October 30, 2014
(Translated from the Japanese original)
Company Name:
Representative:
Stock Listing:Stock Code:Contact:
Phone:

IT Holdings Corporation
Norio Maenishi, President
First Section of the Tokyo Stock Exchange
3626
Iwao Sakuma, General Manager,
PR & IR Department+81-3-5338-2272 (in Japan, 03-5338-2272)

Notification regarding Commencement of Tender Offer
for Shares of Subsidiary AGREX INC. (Code 4799)
IT Holdings Corporation (the “Tender Offeror” hereafter) hereby gives notice that at a meeting of its
board of directors held on October 30, 2014 a resolution was passed as follows to acquire commonshares (the “Shares of the Target” hereafter) and stock acquisition rights (defined in “2. Overview of
the Acquisition, Etc.,” “(3) Price of Tender Offer,” “2) Stock Acquisition Rights”; the same applies
hereafter) of AGREX INC. (First Section of Tokyo Stock Exchange, Inc. (“Tokyo Stock Exchange”
hereafter), Code: 4799), the “Target” hereafter) through a tender offer (the “Tender Offer” hereafter)
based on the Financial Instruments and Exchange Act (Act No. 25 of 1948, including subsequent
amendments, the “Act” hereafter.)Particulars
1.

Purpose of the Acquisition, Etc.

(1) Overview of the Tender Offer
As of October 30, 2014, the Tender Offeror holds 5,254,000 shares (Note) of the Shares of theTarget and the Target is a consolidated subsidiary of the Tender Offeror. However, on thisoccasion, the Tender Offeror resolved at a meeting of its board of directors held on October 30,
2014 to conduct the Tender Offer as part of transactions (the “Transaction” hereafter) to acquire
all of the common shares (excluding treasury shares held by the Target) and all of the stockacquisition rights of the Target listed on the First Section of the Tokyo Stock Exchange for the
purpose of making the Target a wholly-owned subsidiary of the Tender Offeror.
(Note) Based on the total number of 10,500,000 issued common shares of the Target as of
September 30, 2014 stated in the Consolidated Financial Results for theSecond-Quarter of the Fiscal Year Ending March 31, 2015 (prepared pursuant toJapanese GAAP) (the “Second-Quarter Fiscal 2015 Financial Results” hereafter), thisrepresents a ratio of 50.61% of the resulting number of shares (10,380,998 shares) after
deducting the number of treasury shares (119,002 shares) held by the Target as of
September 30, 2014 stated in the Second-Quarter Fiscal 2015 Financial Results (the-1-“Shareholding Ratio” hereafter; rounded to the second decimal place; the same
calculation applies hereafter for ratios unless special treatment has been stipulated.)
As the Tender Offeror has not set a maximum or minimum for the number of shares to bepurchased under the Tender Offer, it will acquire all tendered share certificates, etc. Based on
the Tender Offer, if the Tender Offeror is unable to acquire all of the issued common shares of
the Target (excluding the treasury shares held by the Target), and if the number after adding thetotal number of common shares of the Target that are tendered in the Tender Offer to thenumber of shares held by the Tender Offeror (5,254,000) reaches a ratio of two-thirds(6,920,666 shares) of 10,380,998 shares (the “Percentage of Tender” hereafter), which is thenumber derived after deducting the number of treasury shares (119,002 shares) held by theTarget as of September 30, 2014 that is stated in the Second-Quarter Fiscal 2015 Financial
Results from the total number of 10,500,000 issued common sharess of the Target as of
September 30, 2014 stated in the Second-Quarter Fiscal 2015 Financial Results, the Tender
Offeror will request the Target to implement a series of procedures stated in “(4) Policy on
Restructuring, etc. (matters related to the so-called two-step acquisition) after the Tender Offer
has been made.” Furthermore, the Tender Offeror plans to acquire all of the common shares of
the Target (excluding the treasury shares held by the Target), and if the Transaction is
implemented, the common shares of the Target will be delisted after the prescribed procedures
have been carried out.
In addition, according to the “Notification of Expression of Opinion Concerning Support
for the Tender Offer for the Company’s Shares Made by Its Controlling Shareholder, IT
Holdings Corporation, and Recommendation to Tender the Company’s Shares” dated October30, 2014 that was released by the Target (the “Press Release of the Target” hereafter), the Target
resolved at a meeting of its board of directors held on October 30, 2014 to express its opinion in
support of the Tender Offer, to recommend that the shareholders of the Target tender theirshares in the Tender Offer, and to entrust the decision on whether to tender the Stock
Acquisition Rights in the Tender Offer or not to the holders of the Stock Acquisition Rights. For
details regarding the above, please refer to “2. Overview of the Acquisition, etc.”, “(4) Basis for
Calculation of Acquisition Price,” “2) Background to Calculation” “(v) Approval of all
Directors and Company Auditors without any conflicts of interest at the Target”(2) Background Leading to Determination to Implement Tender Offer, Purpose,
Decision-making Process and Management Policy after Completion of the Tender Offer
1) Background, etc. Leading to Determination to Implement Tender Offer
The Tender Offeror was established as a Joint Holding Company through a joint share transfer
aimed at management integration with TIS Inc. (“TIS” hereafter) and INTEC Holdings, Ltd.
in April 2008. The Tender Offeror is a corporate group based on independent prime
contractors that belong to the IT field, which play an important role in terms of social
infrastructure, including TIS and INTEC Inc. Its basic management policy is to display thegroup’s comprehensive strengths while increasing the individuality of each company, toendeavor to enhance management efficiency and expand the scope of operations, and to
maximize corporate value. The group is comprehensively expanding information businesses
such as IT infrastructure services, financial IT services and industrial IT services.

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At present, the Tender Offeror Group (which comprises mainly the Tender Offeror, 46
consolidated subsidiaries and 11 equity-method affiliated companies) is tackling management
challenges after launching its Second Medium-Term Management Plan (the fiscal year ending
March 31, 2013 to the fiscal year ending March 31, 2015), whose basic concepts are“Top-Line Emphasis” “as One Company,” and “Enterprising and Bold,” in the fiscal year
before last, with the aim of becoming an IT corporate group where the Tender Offer Group asa whole is able to achieve reforms. The Tender Offeror Group determined its groupmanagement policy for the fiscal year ending March 31, 2015, the final year of the Plan, as
follows, and the Tender Offeror Group is striving to steadily promote the Plan and improve its
corporate value.
y Top-Line Emphasis: Prioritize profit amount and profit margin and secure top line toachieve targets
y as One Company: Focus on groupwide management highlighting solid communication
practices respected throughout the Groupy Enterprising and Bold: Energize process of turning business activities into marketable
services and further globalize business presence
Recently, to indicate the determination to unify the Tender Offeror Group, we decided tointegrate the Group’s brands. Since June 2014, each company in the Tender Offeror Group has
used a single corporate logo, and based on the common brand message “Go Beyond,” we aresolidifying the Group’s unity even more and taking a new step forward.
On the other hand, the Target was established as JAPAN Management Consultant Co.,
Ltd. with the business purpose of information processing services centered on data entry andclerical work in 1965. Then, in 2002, it became a consolidated subsidiary of TIS, triggered by
the fact that TIS acquired a majority of its common shares (shareholding ratio of 50.61%).
(Owing to the implementation of an absorption-type split ---TIS became the splitting
company and the Tender Offeror became the successor company in the absorption-type split,
which was aimed at the reorganization of the Group formation and became effective on
October 1, 2008, the Shareholding Ratio of the Tender Offeror relating to the common sharesof the Target as of October 30, 2014 is 50.61%, as the Tender Offeror succeeded all of thecommon shares that TIS held on October 1, 2008.) Subsequently, the Target was publicly
listed on the JASDAQ market in 2002, and then its shares were listed on the Second Sectionof the Tokyo Stock Exchange in 2004 and listed on the First Section of the Tokyo Stock
Exchange in 2006.
Since its establishment, the Target has developed three core businesses: (i) businessprocess outsourcing (BPO), which entails the aggregated outsourcing of customers’
operations; (ii) software solutions, which support the resolution of issues with packaged
software; and (iii) system integration, which entails integrated support from systemconstruction to operation. The Target has provided services that effectively combine these in a
one-stop form.
Going forward, the management environment surrounding the Tender Offeror Group is
expected to continue to improve mainly due to growth in customers’ IT investment needs
associated with a moderate recovery in economic conditions. However, competition is
projected to intensify, including diversification of the forms of use of IT at companies andinitiatives to address the paradigm shift of the industry, as well as the need to secure-3-competent staff and enhance project management efficiency. Amid this environment, in regard
to the BPO business, demand for business outsourcing that contributes to an improvement incorporate management, such as business innovation and cost reduction at companies, isexpanding.
In light of this situation, the Tender Offeror has considered the ideal form of theoperations of the entire Tender Offeror Group from various angles since January 2014. As partof this, the Tender Offeror came to the conclusion in late June 2014 that it was essential in thecurrently tough management environment to enhance the efficiency of management byconcentrating BPO operations dispersed around the Tender Offeror Group in the Target,
reinforcing business operations, and creating an optimal management organization for theoverall Tender Offeror Group so that the Tender Offeror Group can grow and develop further.
2) Process of Decision-making
In this environment, the Tender Offeror made a proposal relating to the Transaction to theTarget in late June 2014, and using this proposal as an opportunity, the Tender Offeror and theTarget each initiated actions to realize an improvement in the corporate value of the Tender
Offeror Group, based on the fundamental concepts of the Second Medium-Term Management
Plan. Specifically, the Tender Offeror appointed Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (“Mitsubishi UFJ Morgan Stanley Securities” hereafter) as its financial advisor andthird-party appraiser that is independent from the Tender Offeror and the Target, andappointed TMI Associates as its legal advisor. In addition, the Target appointed Daiwa
Securities Co. Ltd. (“Daiwa Securities” hereafter) as its financial advisor and third-party
appraiser that is independent from the Tender Offeror and the Target, and appointed
City-Yuwa Partners as its legal advisor. Then, during the period from early July 2014 until the
public notification of the Tender Offer, the two parties conducted discussions on several
occasions regarding various measures and the terms and conditions of the Transaction withthe aim of further enhancing the corporate value of the Target and the Tender Offeror Group.
In late July 2014, when this process occurred, the Tender Offeror and the Target agreed
that it was important to attempt to develop an optimal business strategy for the entire Tender
Offeror Group by positioning the Target as the core entity of the BPO business in the Tender
Offeror Group and making effective use of the strengths and latent growth potential of theTarget. In addition, they reached the conclusion that it was necessary to restructure the capital
relationship in the Tender Offeror Group so as to enable a business and functional
reorganization to be carried out agilely and flexibly, and that turning the Target into awholly-owned subsidiary at an early stage would enable even stronger cooperation and an
improvement in the corporate value of the Target and the Tender Offeror Group.
Moreover, the Tender Offeror and the Target shared the view that the Transaction would
remove the possibility of a latent conflict of interest problem relating to the parent-childlisting and that it would enable the management and administration organization of the Target
and the Tender Offeror Group to be made more efficient and slimmed down by alleviating thelisting cost burden of the Target. They also shared the view that positioning the Target as thecore entity for the development of the BPO business, which is projected to grow, andconcentrating the BPO operations dispersed among the Tender Offeror Group would lead tothe reinforcement of the Target’s business operations.

