TOYOF Toyota Motor Corp Ltd (PK)

ENFORCEABILITY OF CIVIL LIABILITIES

Toyota is a joint-stock corporation with limited liability incorporated under the laws of Japan. Almost all of Toyota’s directors and audit & supervisory board members reside in Japan. Many of Toyota’s assets and the assets of these persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for investors to effect service of process within the United States upon Toyota or these persons or to enforce against it or these persons judgments obtained in United States courts predicated upon the civil liability provisions of the federal securities laws of the United States. Toyota’s Japanese counsel, Nagashima Ohno & Tsunematsu, has advised it that there is doubt as to the enforceability in Japan, in original actions or in actions for enforcement of judgments of United States courts, of liabilities predicated solely upon the federal securities laws of the United States.

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APPENDIX A

[English Translation for reference purposes only. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail]

SHARE EXCHANGE AGREEMENT

(ENGLISH TRANSLATION)

Share Exchange Agreement

Toyota Housing Corporation (“THC”) and Misawa Homes Co., Ltd. (“Misawa Homes”) entered into this Share Exchange Agreement (this “Agreement”) as follows on May 9, 2019 (the “Execution Date”). As of the Execution Date, THC is a directly owned subsidiary of Toyota Motor Corporation (address: 1 Toyota-cho, Toyota City, Aichi Prefecture; hereinafter “Toyota”) and is scheduled to become a wholly owned direct subsidiary of Toyota by the Record Time defined in Article 3, paragraph 1 of this Agreement.

THC and Misawa Homes shall conduct a share exchange (the “Share Exchange”) in accordance with the provisions of this Agreement and THC shall acquire all of the issued shares of Misawa Homes (excluding shares of Misawa Homes held by THC; hereinafter the same applies in this Agreement) through the Share Exchange so that THC will become the wholly owning parent company of Misawa Homes resulting from the Share Exchange and Misawa Homes will become the wholly owned subsidiary of THC resulting from the Share Exchange.

The trade names and addresses of THC and Misawa Homes are as set out below.

App. A-1

Notwithstanding the provisions of Article 6, paragraph 1, THC shall, no later than the day before the Effective Date, acquire shares of common stock of Toyota (limited to those free of any security interests or other encumbrances) in a number sufficient for the total number of Toyota shares to be allotted and delivered to the shareholders of Misawa Homes pursuant to the Share Exchange under Article 3, paragraph 1.

This Agreement shall cease to have effect if any of the following events occurs:

This Agreement is governed by and construed in accordance with the laws of Japan. The Tokyo District Court shall have exclusive jurisdiction as the court of first instance with respect to any dispute arising in relation to the performance or interpretation of this Agreement.

If any matter that is not provided in this Agreement or any doubt regarding the terms of this Agreement arises, THC and Misawa Homes shall consult with each other in good faith and resolve such matter or doubt.

(The remainder of this page has been left blank.)

App. A-3

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by affixing their names and seals hereto, and each has retained one (1) original hereof.

May 9, 2019

App. A-4

(Share Exchange Agreement dated as of May 9, 2019)

App. A-5

APPENDIX C

[English Translation for reference purposes only. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail.]

May 9, 2019

To: Board of Directors, Misawa Homes Co., Ltd.

Opinion

I. Introduction

As the share exchange (the “Share Exchange”) being considered by Misawa Homes Co., Ltd. (“Misawa Homes”) with Toyota Housing Corporation (“Toyota Housing”), where Toyota Housing is the wholly owning parent company resulting from the Share Exchange and Misawa Homes is the wholly owned subsidiary resulting from the Share Exchange, constitutes a significant transaction with the parent company and controlling shareholder, the matters set forth below in “2. Terms of Reference” were referred to us in accordance with Article 441-2 1.(1) of the Securities Listing Regulations of Tokyo Stock Exchange, Inc. (“TSE”). Please note that the Share Exchange is a so-called “triangular share exchange,” and, as such, Misawa Homes’ minority shareholders are delivered as consideration common stock of Toyota Motor Corporation (“Toyota”), the parent company of Toyota Housing, rather than the common stock of Toyota Housing.

