboration with
the System BU and businesses related to smart solutions, as well as cooperation with SBI Holdings and security
companies(IV) Creation of the Restar platform infrastructure and utilization of PCI Solutions' functions through the functions of theGroup’s IT division
・ In the event the Tender Offer takes effect, the two companies shall hold discussions in good faith regarding the conversionof PRIVATECH, a consolidated subsidiary of the Target Company, into a wholly owned subsidiary of the Target
Company, including the specific method and timing, and shall implement such conversion upon agreement.
・ In the event the Tender Offer takes effect, the Tender Offeror and the Target Company shall hold discussions in goodfaith regarding the transfer of the Tender Offeror's own semiconductor design testing business to the Target Company.
・ The Tender Offeror and the Target Company shall create a project structure for the Business Alliance with details to be
separately agreed upon, establish subcommittees for each specific synergy theme, and create a structure in which persons
responsible for each subcommittee report the status of progress, including results and issues, to the person with chief
responsibility for the Business Alliance. The details thereof will be determined by agreement upon separate consultation
between the two companies.
(iv) Independence of the Target Company's Management, etc.
・ The Tender Offeror shall maintain the management independence of the Target Company as a listed company, based on
the intent of each principle of Japan’s Corporate Governance Code and other listing rules, etc., applicable to companies
listed on the Standard Market. Specifically, the Tender Offeror and the Target Company shall take the following measures
to maintain the independence of the management of the Target Company.
(I) Maintain the Independence of Personnel
・ A system shall be established and maintained in which decision-making by the Board of Directors of the Target
Company is not influenced by the will of the Tender Offeror (including, but not limited to, the appointment of at least
one-third of all Directors of the Target Company as independent Outside Directors who are independent from theTender Offeror).
・ With respect to employees seconded from the Tender Offeror to the Target Company and employees concurrently
serving at both the Tender Offeror and the Target Company, the Tender Offeror and the Target Company shall limit
such employees to a certain percentage to be agreed upon by the Tender Offeror and the Target Company from theviewpoint of ensuring the independence of the management of the Target Company.
(II) Maintain Business Independence
・ The Tender Offeror and the Target Company shall set the terms and conditions of business transactions between theTender Offeror Group and the Target Company Group on the basis of arm's length transactions, taking into
consideration the fact that the Target Company is a listed company, and shall consider whether or not to implement
the transactions, taking into account the ratio of transaction dependence, to ensure that the Target Company Group
does not become dependent on transactions with the Tender Offeror Group. In accordance with each principle ofJapan’s Corporate Governance Code and other listing rules, etc., the Tender Offeror and the Target Company shalltake measures to eliminate any conflicts of interest that may arise between them, and take appropriate actions fromthe perspective of protecting the interests of minority shareholders of the Target Company.
・ The Target Company Group shall independently manage lease contracts, systems (excluding consolidated accounting
systems), intellectual property rights, and other expertise necessary for the Target Company Group's business, without
17

relying on the Tender Offeror Group.
・ The Tender Offeror shall maintain the trade names, management principles, product names, brands, etc., of the Target
Company Group, including its subsidiaries.
・ The Tender Offeror and the Target Company intend that the Target Company will continue to conduct its businessindependently as a listed company after the Tender Offer and the Capital and Business Alliance, and each Director
shall be responsible for ensuring that all employees are informed of the fact that the Tender Offeror and the Target
Company will cooperate with each other on an equal footing to conduct the specific transactions assumed in the
Capital and Business Alliance and the Capital and Business Alliance Agreement.
(III) Maintain Financial Independence・ In the event that the Target Company borrows from external financial institutions, etc., the Target Company shallindependently negotiate the terms and conditions, etc., of such borrowing, and the Tender Offeror shall only provide
credit and other support in cases where the Tender Offeror separately agrees.
(v) Appointment of Dispatch Directors, etc.
・ The Tender Offeror shall have the right to nominate (i) up to two Directors, including one Executive Director who is not
an Audit and Supervisory Committee Member of the Target Company, and (ii) up to two Directors at each Target
Company Group company, and the Target Company shall, after the settlement of the Tender Offer, (I) at the Annual
General Meeting of Shareholders of the Target Company for the fiscal year ending September 30, 2024, submit a
resolution for the election of Directors that includes these nominated Directors as candidates, and (II) as soon aspractically possible after the completion of the settlement of the Tender Offer, have each Target Company Group
company other than the Target Company hold a General Meeting of Shareholders and have such nominated Directors
elected. If the Tender Offeror and the Target Company reasonably determine that adding Directors nominated by theTender Offeror or changing the responsibilities of Directors nominated by the Tender Offeror would best enhance thecorporate value of the Target Company, provided that the management independence, etc., of the Target Company ismaintained, the Tender Offeror and the Target Company may, upon mutual agreement, add Directors nominated by theTender Offeror or change the responsibilities of Directors nominated by the Tender Offeror.
・ From the settlement date of the Tender Offer, during the period until a Director nominated by the Tender Offeror iselected as a Director of the Target Company, and during the period until a successor Director nominated by the Tender
Offeror is elected at a General Meeting of Shareholders of the Target Company in the event that a Director nominatedby the Target Company resigns, etc., the Tender Offeror shall have the right to have one such candidate for Director
attend meetings of the Board of Directors and other important meetings of the Target Company as an observer.
・ The Tender Offeror and the Target Company confirm that, provided that the management independence, etc., of theTarget Company is maintained, the Tender Offeror and the Target Company will earnestly discuss the number andresponsibilities of Directors to be nominated by the Tender Offeror and the establishment of other management systems
optimal for improving the Target Company's corporate value, taking into consideration the current selection process for
Director candidates of the Target Company. Furthermore, the Tender Offeror and the Target Company confirm that, inprinciple, they will respect the current management structure of the Target Company until the end of the fiscal year ending
September 30, 2026, the final fiscal year of the medium-term management plan announced by the Target Company,
except for the nomination of Directors by the Tender Offeror, in order to achieve this medium-term management plan.
(vi) Cooperation Related to Maintaining the Ratio of Voting Rights
・ After the completion of the settlement of the Tender Offer, in the event that, for reasons not attributable to any act of theTender Offeror (excluding, however, the disposal of treasury stock held by the Target Company to the extent that theTender Offeror's fully diluted base ratio of voting rights does not fall below a majority, based on the restricted stockcompensation plan for Directors and Corporate Officers of the Target Company Group and the stock option plan for
18