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According to the Press Release of the Target, the Target adopted various measuresdescribed in the following “(3) Measures to Ensure the Fairness of the Tender Offer, such as
Measures to Ensure the Fairness of the Tender Offer Price and Measures to Prevent Conflictsof Interest” after receiving the proposal related to the Transaction, including the Tender Offer,from the Tender Offeror. Then, based on legal advice received from City-Yuwa Partners, thelegal advisor, as well as the contents of the equity value analysis obtained from Daiwa
Securities, the financial advisor, and advice received from that company, the Target conducteddiscussions and investigations prudently from the viewpoint of improving corporate value inregard to the terms of the Transaction while paying maximum respect to the contents of areport (“the Report” hereafter) submitted by a third-party committee, which was establishedon September 18, 2014 as the Target’s consultative body to consider proposals related to theTransaction.
Previously, the Target attempted to strengthen cooperation with each company in theTender Offeror Group in the BPO business, based on the Tender Offeror Group policy, inwhich “as One Company” is a basic concept. However, while the current capital relationshipwas maintained, the plan to concentrate the BPO operations of the Tender Offeror Group in
the Target was not achieved, as there are limits on a bold business and functional
reorganization that could potentially have a negative impact on the shareholders of eachcompany in the Tender Offeror Group, including the Target, in the short term. Against thisbackdrop, as the Target received the above-mentioned proposal relating to the Transaction,
including the Tender Offer, from the Tender Offeror, the Target considered it prudently basedon the contents of the Report and consequently reached the conclusion that it was essential torestructure the capital relationship in the Tender Offeror Group in order to enable an agile andflexible business and functional reorganization.
In addition, the Target reached the conclusion that strengthening business operations byconcentrating the operating base and management resources in the Tender Offeror Grouprelated to BPO operations in the Target, enhancing the strategic role and positioning within
the Tender Offeror Group of the Target as the core entity of the BPO business, which is apriority business in the Tender Offeror Group, and attempting to speed up decision-making by
making the Target a wholly-owned subsidiary of the Tender Offeror would be beneficial in
improving the corporate value of the Target. Therefore, the Target decided to declare its
support for the Tender Offer.
Furthermore, based on discussions and negotiations on several occasions related to theequity value of the Target’s common shares between the Tender Offeror and the Target thatwere conducted from October 2014 onward, the Tender Offeror determined an acquisition
price per share for the Target’s common shares in the Tender Offer (the “Tender Offer Price”
hereafter) that will be sufficient for the Target to conclude that a reasonable premium has beenoffered to the Target’s shareholders. Regarding this point, the Target concluded that theTender Offer would provide an opportunity to sell shares at a price with a reasonable premiumfor the Target’s shareholders in light of the following: according to the Press Release of theTarget, the Target determined that the Tender Offer Price (i) as stated in the following “2.
Overview of the Acquisition, etc.”, “(4) Basis for Calculation of Acquisition Price,” “2)Background to Calculation,” “(ii) Acquisition of equity value analysis from third-party
appraiser for the Target,” exceeds the range of calculation results based on the average market
method and the comparable company analysis method and is within the range of calculation
results based on discounted cash flow analysis (the “DCF Analysis” hereafter), among the-5-calculation results of the equity value of the Target’s common shares produced by Daiwa
Securities; (ii) it is considered that the Tender Offer Price is within a reasonable range, as apremium of roughly 33.8% (rounded to the first decimal place; the same calculation applies tothe calculation of premiums hereafter) has been added to the closing price of ¥1,069 for theTarget’s common shares on the Tokyo Stock Exchange on October 29, 2014, the trading day
before the date of the announcement of the Tender Offer, a premium of roughly 32.2% has
been added to the simple average closing price of ¥1,082 (rounded to the nearest yen; thesame calculation applies to the calculation of share prices hereafter) for the Target’s commonshares during the past month (September 30, 2014 to October 29, 2014), a premium ofroughly 30.5% has been added to the simple average closing price of ¥1,096 during the past
three months (July 30, 2014 to October 29, 2014), and a premium of roughly 32.3% has been
added to the simple average closing price of ¥1,081 during the past six months (April 30,
2014 to October 29, 2014); (iii) it was recognized that consideration had been given to theinterests of minority shareholders, such as the adoption of measures to eliminate any conflictof interest stated in the following “(3) Measures to Ensure the Fairness of the Tender Offer,such as Measures to Ensure the Fairness of the Tender Offer Price and Measures to Prevent
Conflicts of Interest;” and (iv) the price was determined after the adoption of measures toeliminate the conflicts of interest mentioned above and after conducting discussions andnegotiations on several occasions between the Target and the Tender Offeror that wereequivalent to discussions and negotiations in a transaction between independent parties.
In contrast, with regard to the acquisition price of the Stock Acquisition Rights, theTarget has not requested a third-party appraiser to calculate the value of the Stock Acquisition
Rights, in view of the following. Firstly, the Stock Acquisition Rights were all issued as stock
options to Directors; and secondly, in terms of conditions relating to the exercise of rights
pertaining to the Stock Acquisition Rights, exercise conditions have been attached, such as theability to exercise Stock Acquisition Rights only during a period of 10 days from the day
following the day when Stock Acquisition Right holders lose their positions as Directors of
the Target. Therefore, even if the Tender Offeror acquires the Stock Acquisition Rights
through the Tender Offer, it will not be able to exercise them.
Moreover, through the above-mentioned discussions, while taking into account theintention to make the Target a wholly-owned subsidiary of the Tender Offeror, the Tender
Offeror resolved to conduct the Tender Offer at its board of directors meeting held on October30, 2014, with the aim of enhancing the corporate value of the Target and the Tender Offeror
Group.
3) Management Policy after the Transaction
If the Percentage of Tender reaches two-thirds or more (6,920,666 shares or more in terms ofthe number of shares), the Tender Offeror aims to “bolster competitiveness by means of afunctional reorganization within the Tender Offeror Group” and “enhance the efficiency of
consolidated management through optimization of the entire Tender Offeror Group” in orderfor each company in the Tender Offeror Group to cooperate while leveraging their respective
strengths and to realize an improvement in the corporate value of the Tender Offeror Group,
which aims to be an IT corporate group that can accomplish reforms in an integrated manner.
Specifically, the following measures will be implemented.
y “Bolster competitiveness by means of a functional reorganization within the Tender Offeror
Group”-6-

First, after the implementation of the Transaction, during the period of the Third
Medium-Term Management Plan from Fiscal 2016, ended March 31, 2016 onward, we willreinforce business operations by positioning the Target as the core entity for thedevelopment of the BPO market, which is expected to grow, and concentrating BPO
operations, which are dispersed among the Tender Offeror Group, in the Target. In addition,
we will accomplish a seamless value chain from upstream operations such as consulting to
BPO and accomplish the kind of functional deployment that will enable the provision of
one-stop services as a group.
y “Enhance the efficiency of consolidated management through optimization of the entire
Tender Offeror Group”
We aim to improve financial efficiency through the management of flexible funding andcapital policy, reduce the cost of operation, and generate business synergies after the
implementation of the Transaction.
However, if the Percentage of Tender does not reach two-thirds or more (6,920,666
shares or more), the Tender Offeror intends to postpone requesting the Target to implement a
series of procedures stated in the “(4) Policy on Restructuring, etc. after the Tender Offer(matters related to the so-called two-step acquisition)”. Moreover, regardless of whether thePercentage of Tender reach two-thirds or more or not (6,920,666 shares or more), as regards
the management organization of the Target going forward, the Tender Offeror will respect
the Target’s existing management policy, principles and corporate culture. In addition, nodecision has been made to change the composition of Directors or regarding any otherpolicy that will exert any other significant impact on the management policy of the Target.

(3) Measures to Ensure the Fairness of the Tender Offer, such as Measures to Ensure theFairness of the Tender Offer Price and Measures to Prevent Conflicts of Interest
As mentioned in “(1) Overview of the Tender Offer” above, the Tender Offeror regards theTarget as a consolidated subsidiary, and in view of the fact that consideration of the Transaction
at the Target could produce a structural conflict of interest situation, the Tender Offeror and theTarget have implemented the kind of measures below as measures to ensure the fairness of theTender Offer Price and measures to prevent any conflict of interest.
1) Acquisition of an equity value analysis from an independent third-party appraiser for theTender Offeror2) Acquisition of an equity value analysis from an independent third-party appraiser for theTarget3) Establishment of an independent third-party committee for the Target
4) Advice from an independent law firm for the Target
5) Approval of all Directors and Company Auditors without any conflicts of interest at theTarget6) Guarantee of objective conditions that will ensure the appropriateness of the price and thefairness of the Tender Offer-7-

For details regarding the above, please refer to the following “2. Overview of the Acquisition,etc.”, “(4) Basis for Calculation of Acquisition Price,” “1) Basis of Calculation” and “2)Background to Calculation”.