This opinion (this “Opinion”) states the findings of a third party committee (the “Third Party Committee”) regarding the terms of reference referred to us by Misawa Homes’ Board of Directors.

Misawa Homes’ Board of Directors referred the following matters to the Third Party Committee:

II. Fundamental Facts

According to Misawa Homes, the details of the purpose of the Share Exchange are as set forth in “1. Purpose of Making Misawa Homes a Wholly Owned Subsidiary through the Share Exchange” of the “Notice Regarding Misawa Homes Co., Ltd. Becoming a Wholly Owned Subsidiary of Toyota Motor Corporation’s Subsidiary Toyota Housing Corporation through a Share Exchange” (the draft press release submitted to the Third Party Committee is as per Exhibit 1; hereinafter, such draft is referred to as the “(Draft) Share Exchange Notice”). Please note that terms used in this Opinion without being defined have the same meaning as terms used in the (Draft) Share Exchange Notice, except for where a different construction is required from the context.

According to the (Draft) Share Exchange Notice, Misawa Homes has been carrying out initiatives such as further reinforcement of its stock asset-related businesses and proactive promotion of business diversification including the town development business and overseas business expansion, as set out in the new medium-term management plan, “First Step for NEXT 50,” in order to build a business portfolio that stops its reliance on the housing business. However, under circumstances where the domestic detached housing market will contract irreversibly in the medium- to long-term as well, Misawa Homes recognizes the necessity of constructing new business models and creating synergies such as through thorough streamlining as further initiatives to ensure its survival and to target sustained growth and evolution.

Since Toyota and Toyota Housing proposed the Share Exchange, Misawa Homes has shared its understanding of the industry and the positioning of Toyota Housing, Misawa Homes and Panasonic Homes Co., Ltd. (“Panasonic Homes”) in the industry and has held frequent discussions regarding the role it should play in the future.

App. C-1

Consequently, Misawa Homes came to the understanding that becoming a wholly owned subsidiary of Toyota Housing through the Share Exchange, as well as promoting the integration of Toyota Housing, Misawa Homes, and Panasonic Homes, etc. from a capital and a business perspective by Toyota and Panasonic together establishing a joint venture company (the “Joint Venture Company”) to carry out the integrated operation of the Toyota Group Subject Businesses and the Panasonic Group Subject Businesses and thereby strengthening their business foundations, and further, after the effective date of the Share Exchange, Misawa Homes becoming a direct, wholly owned subsidiary of the Joint Venture Company, would grow Misawa Homes’ enterprise value over the long term and also contribute to the improvement of the overall enterprise value of the Toyota group and the Panasonic group. Furthermore, not only would the Share Exchange contribute to the improvement of Misawa Homes’ enterprise value, but also providing the Toyota Shares that are the consideration in the Share Exchange would also make it possible to provide shareholders with the benefits of the Integration’s synergies. Therefore, Misawa Homes made the decision to conduct the Share Exchange and the Integration because the reorganization can also be regarded as being beneficial for shareholders. The reasons for this are that the integration from a capital and a business perspective not only delivers further benefits to all related parties as a traditional detached housing business operator, but also enables a fusion of management resources, such as the wealth of technology, expertise, and development resources possessed by each company—mainly from the perspectives of mobility services for the Toyota group, “lifestyle updates” and “lifestyle technology” such as IoT household appliances and equipment for the Panasonic group, and a town development business operator such as compact city-style real estate development for Misawa Homes—which Misawa Homes believes will enable its evolution and growth as a town development business operator through the provision of appealing services with even greater added value. Misawa Homes believes that becoming a wholly owned subsidiary of Toyota Housing and the Integration will create the following specific synergies:

(i) Economies of scale in the housing business

The increased size of operations due to the Integration will create a group boasting a supply of approximately 17,000 houses. With the housing business conducted under the management of the Joint Venture Company, Toyota Housing, Misawa Homes and Panasonic Homes will avoid any redundancy in the areas of their respective strengths; and, by mutually complementing one another in their areas, it will be possible in terms of sales to enhance their competitive advantages while further increasing management efficiency on a Japan-wide scale.