Directors and employees of the Target Company introduced by the Target Company as of the execution date of theCapital and Business Alliance Agreement), there is a possibility that the fully diluted base ratio of voting rights of theTender Offeror will decrease and fall below a majority, the Target Company and the Tender Offeror will discuss in goodfaith the measures necessary for the Target Company to maintain or restore a majority in the Tender Offeror’s fully dilutedbase ratio of voting rights and will cooperate to the maximum extent possible without violating any laws, regulations,etc.
(vii) Right of First Refusal
・ In the event that the Target Company issues, disposes of, or grants shares, etc., the Tender Offeror shall have preferential
rights to subscribe for a number of shares, etc., proportionate to its shareholding ratio in the Target Company Shares.
However, this excludes cases where the Target Company sells treasury stock in cases when a request for the sale of sharesconstituting less than one unit is made, and cases where the Target Company disposes of treasury stock held by the Target
Company to the extent that the Tender Offeror's fully diluted base ratio of voting rights does not fall below a majority,
based on the restricted stock compensation plan for Directors and Corporate Officers of the Target Company Group andthe stock option plan for Directors and employees of the Target Company introduced by the Target Company as of theexecution date of the Capital and Business Alliance Agreement.
(viii) Matters Requiring Advance Approval and Discussion
・ The Target Company must obtain prior approval in writing from the Tender Offeror when deciding or approving certain
matters (Note 3) related to the Target Company Group (provided, however, that the Tender Offeror shall not
unreasonably refuse such approval).
(Note 3) (I) Acquisition or disposal of shares involving a change in subsidiaries or affiliates (excluding, however, minortransactions that do not fall under the timely disclosure standards); (II) acts that fall under or may fall under thedelisting standards or applications for delisting; (III) business alliances that substantially contradict or conflictwith the Business Alliance, or significantly reduce or hinder the effect of the Business Alliance (excluding,however, minor transactions that do not meet the standards for timely disclosure); (IV) organizational changes,
mergers, share exchanges, corporate splits, transfers or acquisitions of all or part of a business, or other similaractions (excluding, however, minor actions that do not meet the standards for timely disclosure)・ The Target Company must conduct prior discussions sincerely and in good faith with the Tender Offeror when deciding
or approving certain matters (Note 4) related to the Target Company Group.
(Note 4) (I) Advance fiscal year plans; (II) the start of large-scale new businesses; (III) material investments and loans;(IV) matters related to the exercise of voting rights at the General Meeting of Shareholders; (V) matters that
could constitute grounds for timely disclosure by the Target Company; (VI) matters that would have a material
effect on the consolidated financial statements of the Tender Offeror; (VII) matters related to the acquisitionand disposal of investment securities (related to cross-shareholdings); and (VIII) serious lawsuits, etc.,
complaints, etc., scandals, etc., and other matters that may damage the credibility of the Tender Offeror Group(ix) Others
・ In addition to the above, the Capital and Business Alliance Agreement includes provisions such as: (a) the Tender Offeror
shall not object to and shall not take any action to prevent the Target Company Group from maintaining the employment
and treatment of the Target Company Group's employees as of the execution date of the agreement as a whole for two
years after the completion of settlement of the Tender Offer, and even after this period has elapsed, the Target Company
Group shall respect the employment and treatment of employees of the Target Company Group as of the execution dateof the agreement as a whole; (b) the Tender Offeror shall consult with the Target Company in advance if the Tender
Offeror intends to acquire additional Target Company Shares after the completion of the settlement of the Tender Offer;19

(c) if the Tender Offeror intends to sell Target Company Shares that it holds after the completion of the settlement of theTender Offer, the Tender Offeror shall, to the extent reasonably possible, notify the Target Company in advance of theoutline of such sale and hold discussions with the Target Company in good faith; (d) after the completion of the settlementof the Tender Offer, if the Tender Offeror intends to acquire any company or business operating in business domains
related to the IT & SIer BU or Engineering BU operated by the Tender Offeror Group, or to implement a material
business alliance or other collaboration related to these businesses, the Tender Offeror shall consult with the Target
Company in advance; (e) provision of information from the Target Company to the Tender Offeror; (f) representations
and warranties (Note 5); and (g) indemnities (Note 6).
(Note 5) Under the Capital and Business Alliance Agreement, the Target Company has made representations andwarranties to the Tender Offeror regarding: (I) its valid establishment and continuance; (II) the authority andimplementation of procedures for the execution and performance of the Capital and Business AllianceAgreement; (III) the enforceability of the Capital and Business Alliance Agreement; (IV) the absence of any
conflict with laws and regulations, etc.; (V) the absence of any bankruptcy proceedings, etc.; (VI) the fact that
it is not classed as an antisocial force and absence of any relationship with antisocial forces; (VII) acquisitionof the necessary permits and approvals, etc., for the execution and performance of the Capital and Business
Alliance Agreement; (VIII) the Target Company Shares, etc.; (IX) the absence of undisclosed material facts;(X) the accuracy of statutory disclosure documents; and (XI) the absence of lawsuits, etc. In addition, the Tender
Offeror has made representations and warranties to the Target Company regarding: (I) its valid establishment
and continuance; (II) the authority and implementation of procedures for the execution and performance of theCapital and Business Alliance Agreement; (III) the enforceability of the Capital and Business AllianceAgreement; (IV) the absence of any conflict with laws and regulations, etc.; (V) the absence of any bankruptcy
proceedings, etc.; and (VI) the fact that it is not classed as an antisocial force and absence of any relationshipwith antisocial forces.
(Note 6) The amount of indemnification, etc., based on any breach of representations and warranties by the Target
Company shall not, in principle, exceed 10% of the amount obtained by multiplying the total Tender Offer
Price by 4,480,000.
(II) Subscription Agreement (Y&U)
The Tender Offeror has executed the Subscription Agreement (Y&U) with Y&U as of the date of this notice, under which
Y&U has agreed to tender all of its Target Company Shares in the Tender Offer. The outline of the Subscription Agreement(Y&U) is as follows. Furthermore, the Tender Offeror has not entered into any agreement with Y&U with respect to the Tender
Offer other than the Subscription Agreement (Y&U), and no benefits will be provided by the Tender Offeror to Y&U other thanthe money to be received from its subscription to the Tender Offer.
The Subscription Agreement (Y&U) stipulates that the tender of all Target Company Shares held by Y&U in the Tender Offeris subject to: (i) the representations and warranties of the Tender Offeror set forth in the Subscription Agreement (Y&U) beingtrue and correct in all material respects; (ii) the obligations to be performed or observed by the Tender Offeror under the
Subscription Agreement (Y&U) being performed and observed in all material respects; and (iii) a resolution of the Board of
Directors of the Target Company expressing its opinion to the effect that it will support the Tender Offer being passed and publicly
announced to that effect, and that expression of opinion not being changed or withdrawn. Provided, however, that Y&U may, atits sole discretion, waive any of these conditions and tender its shares. In addition, under the Subscription Agreement (Y&U),
Y&U shall, from the date of execution of the agreement until the commencement date of settlement of the Tender Offer, refrainfrom transferring, pledging as security, or otherwise disposing of the shares to be tendered, or entering into any other transactionthat would materially conflict with the Tender Offer or make it difficult to execute the Tender Offer, or any agreement relating tosuch transactions, or proposing, soliciting, discussing, negotiating, or providing information in relation to any such proposal.
Additionally, if Y&U receives any information, proposal, solicitation, discussion, or other offer from a third party concerning
20