(4) Policy on Restructuring, etc. after the Tender Offer (matters related to the so-called
two-step acquisition)
As the Tender Offeror has not set a maximum or minimum for the number of shares to bepurchased under the Tender Offer, it will acquire all tendered share certificates, etc. If theTender Offeror is unable to acquire all of the issued common shares of the Target (excluding thetreasury shares held by the Target), even though the Tender Offer has been made, and if thePercentage of Tender reaches two-thirds or more (6,920,666 shares or more), the Tender Offeror
intends to acquire all of the issued common shares of the Target (excluding the treasury shares
held by the Target) through the series of procedures below after the Tender Offer has been
made.
Specifically, after the Tender Offer has been made, the Tender Offeror intends to ask theTarget to hold an extraordinary meeting of shareholders (the “Extraordinary Shareholders
Meeting” hereafter) that will include the proposals to 1) partially change the Target’s Articles ofIncorporation to make it possible to issue shares in different classes to common shares andthereby make the Target a company with class shares as prescribed in the Companies Act ofJapan (Act No. 86 of 2005; including subsequent amendments; the same applies hereafter), 2)
partially change the Target’s Articles of Incorporation to make all common shares issued by theTarget (meaning the provision regarding matters prescribed in Article 108.1.7 of the Companies
Act; the same applies hereafter) subject to class-wide call, and 3) issue the Target’s shares of adifferent class in exchange for the class-wide call of the Target’s common shares.
In addition, if proposal 1) above is approved at the Extraordinary Shareholders Meetingand the partial change to Articles of Incorporation relating to 1) above takes effect, the Target
will become a company with class shares as prescribed in the Companies Act. Moreover, inorder to make the partial change to the Articles of Incorporation relating to proposal 2) above
take effect, it will be necessary to adopt a resolution relating to the approval of proposal 2)
above at the Extraordinary Shareholders Meeting as well as a resolution to hold a classshareholders meeting comprising shareholders that hold the common shares of the Target thatare subject to class-wide call, based on Article 111.2.1 of the Companies Act. Therefore, theTender Offeror intends to ask the Target to hold a class shareholders meeting (the “Class
Shareholders Meeting” hereafter) that includes the proposal 2) above to partially change theArticles of Incorporation on the same day as the Extraordinary Shareholders Meeting.
Note that if the above proposals at the Extraordinary Shareholders Meeting and Class
Shareholders Meeting are submitted, the Tender Offeror plans to endorse each of the above
proposals at the above mentioned shareholders meeting and class shareholders meeting.
In the event that the above procedures are each executed, all common shares issued by
the Target (excluding the treasury shares held by the Target) will be acquired by the Target due
to the common shares becoming subject to a class-wide call, and different class shares of theTarget, as consideration for the aforesaid acquisition of common shares, will be issued to theTarget’s shareholders (excluding the Target). However, shareholders who are entitled, in
accordance with the processes of Article 234 of the Companies Act and other applicable laws-8-

and regulations, to fractions of less than one share in the aforesaid issuance of the Target’s
shares, will be issued cash acquired from the sale of a quantity of the Target’s sharescorresponding to the aggregate of the aforesaid fractions of one share (if the total number
includes a fraction of less than one share, that fraction will be omitted). Note that the amount ofcash delivered to the aforesaid shareholders, which will be the proceeds resulting from the saleof the Target’s shares of a different class corresponding to the total number of fractional shares,is planned to be calculated so that it is equivalent to the Tender Offer Price multiplied by the
number of common shares of the Target that were held by applicable shareholders, and it is thenplanned to petition the court for the Target to conduct a sale by private contract. Moreover, thecontents and number of the Target’s shares of a different class delivered as consideration for the
aforesaid acquisition of the common shares subject to class-wide call have not been determined
as of October 30, 2014, but in order for the Tender Offeror to hold all of the Target’s commonshares (excluding the treasury shares held by the Target), it is planned to make a decision to theeffect that the number of shares that is delivered to all shareholders who did not apply for theTender Offer other than the Tender Offeror is a fraction of less than one share.
Note that it is not planned to apply for a public listing of the different class of shares of
the Target that will be issued as consideration for the acquisition of the Target’s common sharesthat are subject to class-wide call.
As provisions in the Companies Act that are provided to protect the rights of minority
shareholders in relation to procedures 1) to 3) above, in the event that the Articles ofIncorporation are partially changed to make all of the common shares issued by the Target
subject to a class-wide call as described in 2) above, shareholders hold the right to demand theTarget to buy the shares they hold pursuant to the provisions of Articles 116 and 117 in the
Companies Act, and other related laws and regulations, and if a resolution has been passed at
the Extraordinary Shareholders Meeting to make a class-wide call of all shares subject to aclass-wide call as described in 3) above, shareholders can petition for a determination of theacquisition price of the aforesaid shares pursuant to the provisions of Article 172 of theCompanies Act, and other related laws. However, the price per share at which the Target
purchases shares from shareholders and the price per share at which the Target acquires sharesby these methods are ultimately decided in a court of law. Moreover, when acquisition bymeans of the class-wide call takes effect, it may be determined that a petition to determine theacquisition price under Article 117.2 of the Companies Act lacks eligibility.
However, in regard to procedures 1) to 3) above, it is necessary for a resolution to bepassed by a majority of two-thirds or more of the voting rights of shareholders present at a
general shareholders meeting and the Class Shareholders Meeting of the Target that meet therespective quorums prescribed under the Companies Act and the Target’s Articles ofIncorporation. Therefore, if the Percentage of Tender reaches two-thirds or more (6,920,666
shares or more), the Tender Offeror will request the Target to implement procedures 1) to 3)
above, but if the Percentage of Tender is less than two-thirds (less than 6,920,666 shares), theTender Offer will be made, but the Tender Offeror intends to postpone the request to implement
procedures 1) to 3) above, and if the request by the Tender Offeror is not made and procedures
1) to 3) above are not carried out by the Target, it is planned to maintain the listing of theTarget’s common shares on the First Section of the Tokyo Stock Exchange. Furthermore, even
if the Percentage of Tender reaches two-thirds or more (6,920,666 shares or more), it may takesome time for implementation or a change may arise in the method of implementation,
depending on the holding status of the common shares of the Target by the Tender Offeror after-9-

the Tender Offer and the holding status of the common shares of the Target by shareholders of
the Target other than the Tender Offeror, such as the status of the interpretation of authorities
regarding related laws and regulations. However, even if procedures 1) to 3) above are changed,
the Tender Offeror intends to ultimately hold all of the Target’s common shares (excluding thetreasury shares held by the Target) by delivering only cash to shareholders that did not
subscribe to the Tender Offer (excluding the Tender Offeror). With regard to the amount of cash
to be delivered to the aforesaid shareholders in this case as well, it is planned to calculate theamount so that it is equivalent to the Tender Offer Price multiplied by the number of commonshares of the Target that the aforesaid shareholders held. If the Tender Offeror asks the Target to
implement procedures 1) to 3) above, the Tender Offeror plans, in principle, to ask the Target tocommence procedures 1) to 3) above promptly after the completion of the Tender Offer, to holdthe Extraordinary Shareholders Meeting and the Class Shareholders Meeting by February 2015,
and to complete procedures 1) to 3) above. The Tender Offeror will discuss the specificprocedures and their implementation timing, etc. in the above case with the Target, and theTarget plans to promptly announce the details once a decision is made.
However, if the Percentage of Tender is less than two-thirds (less than 6,920,666 shares),the Tender Offeror does not plan to acquire additional common shares of the Target, andregardless of whether the Percentage of Tender reaches two-thirds or more (6,920,666 shares ormore) or not, in regard to the Target’s management organization, the Tender Offeror will respect
the Target’s existing management policy, principles and corporate culture. In addition, nodecision has been made to change the composition of Directors or regarding any other policythat will exert a significant impact on the management policy of the Target.
Furthermore, if the Tender Offer has been made but, as a result, all the Stock Acquisition
Rights have not been acquired and they remain without the Stock Acquisition Rights being
exercised after the Tender Offer as well, the Tender Offeror plans to ask the Target to carry out
procedures that are necessary for the implementation of the Transaction, such as acquisition of
the Stock Acquisition Rights and encouragement of Stock Acquisition Rights holders tosurrender the Stock Acquisition Rights after the Tender Offer has been made.
However, the Tender Offer does not solicit the endorsement of shareholders of the Target
at the Extraordinary Shareholders Meeting and the Class Shareholders Meeting.
The Tender Offeror plans to request the cancellation of all treasury shares held by theTarget from the expiry of the Tender Offer period onward, but the timing of this has not been
decided, and the Tender Offeror will decide this after holding discussions with the Target going
forward.