(ii) Realization of efficient growth of the housing business through acceleration of the execution of management strategies

By aiming for acceleration of management strategies at each company through the Integration, we believe that Panasonic Homes’ participation will further accelerate the streamlining initiatives in the housing business currently underway with Toyota Housing, such as cost reduction and streamlining of business in back-office departments through utilization of shared infrastructure as well as cost reduction through joint purchasing. Additionally, it will become possible to proactively carry out sharing of share information and personnel, which, as a listed company, had to be restricted to maintain independence. We believe that this will make it possible to carry out business activities efficiently.

(iii) Creation of new business models by combining real estate and technology

With the sources of value of housing changing from “location” to “the form that the town takes” and from “the building itself” to its “functions and ease of use” in association with changes in individual lifestyles and the diversification of values, we believe that the integration of management resources possessed by each company will enable the realization of town development based on the actual lifestyles of each individual resident. For example, we believe that urban design optimized for mobility services in anticipation of technological advancements such as self-driving vehicles or the provision of new services

App. C-2

and technologies such as the provision of connected homes ¹ that are constantly being updated, will enable the creation of new “lifestyle” value for the entire town, giving the whole area high added value and promoting enhanced competitiveness. In addition, we believe that becoming an unlisted company through the Share Exchange will enable Misawa Homes to carry out agile decision-making without being distracted by how it is viewed by the stock market and that aiming to accelerate the execution of management strategies will contribute to the establishment of new business models, as explained above, as well as expansion.

(iv) Acceleration of overseas expansion

With the town development business as the starting point, in the medium- to long-term, it will be possible to supplement vigorous town development needs centering on Asia and other countries where there is significant population growth. We believe that there is a growing demand for urban infrastructure that alleviates issues caused by urbanization, such as traffic jams, in association with the rapid growth of cities in such regions. Additionally, by becoming an unlisted company through the Share Exchange, it will become possible to flexibly leverage the track record and network that each company has cultivated thus far and also use it as a foothold to enhance the overseas town development business without needing to worry about independence as a listed company.

According to the (Draft) Share Exchange Notice, the details regarding the establishment of a new joint venture company and integrating the housing business by placing the Toyota Group Subject Businesses and Panasonic Group Subject Businesses under the Joint Venture Company can be found in the May 9, 2019 Toyota press release, “Panasonic and Toyota Agree to Establish Joint Venture Related to Town Development Business.” The Third Party Committee received a draft of that press release and confirmed its details (the draft press release submitted to the Third Party Committee is as per Exhibit 2; hereinafter referred to as the “(Draft) Integration Notice”). According to the (Draft) Integration Notice, the Panasonic group and the Toyota group have the same ratio of equity participation in the joint venture. According to the (Draft) Integration Notice, Panasonic and Toyota also concluded a memorandum of understanding with Mitsui & Co., Ltd. (“Mitsui”) for the creation of new value related to the town development business and are continuing discussions regarding the development of the joint venture, including the possibility of equity participation from Mitsui. According to the (Draft) Integration Notice, the joint venture is expected to be out of the scope of consolidation for Panasonic and Toyota. The (Draft) Integration Notice states that, through the integration of the housing businesses of Panasonic Homes, Toyota Housing and Misawa Homes, Panasonic and Toyota will ensure a top-class position in the domestic housing industry with a supply of approximately 17,000 detached houses. Both companies will state they will endeavor to reinforce the management structure and further improve profitability through expanding the scale of the business. However, there is no particular reference to Misawa Homes’ aforementioned expected synergies or initiatives in order to achieve such synergies.

According to Misawa Homes, the key points of the Share Exchange are as set forth in “2. Outline of the Share Exchange” in the (Draft) Share Exchange Notice, and the basis for valuation of the share exchange ratio of the Share Exchange is as set forth in “3. Basis, etc. for Valuation of the Share Exchange Ratio” of the (Draft) Share Exchange Notice.