such transactions, Y&U will promptly notify the Tender Offeror of such fact and the details thereof.
Furthermore, the Subscription Agreement (Y&U) stipulates that Y&U: (i) shall not exercise the right to request the conveningof a General Meeting of Shareholders of the Target Company, the right to submit an agenda item or proposal, voting rights, or
any other shareholder rights against the instructions of the Tender Offeror until the commencement date of settlement of theTender Offer; and (ii) if, after the settlement of the Tender Offer, a General Meeting of Shareholders of the Target Company isheld with a record date for the exercise of rights that is on or before the commencement date of settlement of the Tender Offer,
Y&U shall, in relation to the exercise of voting rights and all other rights for the shares to be tendered at such meeting, at theoption of the Tender Offeror, either (a) exercise such rights entirely in accordance with the Tender Offeror's instructions, or (b)grant a general power of attorney to the Tender Offeror or a person designated by the Tender Offeror by delivering a duly executed
power of attorney signed and sealed by an authorized person, and not revoke such power of attorney.
In addition, the Subscription Agreement (Y&U) provides for representations and warranties (Note) and indemnifications, etc.
(Note) In the Subscription Agreement (Y&U), Y&U has made representations and warranties to the Tender Offeror regarding:(I) the capacity to hold rights, etc.; (II) enforceability; (III) implementation of permits and approvals, etc.; (IV) absenceof conflict with laws and regulations, etc.; (V) absence of bankruptcy proceedings, etc.; (VI) anti-social forces; and (VII)rights for the shares, etc. In addition, the Tender Offeror has made representations and warranties to Y&U regarding: (I)the capacity to hold rights, etc.; (II) enforceability; (III) implementation of permits and approvals, etc.; (IV) absence of
conflict with laws and regulations, etc.; (V) absence of bankruptcy proceedings, etc.; and (VI) anti-social forces.
(III) Subscription Agreement (Ms. Sekiya)
The Tender Offeror has executed the Subscription Agreement (Ms. Sekiya) with Ms. Sekiya as of the date of this notice, underwhich Ms. Sekiya has agreed to tender all of her Target Company Shares in the Tender Offer. The outline of the Subscription
Agreement (Ms. Sekiya) is as follows. Furthermore, the Tender Offeror has not entered into any agreement with Ms. Sekiya withrespect to the Tender Offer other than the Subscription Agreement (Ms. Sekiya), and no benefits will be provided by the Tender
Offeror to Ms. Sekiya other than the money to be received from its subscription to the Tender Offer.
The Subscription Agreement (Ms. Sekiya) stipulates that the tender of all Target Company Shares held by Ms. Sekiya in theTender Offer is subject to: (i) the representations and warranties of the Tender Offeror set forth in the Subscription Agreement(Ms. Sekiya) being true and correct in all material respects; (ii) the obligations to be performed or observed by the Tender Offeror
under the Subscription Agreement (Ms. Sekiya) being performed and observed in all material respects; and (iii) a resolution of
the Board of Directors of the Target Company expressing its opinion to the effect that it will support the Tender Offer being
passed and publicly announced to that effect, and that expression of opinion not being changed or withdrawn. Provided, however,that Ms. Sekiya may, at her sole discretion, waive any of these conditions and tender her shares. In addition, the Subscription
Agreement (Ms. Sekiya) stipulates that if, between the date of execution of the agreement and the expiration date of the Tender
Offer Period, a tender offer for the Target Company Shares other than the Tender Offer is commenced or announced and thepurchase price per Target Company Share for such tender offer exceeds the purchase price per Target Company Share for theTender Offer (or, if the purchase price has been changed, the purchase price after such change), Ms. Sekiya may, after consultingwith the Tender Offeror in good faith, not tender her shares in the Tender Offer, withdraw her tender, or cancel any agreement
regarding the purchase of the shares to be tendered that was concluded as a result of the tender. In addition, under the Subscription
Agreement (Ms. Sekiya), Ms. Sekiya shall, from the date of execution of the agreement until the commencement date ofsettlement of the Tender Offer, refrain from transferring, pledging as security, or otherwise disposing of the shares to be tendered,or entering into any other transaction that would materially conflict with the Tender Offer or make it difficult to execute the Tender
Offer, or any agreement relating to such transactions, or proposing, soliciting, discussing, negotiating, or providing informationin relation to any such proposal. Additionally, if Ms. Sekiya receives any information, proposal, solicitation, discussion, or otheroffer from a third party concerning such transactions, Ms. Sekiya will promptly notify the Tender Offeror of such fact and thedetails thereof.
Furthermore, under the Subscription Agreement (Ms. Sekiya), Ms. Sekiya is obligated: (i) not to exercise the right to request
21

the convening of a General Meeting of Shareholders of the Target Company, the right to submit an agenda item or proposal,
voting rights, or any other shareholder rights against the instructions of the Tender Offeror until the commencement date ofsettlement of the Tender Offer; and (ii) if, after the settlement of the Tender Offer, a General Meeting of Shareholders of the Target
Company is held with a record date for the exercise of rights that is on or before the commencement date of settlement of theTender Offer, Ms. Sekiya shall, in relation to the exercise of voting rights and all other rights for the shares to be tendered at suchmeeting, at the option of the Tender Offeror, either (a) exercise such rights entirely in accordance with the Tender Offeror's
instructions, or (b) grant a general power of attorney to the Tender Offeror or a person designated by the Tender Offeror bydelivering a duly executed power of attorney signed and sealed by an authorized person, and not revoke such power of attorney.
In addition, the Subscription Agreement (Ms. Sekiya) provides for representations and warranties (Note) and indemnifications,etc.
(Note) In the Tender Agreement (Ms. Sekiya), Ms. Sekiya has made representations and warranties to the Tender Offeror
concerning the capacity to hold rights, etc., the rights for shares, etc. In addition, the Tender Offeror has maderepresentations and warranties to Ms. Sekiya with respect to the capacity to hold rights, etc., and its performance ofpermits and approvals, etc.
2. Outline of the Purchase, etc.
(1) Outline of the Target Company
(I)

Name

PCI Holdings, Inc.

(II)

Location

1-21-19 Toranomon, Minato-ku, Tokyo(III)

Name and Job Title ofRepresentative(IV)

Description of Business

Kunio Yokoyama, Representative Director and President
Engineering Business, Product/Device Business, and ICT Solutions Business(V)

Stated Capital

2,091,897 thousand yen(VI)

Date of Establishment

April 11, 2005

(VII)

Major Shareholders and

The Master Trust Bank of Japan, Ltd. (trust account)

6.12％

Shareholding Ratios

Restar Holdings Corporation

5.91％

Y&U Inc.

5.71％

Employee stock ownership association of PCI Holdings

5.49％

Emi Sekiya

3.23％

Takefumi Oka

2.46％

Mitsubishi Research Institute, Inc.

1.94％

Ueda Yagi Tanshi Co., Ltd.

1.92％

Isao Miyamoto

1.63％

IDEREAS Co.,Ltd.

1.41％(As of March 31, 2024)(VIII)

Relationship Between the Tender Offeror and the Target Company
As of the date of this notice, the Tender Offeror owns 585,000 Target Company
Shares (shareholding ratio: 5.83%), and the Target Company owns 350,000 sharesof the common stock of the Tender Offeror (ownership ratio of voting rights: 1.16%).
Capital

In addition, the Tender Offeror also owns 4,015 shares of the common stock of
PRIVATECH (ownership ratio: 50.00%), a consolidated subsidiary of the Target
Company. In addition, the Target Company owns 10,000 shares of the common
stock of Vitec Vegetable Factory, a consolidated subsidiary of the Tender Offeror
22

(ownership ratio of voting rights: 2.00%).
As of the date of this notice, the Tender Offeror Group has accepted the secondmentof three employees from the Target Company Group. In addition, three Directors
Personnel(including two part-time Directors) and two employees from the Tender Offeror
Group have been seconded to PRIVATECH, a consolidated subsidiary of the Target
Company.
The Tender Offeror has executed the Capital and Business Alliance Agreement with
the Target Company as of the date of this notice. In addition, the Tender Offeror andthe Target Company have the following business relationship.