(5) Likelihood of Delisting and Reasons Therefor
The common shares of the Target are listed on the First Section of the Tokyo Stock Exchange asof October 30, 2014, but the Tender Offeror has not set a maximum number of shares to bepurchased in the Tender Offer, and depending on the outcome of the Tender Offer, the commonshares of the Target may be delisted through predetermined procedures in accordance with thedelisting standards of the Tokyo Stock Exchange. Moreover, even if the aforesaid standards are
not met upon completion of the Tender Offer, when the Tender Offeror has acquired all of theissued common shares of the Target (excluding the treasury shares held by the Target) andprocedures to make the Target a wholly-owned subsidiary of the Tender Offeror have been- 10 -

implemented, as described above in “(4) Policy on Restructuring, etc. after the Tender Offer(matters related to the so-called two-step acquisition),” due to the fact the Tender Offer has
been made and the Percentage of Tender has reached two-thirds or more (6,920,666 shares ormore), the common shares of the Target will be delisted through prescribed procedures. On theother hand, if the Tender Offeror postpones its request for the implementation of procedures tomake the Target a wholly-owned subsidiary because the delisting standards of the Tokyo Stock
Exchange are not met upon the completion of the Tender Offer and the Percentage of Tender isless than two-thirds (less than 6,920,666 shares), it is planned to continue to list the commonshares of the Target on the First Section of the Tokyo Stock Exchange.
In addition, trading of common stock of the Target will become unavailable on the Tokyo
Stock Exchange after the delisting.

(6) Matters Concerning Important Agreements relating to the Tender Offer between
Shareholders of the Tender Offeror and the Target
Not applicable.

2.

Overview of the Acquisition, Etc.

(1) Outline of the Target
1)

Name

AGREX INC.

2)

Location

Shinjuku Sumitomo Bldg. 2-6-1, Nishi-shinjuku, Shinjuku-ku, Tokyo

3)

Position and name ofrepresentative

Katsunori Yamaguchi, President and Representative Director

Business activities

Comprehensive information technology services, primarily BPO,
software solutions and system integration

5)

Paid-in capital

1,292,192,400 yen (as of June 30, 2014)

6)

Date of establishment

September 9, 1965

7)

Major shareholders and IT Holdings Corporation
shareholding ratios
AGREX Employee Stock Ownership Plan(as of March 31, 2014) Japan Trustee Services Bank, Ltd.

4)

The Dai-ichi Life Insurance Company, Limited(standing proxy: Trust & Custody Services Bank, Ltd.)
Hiroshi Hatori
Bank of New York GCM Client Accounts JPRD ISG
FE-AC(standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Katsunori Yamaguchi
Mototsugu Suzuki
The Master Trust Bank of Japan, Ltd.

- 11 -

50.0%
5.4%
2.9%
1.0%
0.8%

0.8%
0.8%
0.6%
0.6%
0.4%

8)

Relationship between Tender Offeror and Target
Capital relationship

The Tender Offeror holds 5,254,000 shares, equivalent to 50.04% of
the total number of issued shares (10,500,000 shares) of the Target.

Personal relationships

As of October 30, 2014, one Director of the Target is concurrently
serving as an executive officer of the Tender Offeror.

Business relationship

The Tender Offeror has borrowed funds from the Target.

Possibility of being
The Target is a consolidated subsidiary of the Tender Offeror andregarded as a related
corresponds to a related party of the Tender Offeror.
party(Note) The above Shareholding Ratios are the same as those stated in the Target’s 50th Term
Financial Statements (the “50th Term Financial Statements” hereafter) filed on June 19,
2014.

(2) Schedule, Etc.
1) Schedule
Resolutions by board of
directors
Date of Public Notice ofCommencement of theTender Offer
Tender Offer notification
submission date

October 30, 2014 (Thursday)
October 31, 2014 (Friday)
Electronic notification will be conducted and this will be stated in the
Nihon Keizai Shimbun.
(Electronic notification address: http://disclosure.edinet-fsa.go.jp/)
October 31, 2014 (Friday)

2) Initial period of the Tender Offer in the registration
From October 31, 2014 (Friday) to December 15, 2014 (Monday) (30 business days)
3) Possibility of extending the above period upon request of the Target
Not applicable.

(3) Price of Tender Offer1) 1,430 yen per share of common stock2) Stock Acquisition Rights(i)

One yen per option of stock acquisition rights issued on August 20, 2008 (“1st Issue ofStock Acquisition Rights” hereafter), based on resolution at board of directors meeting of
the Target held on July 24, 2008.

(ii) One yen per option of stock acquisition rights issued on August 20, 2009 (“2nd Issue ofStock Acquisition Rights” hereafter), based on resolution at board of directors meeting of
the Target held on July 24, 2009.

- 12 -

(iii) One yen per option of stock acquisition rights issued on August 20, 2010 (“3rd Issue ofStock Acquisition Rights” hereafter), based on resolution at board of directors meeting of
the Target held on July 29, 2010.
(iv) One yen per option of stock acquisition rights issued on August 19, 2011 (“4th Issue ofStock Acquisition Rights” hereafter), based on resolution at board of directors meeting of
the Target held on July 29, 2011.
(v) One yen per option of stock acquisition rights issued on August 20, 2012 (“5th Issue ofStock Acquisition Rights” hereafter), based on resolution at board of directors meeting of
the Target held on July 27, 2012.
(vi) One yen per option of stock acquisition rights issued on August 20, 2013 (“6th Issue ofStock Acquisition Rights” hereafter), based on resolution at board of directors meeting of
the Target held on July 26, 2013.
(vii) One yen per option of stock acquisition rights issued on August 20, 2014 (“7th Issue ofStock Acquisition Rights” hereafter; the 1st Issue of Stock Acquisition Rights, 2nd Issueof Stock Acquisition Rights, 3rd Issue of Stock Acquisition Rights, 4th Issue of Stock
Acquisition Rights, 5th Issue of Stock Acquisition Rights, and 6th Issue of Stock
Acquisition Rights are referred to in general as “the Stock Acquisition Rights” hereafter),based on resolution at board of directors meeting of the Target held on July 25, 2014(4) Basis for Calculation of Acquisition Price
1) Basis of Calculation(i)

Common shares
To serve as a reference when determining the Tender Offer Price, the Tender Offeror
requested an equity value analysis of the common shares of the Target from Mitsubishi
UFJ Morgan Stanley Securities, which is a third-party appraiser that is independent fromthe Tender Offeror and the Target and also the financial advisor of the Tender Offeror inearly July 2014 (note that Mitsubishi UFJ Morgan Stanley Securities does notcorrespond to a related party of the Tender Offeror or the Target and does not have any
material conflict of interest that should be mentioned in relation to the Tender Offer.)
To calculate the equity value of the Target’s common shares, Mitsubishi UFJ
Morgan Stanley Securities used the average market share price method, the comparable
company analysis method and discounted cash flow analysis (the “DCF Analysis”
hereafter), and the Tender Offeror received the equity value analysis from Mitsubishi
UFJ Morgan Stanley Securities on October 29, 2014. (However, the Tender Offeror did
not obtain an assessment on the fairness of the Tender Offer Price (a Fairness Opinion.)
The range of valuations per share of common stock of the Target calculated according toeach method above is as follows.
Average market share price method
Comparable company analysis method
DCF Analysis

1,061 yen to 1,097 yen
934 yen to 1,251 yen
1,252 yen to 1,552 yen

First, under the average market share price method, Mitsubishi UFJ Morgan Stanley
Securities calculated the range per share of common stock of the Target as 1,061 yen to- 13 -

1,097 yen, based on 1,061 yen as the closing price of the common stock of the Target on
the Tokyo Stock Exchange on the record date of October 28, 2014; 1,085 yen (rounded
to the nearest yen, the same applies hereafter to the calculation of share prices) as thesimple average closing price for ordinary transactions during the most recent month(September 29, 2014 to October 28, 2014); 1,097 yen as the simple average closing pricefor ordinary transactions during the most recent three months (July 29, 2014 to October28, 2014); and 1,081 yen as the simple average closing price for ordinary transactions
during the most recent six months (April 30, 2014 to October 28, 2014.)
Next, under the comparable company analysis method, Mitsubishi UFJ Morgan
Stanley Securities calculated the range per share of common stock as 934 yen to 1,251
yen through an evaluation of the Target’s equity value based on a comparison of market
share prices and financial indicators such as the earnings of listed companies engaged inrelatively similar businesses to those of the Target.
Finally, based on the DCF analysis, Mitsubishi UFJ Morgan Stanley Securities
calculated the range per share of common stock of the Target as 1,252 yen to 1,552 yenafter analyzing enterprise value and equity value by discounting free cash flows that theTarget is expected to generate in the future by a certain discount rate to arrive at the netpresent value. That analysis was based on the Target’s estimated future profits from thefiscal year ending March 31, 2015 and beyond, taking into consideration the Target’s
business plans, most recent business performance, publicly available information andother contributing factors.
(Note) When calculating the equity value of the Target’s common shares, Mitsubishi
UFJ Morgan Stanley Securities used, in principle, information provided by theTender Offeror and the Target and publicly available information, assumed thatsuch data and information were all correct and complete, and did not
independently verify their accuracy and completeness. In addition, it did not
independently evaluate and assess the assets and liabilities (including off-bookassets and liabilities and other contingent liabilities) of the Target’s affiliatedcompanies, and did not request an appraisal or assessment from a third-party
organization. Furthermore, it assumed that the information regarding thefinancial forecasts of the Target was reasonably prepared based on the best
estimates and judgments that can be obtained at the present time by the
management of the Target. The calculation by Mitsubishi UFJ Morgan Stanley
Securities reflects the above information up to October 28, 2014.
The Tender Offeror took into account the contents and analysis results stated in theequity valuation analysis received from Mitsubishi UFJ Morgan Stanley Securities andcomprehensively considered factors such as whether the board of directors of the Target
would accept the Tender Offer; the results of due diligence in relation to the Target;market share price movements of the Target’s common shares during the most recent six
months; examples of premiums added to tender offer prices in past examples of tender
offers for shares by entities other than issuers; and the expected number of subscriptions
to the Tender Offer. Furthermore, after concluding that presenting to the existing
shareholders of the Target a purchase price with a reasonable premium added to themarket price of the Target’s common shares that was likely to reflect the current financial
and market environment would be reasonable, the final Tender Offer Price was- 14 -

