—SOPHIA UNIVERSITYPRELIMINARY MEMORANDUM＜Negotiation for e-commerce site of Red Corp.＞
1. The significance of Red’s e-commerce site development project for Blue

“Capture the market share in e-commerce site business in Negoland.”By developing the e-commerce site of Red, which is a leading apparel company in Negoland, weare aiming to build up high reputation of our EC business in Negoland, and increase customers.

2. The relationship between Red and Blue
Blue’s interest

Red’s expected interest

1. Get high recognition of ourもの
1. Development and operationof e-commerce site

EC business in Negoland

2. The system that combines

2. The higher fee for our service

e-commercesiteandphysicalstores(Omni-channel Strategy)＜The Trinity Business Solution＞

Stores

We will propose the business model that can drastically
improve Red’s apparel business by combining all theOmnichannel
StrategyWeb
sitechannels including BVN. It enables to increase the sales
and improve customer satisfaction by effective use of theBVN

information on inventory and customers. Also, Red will beable to produce new products that reflects customer’s pref
erence and market trend more efficiently.

3. The strategy of this negotiation

Provide EC developing service and on-going service with the best quality
Aiming for the long term contract and maximizing our profit＜TOP＞
Initial Fee: US$20 million
Commission Rate: 30%＜BOTTOM＞
Initial Fee: US$15 million
Commission Rate: more than 20%(if the term is 5 years, 20%)(cf. Blue’s confidential information).

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—SOPHIA UNIVERSITYPRELIMINARY MEMORANDUM
4.

Timing to utilize BATNA

We would mention Green as BATNA when Red insists on the contract for shorter than 2years, or for shorter than 5 years with Commission Rate 20%.
This time, if the negotiation between Red and Blue break down, we would negotiate with Green,
who conducts the apparel business in Negoland. Comparing Green with Red who has the highstatue in Negoland, developing e-commerce site of Green is less attractive than that of Red. We
would like to utilize Green as BATNA in order to achieve our target.

5.

TARGET and BOTTOM of each item

AIM→ The most desirable decision for Blue in the expected range that Red can accept
BOTTOM→ The last choice that Blue could agree onAIMInitial Fee

Commission Rate

Term of the contract

US$17 million

25%

3 years with automatic
renewal

BOTTOM

US$15 million

20%

2 years(when the term wouldbe 5 years)

6. Negotiation stance of each topic⑴Initial Fee and Commission Rate
We ask Red’s interest in the development of e-commerce site and what Red expects. Then, weare going to explain that in order to satisfy the needs of Red, the substantial amount of Initial Feeand Commission Rate is necessary. We would emphasis that Ongoing Service is not just a simple
operational service, but it has a very important role to increase the number of customers and salesof Red’s apparel business.

⑵The contract term of ongoing service
We may compromise on Commission Rate in order to get the long-term contract by appealing
how profitable it is for Red to be supported by Blue’s Ongoing Service.

⑶The Omni-channel strategy
We will discuss proposals that will be attractive to Red and satisfy Red’s needs flexibly andcreatively.

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—SOPHIA UNIVERSITYPRELIMINARY MEMORANDUM＜Negotiation for the joint development of robots with Red Corp.＞

1.

Significance of co-developing the robots with Red

Strengthen our technology and secure the source of the future profit by developing the Best
quality of robots
Co-development with Red will secure the opportunities to demonstrate and test the robots. We
will develop robots that fit the needs of care business in various countries including Arbitria and
Negoland and strengten our technology. Furthermore, Blue will be able to make a profit because
Red will lease or purchase the robots after the development. We need to improve the financial
performance of robot business by this project.

2. Relationship between two parties upon this businessBlue’s interest

Red’s expected interest

1. Study and develop highest technologies

1. Solve the problem of labor shortage
in Red’s facilities

2. Get the big customer who lease the robots

2. Solve the problem of senior isolationin Negoland

3. The right to utilize the technologies

3. Predominate over other competingin this projectcompanies

3. The strategy of this negotiation

Aim to Become the Top Company in Robot Development Industry
Securing Intellectual Property Rights Are Our Top Priority.
We May Compromise in the Type of Robots and Exclusive Usage
Ownership of the Intellectual property rights is essential to secure the new technologies. We will
improve our technologies and expand our business by using the technologies we could obtainthrough this project. If necessary, we are going to concede on the type of robots or establishing theexclusive use period to get the Intellectual property rights.

4.

The timing to utilize BATNA

We would mention Purple as BATNA when Red disagrees with Blue’s sole ownership of
the intellectual property rights
If negotiation with Red does not go well, we will negotiate with Purple Corporation, who holds
home-visit care business in Arbitria. However, Purple is inferior to Red in the number of thetesting ground and place to lease the robots. Therefore, we will only choose Purple when we cannot
get the ownership of Intellectual Rights of robots.

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—SOPHIA UNIVERSITYPRELIMINARY MEMORANDUM

5. Aim and Bottom of each items
Aim → The most desirable decision for Blue in the expected range that Red can accept
Bottom → The last choice that Blue can agree onType of RobotIntellectual Property

Terms of Exclusive UseRightAIMCommunication Security

1 year/ use at least one

type of robots

robot at each of its
Secure intellectual

BOTTOM

Care Support type of

property rightrobotsfacilities
2 years/ use at least one
robot at each of its
facilities※ If establish exclusive use, the termination clause that is valid when Red denies to lease therobots shall be built

6. Blue’s Position of Each Topic(1) Type of Robots
After identifying Red’s interest in its care business and backgrounds to choose nursing robots as
the first priority, we are going to tell that communication/security type of robots would meet Red’sneeds for the labor shortage and senior isolation. If Red sticks to jointly developing care support
type of robots, we will confirm the intention and we may concede on this issue to secure theintellectual property rights and shorten the period of exclusive use.

(2) Ownership of Intellectual Property Rights
We are going to show our strong attitude toward intellectual property rights, by emphasizing thatBlue is the very party who should own it because Blue is going to provide funds and technology,
and Blue is the company which runs robot business and has know-how already.

(3) Setting Exclusive Use Period
First, we refuse to set exclusive use period because of disadvantages for both parties. If setting theperiod, we would like to make Red promise to use a certain number of robots in all facilities of Red
during the period. Furthermore, we will assure to have a provision that Blue may lease robots toother companies when Red denies to use them during the period.

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