Business

・ The Tender Offeror Group sells semiconductor-related parts and materials to theTarget Company Group for embedding into electronic devices, etc.
・ The Tender Offeror Group procures embedded electronic devices (PCs/custom
controllers, etc.) from the Target Company Group.

Applicability of related parties(IX)

Not applicable.

Financial Position and Operating Results for the Past Three Years (Consolidated)
Fiscal year-end(millions of yen)

September 30, 2021

September 30, 2022

September 30, 2023

Net assets

7,950

8,374

9,098

Total assets

17,391

16,915

17,627

Net assets per share (yen)741.28771.99852.10Net sales

21,24825,17028,491

Operating profit

1,174

1,445

1,709

Ordinary profit

1,208

1,549

1,774

669

643

1,008

Basic earnings per share (yen)

76.12

63.97

100.09Cash dividends per share (yen)

31

31

33

Profit attributable to owners ofparent(Note) “(VII) Major Shareholders and Shareholding Ratios (as of March 31, 2024)” is based on the “Major Shareholders” in the Target
Company's Quarterly Report for the Second Quarter of the 20th Term filed by the Target Company on May 14, 2024 (the“Target Company's Second Quarter Report”).
(2) Timetable, etc.
(I) Timetable
Date of resolution by the Boardof Directors
Date of public notice ofcommencement of Tender
Offer

Friday, August 9, 2024
Tuesday, August 13, 2024
Electronic public notice will be made and a notice to that effect will be published in the Nihon
Keizai Shimbun.
(Electronic public notice address: https://disclosure2.edinet-fsa.go.jp/)

Filing date of the tender offer
statement

Tuesday, August 13, 2024

(II) Period of the Purchase, etc., at the Time of Initial Filing
Tuesday, August 13, 2024 through Friday, September 20, 2024 (28 business days)

23

(III) Possibility of Extension Based on the Target Company's Request
If the Target Company submits a position statement requesting an extension of the Tender Offer Period pursuant to Article 2710, paragraph (3) of the Act, the Tender Offer Period will last until Wednesday, September 25, 2024 (30 business days).
(3) Price for the Purchase, etc.
1,210 yen per share of common stock(4) Basis, etc., of Calculation of Price for the Purchase, etc.
(I) Basis of Calculation
When determining the Tender Offer Price, the Tender Offeror requested that Plutus Consulting, as a third-party valuation
institution independent of the Tender Offeror and the Target Company, calculate the value of the Target Company Shares.
Furthermore, Plutus Consulting is not a related party of either the Tender Offeror or the Target Company and does not have any
material interest in the Tender Offer.
After considering the calculation method to be adopted when calculating the share value of the Target Company Shares fromamong several share value calculation methods, Plutus Consulting calculated the value of the Target Company Shares using themarket price method, because the Target Company is listed on the Tokyo Stock Exchange Standard Market and a market priceexists for the Target Company Shares; the comparable company comparison method, because there are several listed companies
that can be compared to the Target Company and it is possible to infer the value of the Target Company Shares throughcomparisons with similar companies; and the discounted cash flow method (“DCF method”), in order to reflect the futurebusiness activities of the Target Company in the calculation. The Tender Offeror then obtained a share valuation report (the"Share Valuation Report") on the share value of the Target Company Shares from Plutus Consulting on August 8, 2024.
Furthermore, the Tender Offeror believes that the fairness of the Tender Offer is ensured by the measures set forth in "(3)Measures to Ensure the Fairness of the Tender Offer, Including Measures to Ensure the Fairness of the Tender Offer Price andMeasures to Avoid Conflicts of Interest" in “1. Purpose, etc., of the Purchase, etc.” above, and therefore, the Tender Offeror has
not obtained an opinion on the appropriateness of the Tender Offer Price (fairness opinion) from Plutus Consulting.
The range of per-share values of the Target Company Shares according to Plutus Consulting is as follows.
Market price method: 849 yen to 946 yen
Comparable company comparison method: 857 yen to 1,042 yen
DCF method: 1,128 yen to 1,773 yen
Under the market share price method, with August 8, 2024, as the calculation base date, Plutus Consulting calculated the pershare value of the Target Company Shares as a range from 849 yen to 946 yen, based on the closing price of the Target Company
Shares on the Tokyo Stock Exchange Standard Market on the base date of 849 yen, the simple average of the closing prices forthe last month of 936 yen, the simple average of the closing prices for the last three months of 946 yen, and the simple averageof the closing prices for the last six months of 945 yen.
Under the comparable companies comparison method, Plutus Consulting calculated the per-share value of the Target
Company Shares through comparisons with the market share prices and financial indicators of profitability of listed companies
engaged in businesses similar to those of the Target Company, resulting in a calculation of the per-share value of the Target
Company Shares as a range from 857 yen to 1,042 yen.
Under the DCF method, based on various factors, including the business plan for the period from the fiscal year ending
September 30, 2024, to the fiscal year ending September 30, 2026, which was received from the Target Company and revisedby the Tender Offeror before being provided to Plutus Consulting, as well as publicly available information, Plutus Consulting
analyzed the Target Company's corporate value and equity value by discounting future free cash flows that the Target Company
is expected to generate from the third quarter of the fiscal year ending September 30, 2024, onward by a certain discount rate to24arrive at their present value. As a result, Plutus Consulting calculated the per-share value of the Target Company Shares as arange from 1,128 yen to 1,773 yen. Furthermore, the future financial forecasts of the Target Company, which were used asassumptions in the DCF method, assume significant fluctuations in profit. Specifically, in the fiscal year ending September 30,
2024, the Target Company expects a decrease in profit due partly to the postponement of new projects for which it had planned
to provide services. In addition, in the fiscal year ending September 30, 2025, the Target Company expects an increase in profit
as profits recover from the previous year. The synergies expected to be realized from the execution of the Transaction are notreflected because it is difficult to estimate the specific impact on earnings at this time.
In addition to the valuation results in the Share Valuation Report obtained from Plutus Consulting, the Tender Offeror also
conducted due diligence on the Target Company. As a result, the Tender Offeror comprehensively considered factors such aswhether the Board of Directors of the Target Company would support the Tender Offer, trends in the market share price of theTarget Company Shares, and the prospects for subscriptions to the Tender Offer, and based on the results of discussions andnegotiations with the Target Company, etc., the Board of Directors, at a meeting held on the date of this notice, ultimately
determined that the Tender Offer Price would be 1,210 yen per share.
The Tender Offer Price of 1,210 yen represents a premium of 42.52% to the closing price of 849 yen of the Target Company
Shares on the Tokyo Stock Exchange Standard Market on August 8, 2024, the business day immediately preceding the date of
public announcement concerning the implementation of the Tender Offer, a premium of 29.27% to the simple average closing
price of 936 yen of the Target Company Shares during the period of one month up to and including the same date, a premium of
27.91% to the simple average closing price of 946 yen for the period of three months up to and including the same date, and a
premium of 28.04% to the simple average closing price of 945 yen for the period of six months up to and including the same
date.
(II) Background of Calculation(Background leading to the determination of the Tender Offer Price)
The Tender Offeror has determined the Tender Offer Price in accordance with the following process.
As described in the above “(I) Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute theTender Offer” in “(2) Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute theTender Offer, and Management Policy after the Tender Offer” of “1. Purpose, etc., of the Purchase, etc.,” on July 24, 2024,
the Tender Offeror, based on the results of an analysis of the value of the Target Company Shares by Plutus Consulting, a thirdparty valuation institution independent of the Tender Offeror and the Target Company, submitted a proposal to the Target
Company to: (i) determine the Tender Offer Price of 1,170 yen (the price of 1,170 yen proposed as the Tender Offer Pricerepresents a premium of 20.74% to the closing price of 969 yen of the Target Company Shares on the Tokyo Stock ExchangeStandard Market on July 23, 2024, the business day immediately preceding the date of the proposal, a premium of 20.74% tothe simple average closing price of 969 yen of the Target Company Shares during the period of one month up to and including
the same date, a premium of 22.77% to the simple average closing price of 953 yen for the period of three months up to andincluding the same date, and a premium of 22.64% to the simple average closing price of 954 yen for the period of six months
up to and including the same date), and (ii) limit the maximum and minimum number of shares to be purchased to 4,480,000
shares. In response, on July 25, the Tender Offeror received a request from the Target Company to increase the Tender Offer
Price, as it could not assess that the Tender Offer Price represented a sufficient level of premium for the Target Company's
common shareholders, although it accepted the maximum and minimum limits of the number of shares to be purchased. Basedon this request, on July 30, the Tender Offeror submitted another proposal to make the Tender Offer Price 1,210 yen (the priceof 1,210 yen proposed as the Tender Offer Price represents a premium of 25.65% to the closing price of 963 yen of the Target
Company Shares on the Tokyo Stock Exchange Standard Market on July 29, 2024, the business day immediately preceding
the date of the proposal, a premium of 25.13% to the simple average closing price of 967 yen of the Target Company Shares
during the period of one month up to and including the same date, a premium of 26.83% to the simple average closing price of
954 yen for the period of three months up to and including the same date, and a premium of 26.97% to the simple average25