determined at 1,430 yen at the meeting of the board of directors held on October 30,
2014.
The Tender Offer Price per share of 1,430 yen represents a premium of 33.8%(rounded to the second decimal place, the same applies for the calculation of premiums
hereafter) on the closing price of 1,069 yen for the common shares of the Target based on
ordinary transactions on the Tokyo Stock Exchange on October 29, 2014, which is thebusiness day immediately preceding the date of the public notification of thecommencement of the Tender Offer by the Tender Offeror. It also represents a premiumof 32.2% on the simple average of 1,082 yen for closing share prices based on ordinarytransactions during the past month (September 30, 2014 to October 29, 2014), 30.5% on
the simple average of 1,096 yen for closing share prices based on ordinary transactions
during the past three months (July 30, 2014 to October 29, 2014), and 32.3% on thesimple average of 1,081 yen for closing share prices based on ordinary transactions
during the past six months (April 30, 2014 to October 29, 2014).
(ii) Stock Acquisition Rights
Firstly, the Stock Acquisition Rights were all issued as stock options to Directors; andsecondly, in terms of conditions relating to the exercise of rights pertaining to the Stock
Acquisition Rights, exercise conditions have been attached, such as the ability to
exercise Stock Acquisition Rights only during a period of 10 days from the day
following the day when Stock Acquisition Right holders lose their positions as Directorsof the Target. Moreover, regarding the acquisition of share options by means of transfer,in view of the fact that approval by means of a resolution by the board of directors of theTarget is required, the Tender Offeror will be unable to exercise these options, even if it
acquires the Stock Acquisition Rights through the Tender Offer. Therefore, the Tender
Offeror decided on a price of one yen per option as the price for the purchase of theStock Acquisition Rights. Note that, in determining the price for the purchase of theStock Acquisition Rights, the Tender Offeror did not obtain a valuation report from athird-party appraiser.
2) Background to Calculation(Background Leading to Determination of Tender Offer Price)
Since its establishment, the Target has developed three core businesses: (i) BPO, which entails
the aggregated outsourcing of customers’ operations; (ii) software solutions, which support
the resolution of issues with packaged software; and (iii) system integration, which entails
integrated support from system construction to operation. The Target has provided services
that effectively combine these in a one-stop form.
Going forward, the management environment surrounding the Tender Offeror Group is
expected to continue to improve mainly due to growth in customers’ IT investment needs
associated with a moderate recovery in economic conditions. However, competition is
projected to intensify, including diversification of the forms of use of IT at companies andinitiatives to address the paradigm shift of the industry, as well as the need to securecompetent staff and enhance project management efficiency. Amid this environment, in regard
to the BPO business, demand for business outsourcing that contributes to an improvement incorporate management, such as business innovation and cost reduction at companies, isexpanding.
- 15 -

In light of this situation, the Tender Offeror has considered the ideal form of theoperations of the entire Tender Offeror Group from various angles since January 2014. As partof this, the Tender Offeror came to the conclusion in late June 2014 that it was essential in thecurrently tough management environment to enhance the efficiency of management byconcentrating BPO operations dispersed around the Tender Offeror Group in the Target,
reinforcing business operations, and creating an optimal management organization for theoverall Tender Offeror Group so that the Tender Offeror Group can grow and develop further.
Moreover, through discussions on several occasions between the Tender Offeror and theTarget, which were conducted from early July 2014 until the announcement of the Tender
Offer, while taking into account the intention to make the Target a wholly-owned subsidiaryof the Tender Offeror, the Tender Offeror resolved to conduct the Tender Offer at its board of
directors meeting held on October 30, 2014, with the aim of enhancing the corporate value of
the Target and the Tender Offeror Group (for details relating to this decision, please refer to “1.
Purpose of the Acquisition, Etc.”, “(2) Background Leading to Determination to Implement
Tender Offer, Purpose, Decision-making Process and Management Policy after Tender
Offer.”)The Tender Offeror took into account the contents and analysis results stated in theequity valuation analysis received from Mitsubishi UFJ Morgan Stanley Securities andcomprehensively considered factors such as whether the board of directors of the Target
would accept the Tender Offer; the results of due diligence in relation to the Target; market
share price movements of the Target’s common shares during the most recent six months;
examples of premiums added to tender offer prices in past examples of tender offers forshares by entities other than issuers; and the expected number of subscriptions to the Tender
Offer. Furthermore, after concluding that presenting to the existing shareholders of the Target
a purchase price with a reasonable premium added to the market price of the Target’s commonshares that was likely to reflect the current financial and market environment would bereasonable, the final Tender Offer Price was determined at 1,430 yen at the meeting of theboard of directors held on October 30, 2014.

(Measures to Ensure the Fairness of the Tender Offer, such as Measures to Ensure the Fairnessof the Tender Offer Price and Measures to Prevent Conflicts of Interest)(i)

Acquisition of an equity value analysis from a third-party appraiser for the Tender
OfferorPlease refer to “(4) Basis for Calculation of Acquisition Price,” “2) Background to
Calculation” above.

(ii) Acquisition of an equity value analysis from a third-party appraiser for the Target
According to the Press Release of the Target, the board of directors of the Target
requested the calculation of the equity value of the common shares of the Target from
Daiwa Securities, which is a financial advisor as a third-party appraiser that is
independent from the Target and the Tender Offeror, in order to ensure fairness in theprocess of decision-making regarding the Tender Offer Price that was indicated by theTender Offeror, and obtained the equity value analysis on October 29, 2014. However,
the Target has not received an opinion regarding the fairness of the Tender Offer Price(Fairness Opinion) from Daiwa Securities.
- 16 -

Based on the request from the Target, Daiwa Securities performed the calculationby using the average market share price method, an objective calculation method basedon the market price that will be formed in the capital market, reflecting various factors
such as the profitability, asset characteristics, and future potential of the Target; thecomparable company analysis method, which calculates the equity value through a
comparison of market share prices and financial indicators such as the profitability oflisted companies engaged in relatively similar businesses to those of the Target; and DCF
Analysis, which calculates the equity value by taking into consideration assumptions thatare considered reasonable, such as earnings forecasts and investment plans based on thebusiness plans of the Target, and then discounting free cash flows that the Target is
expected to generate in the future by a certain discount rate corresponding to businessrisk to arrive at the net present value. The range of values per share of the common stockof the Target that Daiwa Securities calculated based on the above methods are as follows.
Average market share price method
Comparable company analysis method
DCF method

1,069 yen to 1,096 yen
905 yen to 1,387 yen
1,342 yen to 1,712 yen

Under the average market share price method, using October 29, 2014, the analysis
preparation date, as the record date, the range of value per share of the common stock of
the Target was calculated as 1,069 yen to 1,096, based on the closing price of 1,069 yen
for the common shares of the Target on the Tokyo Stock Exchange; the simple average of
1,082 yen for closing share prices during the past month; the simple average of 1,096
yen for closing share prices during the past three months; and the simple average of
1,081 yen for closing share prices during the past six months.
Under the comparable company analysis method, after considering similarity with
BPO operations, the major business of the Target, Daiwa Securities extracted, among
publicly listed companies in Japan, Toppan Forms Co., Ltd., Trans Cosmos Co., Ltd.,
Moshi Moshi Hotline, Inc., Prestige International Inc., and Comtec Inc. as similar
companies, and using EBITDA multiples, calculated the value per share of the common
stock of the Target as 905 yen to 1,387 yen.
Using the DCF Analysis, Daiwa Securities evaluated the enterprise value by taking
into account assumptions that are considered reasonable, such as earnings forecasts andinvestment plans based on business plans from the fiscal year ending March 31, 2015 to
the fiscal year ending March 31, 2018, which were prepared by the Target, and thendiscounting free cash flows that the Target is expected to generate in the future by acertain discount rate corresponding to business risk to arrive at the net present value. It
adopted a discount rate of 7.59% to 9.37%, and in calculating the going concern value, it
used the constant-growth rate model and calculated the perpetual growth rate as 0.50% to
1.00%.
The financial forecasts based on the Target’s business plans that were used as theassumptions for the DCF Analysis calculation are as follows. In regard to these financial
forecasts, there are no fiscal years for which large changes in profit have been projected.
Moreover, among synergies that are expected to be realized from the execution of theTransaction, based on the assumption that the Transaction will be executed, thesefinancial forecasts reflected a reduction in listing maintenance costs stemming from thedelisting of the Target and various expenses that the Target will incur in relation to the- 17 -

Transaction. However, the effects of various measures after the Transaction are notreflected in these financial forecasts, as it is difficult at present to specifically estimate
their impact on earnings.