closing price of 953 yen for the period of six months up to and including the same date). In response, on August 1, 2024, theTender Offeror received a request from the Target Company to increase the Tender Offer Price, in order to further increase thepremium received by common shareholders of the Target Company. Subsequently, although the Tender Offeror reconsidered
this request from the Target Company, based on the fact that the price of 1,210 yen that it proposed on July 30 was the maximum
price that it could offer taking into consideration information related to the Target Company and the market environment, on
August 2, the Tender Offeror submitted another proposal to the Target Company for a Tender Offer Price of the same amountas the previous proposal of 1,210 yen (the price of 1,210 yen proposed as the Tender Offer Price represents a premium of
28.31% to the closing price of 943 yen of the Target Company Shares on the Tokyo Stock Exchange Standard Market on
August 1, 2024, the business day immediately preceding the date of the proposal, a premium of 25.39% to the simple averageclosing price of 965 yen of the Target Company Shares during the period of one month up to and including the same date, apremium of 26.83% to the simple average closing price of 954 yen for the period of three months up to and including the samedate, and a premium of 27.23% to the simple average closing price of 951 yen for the period of six months up to and including
the same date). In response, on August 5, the Target Company responded that, after serious consideration, given that it was the
maximum price the Tender Offeror could offer, the market environment surrounding the Target Company, and other factors,
it had determined that it was not unreasonable for common shareholders of the Target Company, and ultimately, on the date ofthis notice, the Tender Offeror and the Target Company reached agreement on the Tender Offer Price of 1,210 yen per share.
After the above discussion and negotiation, the Tender Offeror, at a meeting of the Board of Directors held on the date of thisnotice, determined that it will conduct the Tender Offer with the Tender Offer Price of 1,210 yen.
(i) Name of Third Party whose Opinion was Sought at the Time of Valuation
When determining the Tender Offer Price, the Tender Offeror referenced the Share Valuation Report provided by Plutus
Consulting, a third-party valuation institution independent of the Tender Offeror and the Target Company. Furthermore,
Plutus Consulting is not a related party of either the Tender Offeror or the Target Company and does not have any materialinterest in the Tender Offer. In addition, the Tender Offeror believes that the fairness of the Tender Offer is ensured by themeasures set forth in "(3) Measures to Ensure the Fairness of the Tender Offer, Including Measures to Ensure the Fairness of
the Tender Offer Price and Measures to Avoid Conflicts of Interest" in “1. Purpose, etc., of the Purchase, etc.” above, andtherefore, the Tender Offeror has not obtained an opinion on the fairness of the Tender Offer Price (fairness opinion) from
Plutus Consulting.
(ii) Summary of Such Opinion
Plutus Consulting calculated the equity value of the Target Company Shares using the market price method, the comparable
company comparison method, and the DCF method, and the range of the equity value per share of the Target Company
Shares calculated using each method is as follows.
Market price method: 849 yen to 946 yen
Comparable company comparison method: 857 yen to 1,042 yen
DCF method: 1,128 yen to 1,773 yen(iii) Process for Determining the Tender Offer Price Based on Such Opinion
In addition to the valuation results in the Share Valuation Report obtained from Plutus Consulting, the Tender Offeror also
conducted due diligence on the Target Company. As a result, the Tender Offeror comprehensively considered factors such aswhether the Board of Directors of the Target Company would support the Tender Offer, trends in the market share price of
the Target Company Shares, and the prospects for subscriptions to the Tender Offer, and based on the results of discussions
and negotiations with the Target Company, etc., the Board of Directors, at a meeting held on the date of this notice, ultimately
determined that the Tender Offer Price would be1,210 yen per share.
26

(III) Relationship with the Valuation Institution
Plutus Consulting, the valuation institution of the Tender Offeror, is not a related party of either the Tender Offeror or the Target
Company and does not have any material interest in the Tender Offer.
(5) Number of Share Certificates, etc., to be Purchased
Number to be purchased

Minimum number to be purchased

4,480,000 shares

Maximum number to be purchased

4,480,000 shares

4,480,000 shares(Note 1) If the total number of Tendered Share Certificates, etc., is less than the minimum number of shares to be purchased (4,480,000
shares), not all of the Tendered Share Certificates, etc., will be purchased, etc. If the total number of Tendered Share
Certificates, etc., exceeds the maximum number of shares to be purchased (4,480,000 shares), the Tender Offeror will notpurchase, etc., all or part of the excess portion, and will instead receive delivery and otherwise perform settlement for thepurchase, etc., of share certificates, etc., by a pro rata method, as provided for in Article 27-13, paragraph (5) of the Act andArticle 32 of the Cabinet Office Order.
(Note 2) Shares constituting less than one unit are also subject to the Tender Offer. Furthermore, in the event that shareholders exercise
their right to request the purchase of shares constituting less than one unit in accordance with the Companies Act, the Target
Company may purchase its own shares during the Tender Offer Period in accordance with the procedures set forth in laws
and regulations.
(Note 3) The Tender Offeror does not plan to acquire treasury stock held by the Target Company through the Tender Offer.
(Note 4) Target Company Shares issued or transferred as a result of the exercise of the Stock Acquisition Rights by the last day of theTender Offer Period are also subject to the Tender Offer.
(6) Change in the Ownership Ratio of Share Certificates, etc. as a Result of the Purchase, etc.
Number of voting rights pertaining to sharecertificates, etc., owned by the Tender

5,850

Offeror before the purchase, etc.
Number of voting rights pertaining to sharecertificates, etc., owned by specially related–parties before the purchase, etc.
Number of voting rights pertaining to sharecertificates, etc., to be owned by the Tender

50,650Offeror after the purchase, etc.
Number of voting rights pertaining to sharecertificates, etc., to be owned by specially–related parties after the purchase, etc.
Number of voting rights of all shareholdersof the Target Company(Ownership ratio of share certificates, etc., before thepurchase, etc.: 5.83%)(Ownership ratio of share certificates, etc., before thepurchase, etc.: 0.00%)(Ownership ratio of share certificates, etc., after thepurchase, etc.: 50.50%)(Ownership ratio of share certificates, etc., after thepurchase, etc.: 0.00%)

98,985(Note 1) The "number of voting rights pertaining to share certificates, etc., to be owned by the Tender Offeror after the purchase, etc.”
refers to the number of voting rights obtained by adding the number of voting rights (44,800) pertaining to share certificates,
etc., to be purchased in the Tender Offer (4,480,000 shares) and the “number of voting rights pertaining to share certificates,
etc., owned by the Tender Offeror before the purchase, etc.” (5,850).
(Note 2) The “number of voting rights of all shareholders of the Target Company" refers to the number of voting rights of allshareholders as of March 31, 2024, as stated in the Target Company's Second Quarter Report. However, because sharesconstituting less than one unit (excluding treasury stock held by the Target Company) and Target Company Shares that
may be issued upon exercise of the Stock Acquisition Rights are also subject to purchase, etc., in the Tender Offer, when27

calculating the "ownership ratio of share certificates, etc., after the purchase, etc.," the number of voting rights (100,291)
pertaining to the Total Number of Shares Adjusted for Dilutive Shares (10,029,105 shares) is used as the denominator.
However, if the Stock Acquisition Rights are not exercised by the last day of the Tender Offer Period, the "ownership ratioof share certificates, etc., after the purchase, etc." in relation to the “number of voting rights pertaining to share certificates,
etc., to be owned by the Tender Offeror after the purchase, etc." calculated using the number of voting rights (99,047)
pertaining to the Total Base Number of Shares (9,904,705 shares) as the denominator will be 51.14%.
(Note 3) The "ownership ratio of share certificates, etc., before the purchase, etc." and the "ownership ratio of share certificates, etc.,
after the purchase, etc." are rounded to two decimal places.
(7) Purchase amount

5,421 million yen(Note) The "purchase amount" is the amount obtained by multiplying the number of shares to be purchased in the Tender Offer(4,480,000 shares) by the Tender Offer Price (1,210 yen).
(8) Method of Settlement(I) Name and location of the head office of the securities company, bank, etc., responsible for settlement for the purchase, etc.
SMBC Nikko Securities Inc.
3-3-1 Marunouchi, Chiyoda-ku, Tokyo(II) Settlement Start Date
Friday, September 27, 2024
(Note) If the Target Company submits a position statement requesting an extension of the Tender Offer Period pursuant to
Article 27-10, paragraph (3) of the Act, this date shall be Wednesday, October 2, 2024.
(III) Method of Settlement
After the end of the Tender Offer Period, the Tender Offeror will promptly send a written notification of the purchase, etc.,
through the Tender Offer to the addresses or locations of persons who have approved an application for the purchase, etc., ofshare certificates, etc., under the Tender Offer or who have applied for the sale, etc., thereof (the "Tendering Shareholders, etc.")(in the case of foreign shareholders, etc., their standing proxy). For applications submitted via online trading(https://trade.smbcnikko.co.jp/), delivery will be made by electromagnetic means.
Purchases will be made in cash. The Tender Offer Agent will, in accordance with the instructions of the Tendering
Shareholders, etc. (or the standing proxy in the case of foreign shareholders, etc.), remit consideration for the sale of the purchased
share certificates, etc., to the place designated by the Tendering Shareholders, etc. (or the standing proxy in the case of foreign
shareholders, etc.) without delay after the settlement commencement date.
(IV) Method of Return of Share Certificates, etc.
If the Tender Offeror will not purchase all or part of the Tendered Share Certificates, etc., under the conditions set forth in "(I)Existence and Details of Conditions Set Forth in Each Item of Article 27-13, Paragraph (4) of the Act" or "(II) Conditions forWithdrawal, etc., of the Tender Offer, Details Thereof, and Method of Disclosure of Withdrawal, etc." in "(9) Other Conditions
and Methods of Purchase, etc." below, the Tender Offer Agent will return any share certificates, etc., required to be returned, twobusiness days after the final day of the Tender Offer Period (in the event of withdrawal, etc., of the Tender Offer, the date ofwithdrawal, etc.) in the state they were in when tendered (the state they were in when tendered refers to the state in which theexecution of the order to tender them in the Tender Offer was cancelled) to an account for the Tendering Shareholder at the Tender
Offer Agent.
Furthermore, if a shareholder wishes to transfer share certificates, etc., required to be returned to a financial instruments
business operator other than the Tender Offer Agent, the Tender Offeror requests that they confirm with the head office ordomestic branch of the Tender Offer Agent where they tendered their shares, as the transfer date may differ depending on the28category of the account in which the share certificates, etc., are managed.
(9) Other Conditions and Methods of Purchase, etc.
(I) Existence and Details of Conditions Set Forth in Each Item of Article 27-13, Paragraph (4) of the Act
If the total number of Tendered Share Certificates, etc., is less than the minimum number of shares to be purchased (4,480,000
shares), not all of the Tendered Share Certificates, etc., will be purchased, etc. If the total number of Tendered Share Certificates,
etc., exceeds the maximum number of shares to be purchased (4,480,000 shares), the Tender Offeror will not purchase, etc., allor part of the excess portion, and will instead receive delivery and otherwise perform settlement for the purchase, etc., of sharecertificates, etc., by a pro rata method, as provided for in Article 27-13, paragraph (5) of the Act and Article 32 of the Cabinet
Office Order (if the number of any Tendered Share Certificates, etc., includes a portion that is less than one unit (100 shares), therespective number of Tendered Share Certificates, etc., will be set as the maximum for the number of shares to be purchased as
calculated by the pro rata method).
If the total number of shares to be purchased from each Tendering Shareholder, etc., after rounding the number of sharesconstituting less than one unit resulting from the pro rata calculation, is less than the maximum number of shares to be purchased,
the Tender Offeror will sequentially purchase, etc., one unit of Tendered Share Certificates, etc., from each Tendering Shareholder,etc., beginning with Tendering Shareholders, etc., with the most rounded-down shares, until the maximum number of shares tobe purchased is reached (and up to the number of Tendered Share Certificates, etc., if the purchase, etc., of one additional unit
would result in the purchase of more than the number of Tendered Share Certificates, etc.). However, when purchasing, etc.,
shares from all of multiple Tendering Shareholders, etc., with equal numbers of shares after rounding down by this method, if itwill exceed the maximum number of shares to be purchased, the Tender Offeror will determine the shareholders from which it
will purchase, etc., shares by lottery from among these Tendering Shareholders, etc., to the extent that the number of shares is notless than the maximum number of shares to be purchased.
If the total number of shares to be purchased from each Tendering Shareholder, etc., after rounding the number of sharesconstituting less than one unit resulting from the pro rata calculation, will exceed the maximum number of shares to be purchased,
the Tender Offeror will sequentially reduce the number of shares to be purchased from each Tendering Shareholder, etc., by one
unit, beginning with Tendering Shareholders, etc., with the most rounded-up shares, until a number of shares is reached that is
not lower than the maximum number of shares to be purchased (the number of shares less than one unit if the number of sharesto purchased calculated by the pro rata method includes a portion that is less than one unit). However, when reducing the numberof shares to be purchased from all of multiple Tendering Shareholders, etc., who hold equal numbers of shares after rounding up
via this method, if it would be lower than the maximum number of shares to be purchased, the Tender Offeror will determine theshareholders from which it will reduce the number of shares to be purchased by lottery from among these Tendering Shareholders,etc., to the extent that the number of shares is not less than the maximum number of shares to be purchased.
(II) Conditions for Withdrawal, etc., of the Tender Offer, Details Thereof, and Method of Disclosure of Withdrawal, etc.
The Tender Offeror may withdraw, etc., the Tender Offer if any circumstances arise as set forth in Article 14, paragraph (1),item (i) (a) through (j) and (m) through (s), item (iii) (a) through (h) and (j), item (iv), and Article 14, paragraph (2), items (iii)through (vi) of the Order for Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No. 321 of 1965;
including subsequent amendments; the “Order”). Furthermore, the "facts equivalent to those set forth in sub-items (a) through(i)” set forth in Article 14, paragraph (1), item (iii) (j) of the Order refer to (i) cases where it is found that a statutory disclosure
document submitted by the Target Company in the past contains a false statement with respect to a material matter or omits amaterial statement that should be stated, and (ii) cases where any of the facts listed in (a) through (g) of the same item occur at amaterial subsidiary of the Target Company.
In addition, the Tender Offeror may withdraw, etc., the Tender Offer for not having obtained “permission, etc.” as set forth in
Article 14, paragraph (1), item (iv) of the Order if any of the following cases occur in relation to the advance notification submitted
by the Tender Offeror to the Japan Fair Trade Commission as provided for in Article 10, paragraph (2) of the Antimonopoly Act
29