- 18 -

(Millions of yen)
Fiscal 2015
(March 31, 2015)(9 months)

Fiscal 2016

Fiscal 2017

Fiscal 2018

(March 31, 2016)(March 31, 2017)(March 31, 2018)

Net sales

25,201

32,56033,56034,660Operating profit

1,298

1,373

1,528

1,703

EBITDA

1,706

1,880

1,988

2,131

311

1,044

956

1,025

Free cash flow

Daiwa Securities does not correspond to a party that is related to the Tender Offeror or
the Target and does not have any significant conflict of interest that should be mentioned
in regard to the Transaction, including the Tender Offer.
Moreover, the target of the Tender Offer includes the Stock Acquisition Rights, but
the Stock Acquisition Rights were all issued as stock options to Directors, and in termsof conditions relating to the exercise of rights pertaining to the Stock Acquisition Rights,
exercise conditions have been attached, such as the ability to exercise Stock Acquisition
Rights only during a period of 10 days from the day following the day when Stock
Acquisition Right holders lose their positions as Directors of the Target. Therefore, even
if the Tender Offeror acquires the Stock Acquisition Rights through the Tender Offer, it
will not be able to exercise them, and in view of this, the Target has not requested athird-party appraiser to calculate the value of the Stock Acquisition Rights.
(iii) Establishment of an independent third-party committee for the Target
According to the Press Release, in order to exclude arbitrariness in the decision-makingof the Target relating to the Tender Offer and to establish a decision-making process thatis fair, transparent and objective, the board of directors of the Target established athird-party committee that is composed of members that include external experts and are
independent from the Tender Offeror and the Target. It selected three members for thethird-party committee, namely, Omou Yamazaki, who is independent from the Tender
Offeror and the Target as a member of the third-party committee (Chairman, Certified
Public Accountant, Licensed Tax Accountant and Representative Director of GG
Partners), Hiroshi Kuniya (outside Company Auditor at the Target) and Koki Tada
(Attorney, Partner at Hayabusa Asuka Law Offices). In addition, the Target initiallyselected these three persons and has not changed the members of the third-party
committee. As the premise for considering the contents of the opinion that the Target
should declare in relation to the Tender Offer, the board of directors of the Target
resolved that the third-party committee should advise regarding the following: (a) the
rationality of the objective of the Transaction (including consideration of whether theTransaction will contribute to the corporate value of the Target); (b) the appropriatenessof the terms and conditions of the Transaction (including the appropriateness of theTender Offer Price and the consideration for the two-step acquisition that is planned after
the Tender Offer as well as the investigation process and course of negotiations relating
to the Transaction; (c) the transparency and fairness of the Transaction procedures(including consideration regarding the interests of the Target’s shareholders); and (d)- 19 -

whether the Transaction will be disadvantageous to minority shareholders of the Target
or not (referred to in general as the “Terms of Reference” hereafter.)
The third-party committee held a total of five meetings from September 24, 2014 to
October 29, 2014, and prudently considered the Terms of Reference.
Specifically, in relation to the investigation concerned, the third-party committee
first received an explanation from the Target based on various materials submitted by theTarget regarding the contents of the proposals made by the Tender Offeror, the objectiveof the Transaction, and the specific details of the corporate value of the Target, which is
expected to improve due to the Transaction. Then it received an explanation regarding
the management organization and policies after the Transaction and the various terms
and conditions of the Transaction, received an explanation regarding the business plansof the Target, and conducted a question and answer session regarding these. In addition,
the third-party committee received an explanation from the Tender Offeror regarding thecontents of the proposals made by the Tender Offeror, the objective of the Transaction,
the specific details of the corporate value of the Target, which is expected to improve dueto the Transaction, the management organization and policies after the Transaction andthe various terms and conditions of the Transaction. It then conducted a question andanswer session regarding these. Furthermore, the third-party committee received an
explanation from Daiwa Securities regarding the calculation of the equity value of thecommon shares of the Target, based on the equity value analysis that Daiwa Securities
submitted to the Target, and conducted a questions and answer session regarding these.
After receiving the respective explanations and contents of questions and answers, thethird-party committee engaged in prudent investigations repeatedly from the viewpointof enhancing the corporate value of the Target.
As a result of these investigations, the third-party committee submitted the Reportcontaining the following to the board of directors of the Target on October 29, 2014
based on the Terms of Reference. (a) The Transaction is likely to contribute to an
improvement in the corporate value of the Target and its objective is reasonable because
in order to strengthen the competitiveness of the Tender Offeror Group, including theTarget, a business and functional reorganization of the Tender Offeror Group is necessary,
the Transaction will enable an agile and flexible business and functional reorganization,and concentrating the operating base and management resources in the Tender Offeror
Group related to BPO operations at the Target will lead to the reinforcement of theTarget’s operations. (b) It is planned to calculate the amount of cash delivered at the timeof the two-step acquisition so that it is equivalent to the Tender Offer Price multiplied by
the number of common shares of the Target that were held by shareholders and,regarding the conditions of the Tender Offer as well, a comparatively long Tender Offer
period has been established. Moreover, the Tender Offer Price is considered to bereasonable in view of the following: [i] among the results of the calculation of the equity
value of the common shares of the Target by Daiwa Securities, the price exceeds therange of calculation results based on the average market share price method and thecomparable company analysis method, and is within the range of the calculation results
based on the DCF Analysis; [ii] it is a price to which a reasonable premium has been
added in comparison with recent cases of the same type; and [iii] earnest negotiations
were conducted between the Target and the Tender Offeror, and the price was increased
from the initially proposed price. In addition to the previous factors, the conditions of the- 20 -

Transaction are reasonable, as the price was decided after sufficiently adopting measures
to eliminate any conflict of interest. (c) The procedures of the Transaction are transparent
and fair in light of the fact that Directors holding a conflict of interest with the Target did
not participate in the decision-making process relating to the Transaction, an independent
advisor was appointed, and the equity value analysis was also obtained from athird-party appraiser. Therefore, (d) it can be accepted that the Transaction will not
disadvantage the minority shareholders of the Target.
(iv) Advice from an independent law firm for the Target
According to the Press Release of the Target, the Target received legal advice regarding
the decision-making process, the decision-making method and other points to bear inmind in relation to the expression of an opinion regarding the Tender Offer from
City-Yuwa Partners, its legal advisor that is independent from the Tender Offeror and theTarget, in order to ensure transparency and rationality in the decision-making process
related to the Transaction, including the Tender Offer.
(v) Approval of all Directors and Company Auditors without any conflicts of interest at theTargetAccording to the Press Release of the Target, the board of directors of the Target
conducted discussions and investigations prudently from the viewpoint of whether theTransaction would be able to improve the corporate value of the Target or not andwhether the Tender Offer Price and other terms and conditions for the Transaction werereasonable or not, while paying maximum respect to the contents of the Report obtained
from the third-party committee, and in consideration of the legal advice obtained from
City-Yuwa Partners and the contents of equity value analysis finally obtained from
Daiwa Securities, the third-party appraiser.
As a result, the board of directors of the Target concluded the following regarding
the Transaction: [i] it is beneficial in terms of improving the corporate value of theTarget; [ii] the Tender Offer Price and other terms and conditions are reasonable withrespect to the shareholders of the Target, and the Tender Offer will provide an
opportunity for the shareholders of the Target to sell their shares at a price with areasonable premium.
Then, at a meeting of the board of directors held October 30, 2014, the Target
resolved to declare its opinion of support for the Tender Offer and to recommend to theTarget’s shareholders that they subscribe to the Tender Offer.
Moreover, with regard to the Stock Acquisition Rights, the Target has not requested
a third-party appraiser to calculate the value of the Stock Acquisition Rights, in view ofthe following. Firstly, the Stock Acquisition Rights were all issued as stock options to
Directors; and secondly, in terms of conditions relating to the exercise of rights
pertaining to the Stock Acquisition Rights, exercise conditions have been attached, suchas the ability to exercise Stock Acquisition Rights only during a period of 10 days fromthe day following the day when Stock Acquisition Right holders lose their positions as
Directors of the Target. Therefore, even if the Tender Offeror acquires the Stock
Acquisition Rights through the Tender Offer, it will not be able to exercise them. In
addition, as the Tender Offeror did not examine the appropriateness of the acquisition- 21 -

price for the Stock Acquisition Rights, it resolved to entrust the decision of whether tosubscribe to the Tender Offer or not to the holders of the Stock Acquisition Rights.
At the board of directors meeting mentioned above, all Directors apart from
Jousaku Yanai (“Mr. Yanai”, hereafter) an outside Director of the Target, passed theresolution concerned unanimously. In addition, all the Company Auditors (of the threeCompany Auditors, three Company Auditors were in attendance) (of whom three areoutside Company Auditors) attended the above board of directors meeting and expressed
the opinion that they had no objection to the resolution concerned. However, as Mr.
Yanai is concurrently serving as an executive officer of the Tender Offeror and is at riskof having a conflict of interest with the Target in regard to the Transaction, he did notparticipate at all in the deliberation and resolution of the agenda related to theTransaction, including the Tender Offer, at the above board of directors meeting of theTarget and did not take any part in the discussions and negotiations with the Tender
Offeror from the standpoint of the Target, due to his position as a person with special
interests.
(vi) Guarantee of objective conditions that will ensure the appropriateness of the price andthe fairness of the Tender Offer
The Tender Offeror has set the tender offer period of the Tender Offer (the “Tender Offer
Period” hereafter) at 30 business days, while the shortest period set forth by law is 20
business days. By setting the Tender Offer Period at a comparatively long period, theTender Offeror intends to ensure an opportunity for the shareholders of the Target andthe holders of stock acquisition rights associated with the Stock Acquisition Rights tomake appropriate decisions regarding the acceptance of the Tender Offer, as well as toensure an opportunity for persons other than the Tender Offeror to make competingpurchases related to the common shares of the Target and the Stock Acquisition Rights
and thereby guarantee the fairness of the Tender Offer Price.
Further, there are no agreements between the Tender Offeror and the Target which
may restrict communications, etc. between persons proposing a competing purchase andthe Target such as an agreement including provisions for the protection of transactions
which may prohibit communications between the Target and persons proposing acompeting purchase.
In such a way, the Tender Offeror has paid consideration to ensuring the fairness of
the Tender Offer by ensuring an opportunity for competing purchases, in tandem with theestablishment of the above Tender Offer Period.

In addition, the Tender Offeror has not set a minimum number of shares to be purchasedin the Tender Offer, but even though it has not set a minimum number of shares to bepurchased, it believes it has sufficiently considered the interests of minority shareholders
through measures (i) to (vi) above, which aim to ensure the fairness of the Tender Offer.

- 22 -

(5) Number of Share Certificates, etc. to be Purchased
Number of shares to bepurchased

Minimum number of shares tobe purchased

Maximum number of shares tobe purchased― (shares)― (shares)

5,210,898 (shares)(Note 1)

No maximum or minimum number of shares to be purchased has been set in the Tender
Offer, so the Tender Offeror will purchase all of the tendered share certificates, etc.