by the day prior to the expiration date of the Tender Offer Period (including any extensions thereof): (i) if the Tender Offeror
receives advance notification of a cease and desist order from the Japan Fair Trade Commission ordering the disposal of all orpart of the Target Company Shares, or the transfer or other equivalent disposal of its businesses; (ii) if the measures period has
not expired; or (iii) if the Tender Offeror receives a petition for an emergency suspension order from a court as a party that issuspected of violating the provisions of Article 10, paragraph (1) of the Antimonopoly Act.
In the case of withdrawal, etc., electronic public notice will be made and a notice to that effect will be published in the Nihon
Keizai Shimbun. However, if it is difficult to give public notice by the last day of the Tender Offer Period, the Tender Offeror will
make a public announcement by a method stipulated in Article 20 of the Cabinet Office Order and give public notice immediately
thereafter.
(III) Conditions for Lowering the Price for the Purchase, etc., Details Thereof, and Method of Disclosure of Lowering of thePrice
Pursuant to Article 27-6, paragraph (1), item (i) of the Act, if the Target Company takes any of the actions set forth in Article
13, paragraph (1) of the Order during the Tender Offer Period, the Tender Offeror may lower the price for the purchase, etc., in
accordance with the standards set forth in the provisions of Article 19, paragraph (1) of the Cabinet Office Order.
In the case of lowering of the price for the purchase, etc., electronic public notice will be made and a notice to that effect will
be published in the Nihon Keizai Shimbun. However, if it is difficult to give public notice by the last day of the Tender Offer
Period, the Tender Offeror will make a public announcement by a method stipulated in Article 20 of the Cabinet Office Orderand give public notice immediately thereafter.
If the price for the purchase, etc., is lowered, the Tender Offeror will also purchase, etc., any Tendered Share Certificates, etc.,
tendered on or before the date of such public notice at the lowered price for the purchase, etc.
(IV) Matters Concerning the Right of Tendering Shareholders, etc., to Cancel the Agreement
Tendering Shareholders, etc., may cancel agreements relating to the Tender Offer at any time during the Tender Offer Period.
The Tender Offeror requests that any shareholders that wish to cancel the agreement, complete the procedures by the methodof delivery, sending, etc., written notice of the cancellation of the agreement pertaining to the Tender Offer (the "Cancellation
Notice") to the party designated below by no later than 3:30 p.m. on the last day of the Tender Offer Period (however, businesshours differ depending on the branch office; shareholders are requested to check the business hours, etc., of the branch they willuse in advance before completing these procedures). However, when sending a Cancellation Notice, the Cancellation Noticemust arrive at the party designated below by no later than 3:30 p.m. on the last day of the Tender Offer Period (however, businesshours differ depending on the branch office; shareholders are requested to check the business hours, etc., of the branch they willuse in advance before completing these procedures).
Furthermore, the Tender Offeror will not claim any compensation for damages or penalty payment from the Tendering
Shareholders, etc., in connection with the cancellation of the agreement by the Tendering Shareholders, etc. In addition, expenses
required to return the Tendered Share Certificates, etc., shall also be borne by the Tender Offeror. If cancellation is requested, theTendered Share Certificates, etc., will be returned promptly after the completion of the procedures pertaining to the request forcancellation, via the method described in "(IV) Method of Return of Share Certificates, etc." in "(8) Method of Settlement" above.
(V) Method of Disclosure in the Event of a Change in the Conditions, etc., of the Purchase
The Tender Offeror may change the conditions, etc., of the purchase during the Tender Offer Period, except where prohibitedby Article 27-6, paragraph (1) of the Act and Article 13 of the Order.
In the case of changes to the conditions, etc., of the purchase, etc., electronic public notice will be made concerning the detailsof the changes, etc., and notice thereof will be published in the Nihon Keizai Shimbun. However, if it is difficult to give public
notice by the last day of the Tender Offer Period, the Tender Offeror will make a public announcement by a method stipulated
in Article 20 of the Cabinet Office Order and give public notice immediately thereafter.
30

If changes are made to the conditions, etc., of the purchase, the Tender Offeror will also purchase, etc., any Tendered Share
Certificates, etc., tendered on or before the date of such public notice at the changed conditions for the purchase, etc.
(VI) Method of Disclosure in the Event of Submission of an Amended Statement
If the Tender Offeror submits an amended statement to the Director-General of the Kanto Finance Bureau (except for cases
provided for in the proviso of Article 27-8, paragraph (11) of the Act), the Tender Offeror will immediately publicly announce
the contents of the amended statement that relate to the contents of the public notice of the commencement of the Tender Offer
via the methods provided for in Article 20 of the Cabinet Office Order. In addition, the Tender Offeror will also immediately
amend the tender offer explanation and implement the amendment by delivering the amended tender offer explanation to theTendering Shareholders, etc., to whom the tender offer explanation has already been delivered. However, if the scope of
amendment is limited to a small range, the amendment shall be implemented by preparing a document stating the reason for theamendment, the amended matters, and the amended content, and delivering such document to the Tendering Shareholders, etc.
(VII) Method of Disclosure of the Results of the Tender Offer
The results of the Tender Offer will be announced publicly via a method provided for in Article 9-4 of the Order and Article30-2 of the Cabinet Office Order on the day following the last day of the Tender Offer Period.
(VIII) Others
The Tender Offer will not be conducted directly or indirectly in or into the United States, or by the use of the U.S. postal
service or any other method or means of interstate or international commerce (including, but not limited to, telephone, telex,
facsimile, electronic mail, and internet communications), nor through any securities exchange facility in the United States. Shares
may not be tendered in the Tender Offer by any of the above methods or means, or through any of the above facilities, or fromwithin the United States.
In addition, the tender offer statement or related purchase documents pertaining to the Tender Offer will not be sent or
distributed in, to, or from the United States by mail or other method, and such sending or distribution is prohibited. The Tender
Offeror will not accept any tender in the Tender Offer that directly or indirectly violates the above restrictions.
Each party tendering shares in the Tender Offer (or its standing proxy in the case of a foreign shareholder, etc.) is required tomake the following representations and warranties
At either the time of the tendering party’s tendering of shares or the time of sending the application to tender shares in theTender Offer, the tendering party is not located in the United States; the tendering party has not received or sent any informationor documents relating to the Tender Offer in, to, or from the United States; the tendering party has not, directly or indirectly, used
the U.S. postal service or any other method or means of interstate or international commerce (including, but not limited to,telephone, telex, facsimile, electronic mail, and internet communications) or used any securities exchange facility in the UnitedStates in connection with the purchase or the signing or delivery of the application to tender shares in the Tender Offer; and thetendering party is not acting as an agent, trustee, or delegatee without discretionary authority of any other person (unless suchother person is giving all instructions with respect to the purchase from outside the United States).
(10) Date of Public Notice of Commencement of Tender Offer
Tuesday, August 13, 2024
(11) Tender Offer AgentSMBC Nikko Securities Inc.
3-3-1 Marunouchi, Chiyoda-ku, Tokyo31

3. Policies, etc., After the Tender Offer and Future Outlook(1) Policies of the Tender Offeror
For information concerning policies after the Tender Offer, please refer to "(III) Management Policy After the Tender Offer" in“(2)Background, Purpose, and Decision-Making Process Resulting in the Decision to Execute the Tender Offer, and Management
Policy after the Tender Offer” and “(4) Planned Acquisition of Additional Target Company Share Certificates, etc., After the Tender
Offer” under “1. Purpose, etc., of the Purchase, etc.” above.
(2) Future Outlook
The Tender Offeror is currently investigating the impact of the Tender Offer on the Tender Offeror's business performance, andwill promptly announce any facts that should arise in the future that should be announced.
4. Other(1) Existence and Details of Agreement Between the Tender Offeror and the Target Company or its Officers(I) Support for the Tender Offer
According to the Target Company Press Release, the Target Company's Board of Directors, at a meeting held on the date ofthis notice, expressed an affirmative view toward the Tender Offer and resolved to adopt a neutral position and leave it to the
judgment of the Target Company's shareholders as to whether or not they should tender their shares in the Tender Offer.
For details of the resolution by the Board of Directors of the Target Company, please refer to the Target Company Press
Release and “(III) Approval of All Directors (Including Audit and Supervisory Committee Members) Without Special Interestsin the Target Company” under “(3) Measures to Ensure the Fairness of the Tender Offer, Including Measures to Ensure theFairness of the Tender Offer Price and Measures to Avoid Conflicts of Interest” in “1. Purpose, etc., of the Purchase, etc.” above.
(II) Capital and Business Alliance Agreement
The Tender Offeror has executed the Capital and Business Alliance Agreement with the Target Company as of the date ofthis notice. For details of the Capital and Business Alliance Agreement, please refer to “(I) Capital and Business AllianceAgreement” under "(6) Material Agreements Regarding the Tender Offer" in “1. Purpose, etc., of the Purchase, etc.” above.
(III) Agreement Between the Tender Offeror and the Officers of the Target Company
Not applicable.
(2) Other Information Deemed Necessary for Investors to Decide Whether or not to Tender Shares in the Purchase, etc.
(I) Publication of Target Company Third Quarter Financial Results
The Target Company has released the “Consolidated Financial Results for the Nine Months Ended June 30, 2024 [Japanese
GAAP]” as of the date of this notice. A summary based on this announcement is as follows. The following summary of theannouncement is a partial excerpt of the announcement made by the Target Company, and the Tender Offeror has notindependently verified its accuracy and truthfulness. For details, please refer to the relevant announcement.
(i) Profit and Loss (Consolidated)Accounting Period

For the nine months ended June 30, 2024

Net sales

18,519 million yen

Cost of sales

14,245 million yen

Selling, general and administrative expenses

3,576 million yen

Non-operating income

50 million yen

Non-operating expenses

44 million yen

Profit attributable to owners of parent

356 million yen
32

(ii) Per Share Information (Consolidated)Accounting Period

For the nine months ended June 30, 2024

Basic earnings per share

35.89 yen

Net assets per share

868.74 yen(II) Announcement of Notice Regarding Expected Recording of Extraordinary Income (Gain on Sale of Investment Securities)
and Revision of Consolidated Earnings Forecast for the Full Year Ending September 30, 2024
On the date of this notice, the Target Company announced the “Notice of Expected Recording of Extraordinary Income (Gainon Sale of Investment Securities) and Revision of Consolidated Earnings Forecast for the Full Year Ending September 30, 2024.”
A summary of the Target Company's earnings forecasts for the fiscal year ending September 30, 2024 based on thisannouncement is as follows. The following summary of the announcement is a partial excerpt of the announcement made by theTarget Company, and the Tender Offeror has not independently verified its accuracy and truthfulness. For details, please refer tothe relevant announcement.
Revision of Consolidated Earnings Forecast for the Fiscal Year Ending September 30, 2024 (October 1, 2023 to September
30, 2024)
Net sales

Profit attributable to

Basic earnings perowners of parent

share

Operating profit

Ordinary profit

million yen

million yen

million yen

million yen

yen

26,300

1,510

1,550

880

87.32

Revised forecast (B)25,300

1,030

935

770

77.55

Change (B-A)(1,000)

(480)

(615)

(110)

－

(3.8)

(31.8)(39.7)(12.5)－

28,491

1,709

1,774

1,008

100.09Previous forecast (A)Percentage change(%)(Reference) Previous
fiscal year results(fiscal year ended
September 30, 2023)(Reference) Forecasts of Consolidated Operating Results for the Fiscal Year Ending March 31, 2025 (April 1, 2024 to March 31,2025) (Announced on May 13, 2024) and Results for the Previous Fiscal Year(millions of yen)
Net sales

Profit attributable toOperating profit

Ordinary profit

560,000

16,00010,5008,000

512,484

15,930

9,690

7,004

owners of parent

Forecasts of consolidated
operating results for the current
fiscal year
(fiscal year ending March 31,2025)
Previous fiscal year results(fiscal year ended March 31, 2024)

33