(Note 2)The Tender Offeror does not intend to acquire the treasury shares held by the Target
through the Tender Offer.

(Note 3)The number of shares to be purchased indicates the maximum number of shares of theTarget that the Tender Offeror will acquire through the Tender Offer. The applicable
number of shares to be purchased will be the total number of issued and outstanding
common shares of the Target as of September 30, 2014 (10,500,000 shares) stated in
the Second-Quarter FY2015 Financial Results, with the addition of the number ofshares of the Target that are the object of 68 options in the 1st issue of stock acquisitionrights, 96 options in the 2nd issue of stock acquisition rights, 107 options in the 3rd
issue of stock acquisition rights, 100 options in the 4th issue of stock acquisition rights,
165 options in the 5th issue of stock acquisition rights, and 169 options in the 6th issueof stock acquisition rights as of March 31, 2014, which were stated in the Financial
Statements for the 50th Term, and 134 options in the 7th issue of stock acquisitionrights as of August 20, 2014, which were stated in the “Notification Concerning
Issuance of Stock Options (Stock Acquisition Rights)” announced on August 20, 2014
(83,900 shares in aggregate, for a total of 10,583,900 shares), and with the deduction oftreasury shares held by the Target as of September 30, 2014 (119,002 shares), whichwere stated in the Second-Quarter FY2015 Financial Results and the number of shares
held by the Tender Offeror (5,254,000 shares) as of October 30, 2014.

(Note 4)The Stock Acquisition Rights may be exercised by the end of the Tender Offer Period,
but the common shares of the Target that are issued and delivered as a result of such
exercise shall also be the target of the Tender Offer.

(Note 5)

Shares of less than one unit shall also be eligible for the Tender Offer. In addition, theTarget may purchase its own shares during the Tender Offer Period, pursuant toapplicable ordinances, if shareholders holding shares of less than one unit exercise theirright to request the purchase of their shares in accordance with laws and ordinances.

(6) Changes in Shareholdings due to the Purchase
Number of voting rights represented by sharecertificates, etc. held by the Tender Offeror
before the Purchase

52,540 shares

Shareholding Ratio of 50.21%
before the Purchase

Number of voting rights represented by sharecertificates, etc. held by Special Related Parties
before the Purchase

3,031 shares Shareholding Ratio of 2.90%
before the Purchase

Number of voting rights represented by sharecertificates, etc. to be purchased

52,108 shares Shareholding Ratio of 100%after the Purchase- 23 -

Number of voting rights of all shareholders of
the Target

103,799 shares(Note 1) The “Number of voting rights represented by share certificates, etc. to be purchased”
indicates the number of voting rights represented by the number of shares to bepurchased (5,210,898 shares) in the Tender Offer.
(Note 2) The “Number of voting rights represented by share certificates, etc. held by Special
Related Parties before the Purchase is the total number of voting rights represented byshare certificates, etc. owned by each Special Related Party (including share certificates,etc. relating to each case mentioned in each item of Article 7.1 of the Cabinet Order for
the Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No. 321
of 1965; including subsequent amendments; referred to as the “Order” hereafter) but
excluding shares held by parties that are excluded from Special Related Parties based on
Article 3.2.1 of the “Cabinet Office Ordinance on Disclosure Required for Tender Offer
for Share Certificates, etc. by Person Other than Issuer” (Ordinance of the Ministry of
Finance No. 38 of 1990; including subsequent amendments; referred to as the “Cabinet
Office Ordinance” hereafter) with respect to the calculation of the ownership ratio ofshare certificates, etc. under each item of Article 27-2.1 of the Act among treasury shares
held by the Target and Special Related Parties.) However, in the case of the Tender Offer,as share certificates, etc. held by special related parties (but excluding treasury shares
held by the Target) are also eligible for the Tender Offer, in the case of calculation of the“Shareholding Ratio after the Purchase,” the “Number of voting rights represented byshare certificates, etc. held by special related parties before the purchase” has not been
included in the numerator.
(Note 3) The “Number of voting rights of all shareholders of the Target” is the number of voting
rights of all shareholders, etc. as of March 31, 2014 indicated in the quarterly report for
the first quarter of the 51st Term filed by the Target on August 7, 2014. However, in thecase of the Tender Offer, as shares of less than one unit and the Stock Acquisition Rights
are also eligible for the Tender Offer, with respect to the calculation of the “Shareholding
Ratio before the Purchase” and the “Shareholding Ratio after the Purchase,” the numberof voting rights (104,648) in relation to 10,464,898 shares, which represents the total
number of issued and outstanding common shares of the Target as of September 30, 2014
(10,500,000 shares) stated in the Second-Quarter FY2015 Financial Results, with theaddition of the number of shares of the Target that are the object of 68 options in the 1stissue of stock acquisition rights, 96 options in the 2nd issue of stock acquisition rights,
107 options in the 3rd issue of stock acquisition rights, 100 options in the 4th issue ofstock acquisition rights, 165 options in the 5th issue of stock acquisition rights, and 169
options in the 6th issue of stock acquisition rights as of March 31, 2014, which werestated in the Financial Statements for the 50th Term, and 134 options in the 7th issue ofstock acquisition rights as of August 20, 2014, which were stated in “Notification
Concerning Issuance of Stock Options (Stock Acquisition Rights)” announced on August20, 2014 (83,900 shares in aggregate, for a total of 10,583,900 shares), and with the
deduction of treasury shares held by the Target as of September 30, 2014 (119,002
shares), which were stated in the Second-Quarter FY2015 Financial Results, has been
calculated as the denominator.

- 24 -

(Note 4) Figures indicating the “Shareholding Ratio before the Purchase” and the “Shareholding
Ratio after the Purchase” have been rounded to two decimal places.
(7) Tender Offer Cost: 7,451,584,140 yen(Note) The “Tender Offer Cost (yen)” indicates the product of the number of shares to bepurchased (5,210,898 shares) and the Tender Offer Price per share (1,430 yen).

(8) Method of Settlement
1) Name and Location of Head Office of Financial Instruments Business Operator or Banks, etc.,
in Charge of Settlement of the Tender Offer
Mitsubishi UFJ Morgan Stanley Securities

5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyokabu.com Securities Co., Ltd. (Subagent) 3-2, Otemachi 1-chome, Chiyoda-ku, Tokyo
2) Settlement Commencement Date
December 22, 2014 (Monday)
3) Method of Settlement
Notice of any purchase through the Tender Offer will be sent without delay after the
expiration of the Tender Offer Period to the address or location of the tendering shareholder(in the case of a non-Japanese shareholder, to its standing proxy). Delivery by the Subagent
will be carried out electronically via the post-log-in screen.
Purchases will be made in cash. The proceeds relating to share certificates, etc. purchased will
be sent by the Tender Offer Agent or Subagent to the location specified by the tendering
shareholder (in the case of a non-Japanese shareholder, to its standing proxy) without delay
from the settlement commencement date onward, based on the instructions of the tendering
shareholder (in the case of a non-Japanese shareholder, to its standing proxy.)4) Method of Return of Share Certificates, etc.
In the event that the Tender Offeror does not purchase all of the tendered shares in accordancewith the conditions described in “2) Conditions of Withdrawal of Tender Offer, Details thereof
and Method of Disclosing the Withdrawal” in “(9) Other Conditions and Methods of theTender Offer” below, the Tender Offeror will return the share certificates, etc. promptly after
the settlement commencement date (if the Tender Offer is withdrawn, the date of withdrawal.)
Shares will be returned by restoring the record to the status immediately before the shareswere tendered, and in the case of the Stock Acquisition Rights, documents submitted whentendering the Stock Acquisition Rights will be respectively returned by delivery to thetendering shareholder (in the case of a non-Japanese shareholder, to its standing proxy) or sent
to the address of the tendering shareholder (in the case of a non-Japanese shareholder, to thatof its standing proxy) based on the instructions of the tendering shareholder.

- 25 -

(9) Other Conditions and Methods of the Tender Offer
1) Conditions and Details in Each Item of Article 27-13.4 of the Act
The Tender Offeror has not set a maximum or minimum number of share certificates, etc. tobe purchased. The Tender Offeror will purchase all of the tendered share certificates, etc.
2) Conditions of Withdrawal of Tender Offer, Details thereof and Method of Disclosing theWithdrawal
Upon the occurrence of any event falling under the provisions of Article 14.1, Items 1.1
through 1.9 and Items 1.12 through 1.18, Item 3.1 through 3.8 and 3.10, and Article 14.2,
Items 3 through 6 of the Order, the Tender Offeror may withdraw the Tender Offer. In theTender Offer, “events equivalent to the events set forth in Items 3.1 through 3.9,” asprescribed in Article 14.1, Item 3.10 of the Order, refers to the following case: where it isfound that there is a false statement regarding, or an omission of, a material matter to be stated,in the statutory disclosure documents which the Target submitted in the past, and where theTender Offeror was not aware of the false statement or omission and, despite using due care,
was unable to be aware of the false statement or omission.
If it intends to withdraw the Tender Offer, the Tender Offeror will give an electronic public
notice and provide notice thereof in the Nihon Keizai Shimbun. However, if it is difficult togive such public notice by the last day of the Tender Offer Period, the Tender Offeror will
make a public announcement by the method set out in Article 20 of the Cabinet Office
Ordinance and give public notice immediately after the announcement.
3) Conditions of Reduction of Tender Offer Price and Method of Disclosure of Reduction
Under the provisions of Article 27-6.1, Item 1 of the Act, if the Target conducts any act set out
in Article 13.1 of the Order during the Tender Offer Period, the Tender Offeror may reduce theTender Offer Price in accordance with the standards prescribed in Article 19.1 of the Cabinet
Office Ordinance.
If it intends to reduce the Tender Offer Price, the Tender Offeror will give an electronic
public notice and provide notice thereof in the Nihon Keizai Shimbun. However, if it isdifficult to give such public notice by the last day of the Tender Offer Period, the Tender
Offeror will make a public announcement by the method set out in Article 20 of the Cabinet
Office Ordinance and give public notice thereof immediately after the announcement. If theTender Offer Price is reduced, the Tender Offeror will also purchase at the reduced Tender
Offer Price the share certificates, etc. tendered prior to the date of the public notice.
4) Matters Concerning Right of Tendering Shareholders to Cancel Tender
Tendering shareholders may cancel their tender under the Tender Offer at any time during theTender Offer Period. If a tender agreement with respect to the Tender Offer Agent is canceled,
the tendering shareholder must deliver or send a document stating that it wishes to cancel theagreement pertaining to the Tender Offer (“Cancellation Statement”) along with the tender
offer application acceptance receipt to the head office or a branch office in Japan of theTender Offer Agent that accepted the application, by 4:00 p.m. on the last day of the Tender
Offer Period. The cancellation of an agreement will take effect when the Cancellation
Statement is delivered to or reaches the parties specified below. However, the Cancellation
Statement sent by the tendering shareholder must reach the parties specified below by no later
than 4:00 p.m. on the last day of the Tender Offer Period.
- 26 -

When canceling an agreement tendered via kabu.com Securities Co., Ltd., the Subagent,
the tendering shareholder should complete the cancellation procedures by 4:00 p.m. on thelast day of the Tender Offer Period via the post-log-in screen in accordance with the method
described in “Tender offer (TOB)” (http://kabu.com/item/tob/) on that company’s website(http://kabu.com/).
Agent with Authority to Receive Cancellation Statements
Mitsubishi UFJ Morgan Stanley Securities 5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo(or any branch of Mitsubishi UFJ Morgan Stanley Securities in Japan)
However, the Tender Offeror may not make any claim for damages or the payment of apenalty to a tendering shareholder even if that tendering shareholder cancels an agreement. In
addition the Tender Offeror will bear the costs of returning tendered share certificates, etc.
5) Method of Disclosure if Conditions, etc. of the Tender Offer are Changed
Unless otherwise prohibited under the provisions of Article 27-6.1 of the Act and Article 13 of
the Order, the Tender Offeror may change any terms and conditions concerning theacquisition during the Tender Offer Period.
In this case, the Tender Offeror will give an electronic public notice and provide notice
thereof in the Nihon Keizai Shimbun. However, if it is difficult to give such public notice by
the last day of the Tender Offer Period, the Tender Offeror will make a public announcementby the method set out in Article 20 of the Cabinet Office Ordinance and give public notice
thereof immediately after the announcement. If the Tender Offer Price is changed, the Tender
Offeror will also purchase the share certificates, etc. tendered prior to the date of the public
notice based on the changed acquisition conditions.
6) Method of Disclosure When Submitting an Amendment Statement
If an amendment statement is filed with the Director-General of the Kanto Local Finance
Bureau in Japan (except for the cases set forth in the proviso of Article 27-8.11 of the Act), theTender Offeror will immediately announce the details set out in that amendment statementthat relate to the contents of the public notice of the commencement of the Tender Offer, by
the method prescribed by Article 20 of the Cabinet Office Ordinance. The Tender Offeror will
also immediately change the Tender Offer Explanatory Statement and deliver the amended
document to the tendering shareholders who have already received the Tender Offer
Explanatory Statement. However, if the changes are only minor in nature, the Tender Offeror
will prepare a document stating the reasons for such amendments, the items that have been
amended and the amended contents, and deliver that document to the tendering shareholders.
7) Method of Disclosure of Results of Tender Offer
The Tender Offeror will publicly announce the results of the Tender Offer the day after thelast day of the Tender Offer Period, in accordance with the provisions of Article 9-4 of theOrder and of Article 30-2 of the Cabinet Office Ordinance.
8) OtherThis Tender Offer is not being made, either directly or indirectly, in or to the United States.
Nor are the U.S. postal service or other means or instrumentality of interstate or internationalcommerce, including but not limited to, telephones, telexes, facsimile transmissions, e-mails
or internet communications, being utilized in the Tender Offer. The Tender Offer is also not- 27 -

being made through securities exchange facilities in the United States. The Tender Offeror
cannot accept applications to the Tender Offer made by the above methods or means or
through the above facilities or from the United States.
The Tender Offer Registration Statement or related purchase documentation will not bedelivered or sent by the postal service or any other means in, to, or from the United States.
The Tender Offeror will not accept any applications to the Tender Offer that are in violation,
directly or indirectly, of the above restrictions.
When applying to the Tender Offer, tendering shareholders (in the case of non-Japaneseshareholders, their standing proxy) may be requested to make declarations and warranties to
the Tender Offer Agent or Subagent concerning the following.
The tendering shareholder is not resident in the United States at either the time of
application or when sending Tender Offer application forms. The tendering shareholder has
not, directly or indirectly, received or sent any information (including copies) regarding theTender Offer in, to or from the United States. The tendering shareholder has not, directly or
indirectly, used the U.S. postal service, or any other means or instrumentality of U.S.
interstate or international commerce, including, but not limited to, telephones, telexes,
facsimile transmissions, e-mails or internet communications, and has not used securities
exchange facilities in the United States to sign and deliver Tender Offer application forms.
The tendering shareholder is not acting as an agent without discretionary power or as adepositary for others (excluding cases where the person concerned submits all purchase
instructions from outside the United States.)(10) Date of Public Notice of Commencement of the Tender Offer
October 31, 2014 (Friday)(11) Tender Offer Agent
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 5-2, Marunouchi 2-chome, Chiyoda-ku,
Tokyokabu.com Securities Co., Ltd. (Subagent) 3-2, Otemachi 1-chome, Chiyoda-ku, Tokyo

3.

Management Policy and Outlook after Completion of the Tender Offer(1) Management Policy after Completion of the Tender Offer
Please refer to “1. Purpose of the Acquisition, etc.”, “(2) Background Leading to Determination
to Implement Tender Offer, Purpose, Decision-making Process and Management Policy after
Completion of the Tender Offer”, “(4) Policy on Restructuring, etc. after the Tender Offer(matters related to the so-called two-step acquisition)” and “(5) Likelihood of Delisting andReasons Therefor”.

- 28 -

(2) Future Outlook
The Tender Offer will have a minimal impact on the consolidated earnings of the Tender
Offeror.

4.

Other Information(1) Agreements between the Tender Offeror and the Target or Its Directors
1) Agreements between the Tender Offeror and the Target
According to the Press Release of the Target, the Target resolved at a meeting of its board of
directors held on October 30, 2014 to express its opinion in support of the Tender Offer, torecommend that the shareholders of the Target tender their shares in the Tender Offer, and to
entrust the decision on whether to tender the Stock Acquisition Rights in the Tender Offer or
not to the holders of the Stock Acquisition Rights. For details relating to the decision-making
process of the Target in this regard, please refer to the Press Release of the Target and “2.
Overview of the Acquisition, etc.”, “(4) Basis for Calculation of Acquisition Price” and “2)Background to Calculation”.
2) Agreements between the Tender Offeror and Directors of the Target
Not applicable.
3) Background Leading to Determination to Implement Tender Offer, Purpose, Decision-making
Process and Management Policy after Completion of the Tender Offer
Please refer to the above “1. Purpose of the Acquisition, etc.”, “(2) Background Leading to
Determination to Implement Tender Offer, Purpose, Decision-making Process andManagement Policy after Completion of the Tender Offer”.
4) Measures to Ensure the Fairness of the Tender Offer, such as Measures to Ensure the Fairnessof the Tender Offer Price and Measures to Prevent Conflicts of Interest
Please refer to the above “2. Overview of the Acquisition, etc.”, “(4) Basis for Calculation of
Acquisition Price,” “1) Basis of Calculation” and “2) Background to Calculation”.

(2) Other Information Necessary for Investors to Decide whether to Tender Their Shares in
the Tender Offer
1) Release of Second-Quarter Fiscal 2015 Financial Results
The Target released its Second-Quarter Fiscal 2015 Financial Results (prepared pursuant toJapanese GAAP), with the contents below, on October 30, 2014. The status of theconsolidated operating results of the Target for this period, based on the above announcement,
is shown below. It should be noted that the contents of this announcement have not been
audited by an auditing firm under the provisions of Article 193-2.1 of the Act. In addition, theoverview of the contents of the announcement is a partial excerpt of the contents that wereannounced by the Tender Offeror, and the Target is not in a position to independently verify,
and has not actually verified, the accuracy and credibility of this announcement. Please referto the contents of this announcement for details.

- 29 -

(i)Operating Results of AGREX INC. (Consolidated)
First Two Quarters of
the Fiscal Year Ending March 31, 2015
(51st Term)

Accounting Period
Net sales¥15,089,491 thousand

Cost of sales¥12,713,101 thousand

Selling, general and administrative expenses¥1,920,035 thousand

Non-operating income¥21,937 thousand

Non-operating expenses¥19,444 thousand

Net income (Quarterly)¥261,448 thousand(ii) Data per Share (Consolidated)
Second Quarter of
the Fiscal Year Ending March 31, 2015
(51st Term)

Accounting Period
Net income per share (Quarterly)¥25.19Dividend per share¥12.00Net assets per share¥840.33

2) Revision to Dividend Forecast
At its board of directors meeting held on October 30, 2014, the Target resolved not to pay a
year-end dividend for the fiscal year ending March 31, 2015 (Fiscal 2015) and to abolish theshareholder special benefit plan, regardless of whether the Percentage of Tender reaches
two-thirds or more or not (6,920,666 shares or more), on the condition that the Tender Offer ismade. For details, please refer to the “Notification Concerning Revision to Year-End Dividend
Forecast for Fiscal 2015 and Abolition of Shareholder Special Benefit Plan,” which the Target
announced on October 30, 2014.

End- 30 -