Specifically, the planned effective date of the Share Exchange is January 7, 2020; and, within the Share Exchange, Toyota Housing plans to allot and deliver 0.155 Toyota Shares for each Misawa Share to Misawa Homes’ shareholders (excluding Toyota Housing) at the time immediately before Toyota Housing acquires all Misawa Shares (the “Record Time”) (excluding Misawa Shares held by Toyota Housing) through the Share Exchange. According to Misawa Homes, if calculated based on its shareholder register as

App. C-3

of March 31, 2019, the Share Exchange would be expected to result in approximately 89.3% of shareholders becoming shareholders holding shares constituting less than one unit. When determining the allotment in the Share Exchange, Misawa Homes appointed SMBC Nikko Securities, Inc. (“SMBC Nikko”) as its third-party valuation institution. According to SMBC Nikko, the range for the number of shares of Toyota’s common stock allotted for one share of common stock of Misawa Homes using each valuation methodology is as follows.

Additionally, as we understand from the materials for the Third Party Committee dated April 17, 2019 prepared by SMBC Nikko, Toyota shares have high liquidity, and for the past one year, the average total trading value calculated by multiplying the average daily volume by the average share price is on average roughly 30 billion yen to 40 billion yen per day.

The relationship between the parties to the Share Exchange are as follows. Firstly, Toyota Housing is the controlling shareholder of Misawa Homes and holds 21,965,898 Misawa Shares (comprising 51.00% of the 43,070,163 total issued shares as of March 31, 2019), and Toyota Housing has dispatched five Directors and one Audit and Supervisory Board Member to Misawa Homes. There is also one employee seconded from Toyota Housing to Misawa Homes. Toyota Housing also sources components etc. from Misawa Homes and carries out transactions for the use of systems, etc. Misawa Homes has long-term loans from Toyota Housing. As of March 31, 2019, Toyota holds 342,799 Toyota Housing Shares (89.25% of the 384,089 total issued shares as of March 31, 2019), and Toyota’s group companies, etc. (“Group Companies, etc.”) hold 41,290 Toyota Housing Shares (10.75% of the 384,089 total issued shares as of March 31, 2019). However, Toyota plans to make Toyota Housing a wholly owned subsidiary by Toyota Housing acquiring treasury shares, etc. from Group Companies, etc. by the effective date of the Share Exchange.

As Toyota Housing dispatches officers and seconds employees to Misawa Homes as stated above, Misawa Homes has implemented the following measures to avoid conflicts of interest:

Among the Directors of Misawa Homes, as Mr. Masashi Isogai and Mr. Hideyuki Yoshimatsu both formerly worked for Toyota and Toyota Housing, as Mr. Tadashi Yamashina concurrently serves as the President of Toyota Housing, as Mr. Yuji Goto and Mr. Naoki Teramoto both concurrently serve as Directors of Toyota Housing, and as Mr. Sumio Yokota concurrently serves as Associate Director for Toyota Housing, from the perspective of avoiding conflicts of interest, they did not participate in Misawa Homes Board of Directors’ deliberation of, and resolution concerning, the Share Exchange and did not participate in discussions and negotiations of the Share Exchange with Toyota and Toyota Housing on behalf of Misawa Homes. Among Misawa Homes’ Audit and Supervisory Board Members, as Mr. Hirohiko Fukatsu concurrently serves as an Audit and Supervisory Board Member of Toyota Housing, he did not participate in Misawa Homes’ Board of Directors deliberation of the Share Exchange and refrained from stating any opinion regarding the resolution on the Share Exchange at that same meeting of the Board of Directors.

None of the above officers, other than Mr. Masashi Isogai, participated in preparation of the business plan used when calculating the share exchange ratio for the Share Exchange or when conducting the deliberation and resolution for such business plan. Furthermore, although Mr. Masashi Isogai was involved in preparation of the business plan, he did not participate in the deliberation or resolution therefor.

In addition to the foregoing, the employee seconded to Misawa Homes from Toyota Housing did not participate in preparation of the business plan, discussion or negotiation of the Share Exchange.

App. C-4

Toyota Housing conducted a tender offer for Misawa Homes shares (the “Tender Offer”) from November 28 to December 26, 2016 at a tender offer price of 1,100 yen per share, with 5,460,800 shares of stock (14.10% of the total issued shares as of October 31, 2016 (38,738,914 shares of stock)) as the maximum planned purchase volume and received subscription for shares exceeding the maximum they set. Additionally, on January 5, 2017, Toyota Housing came to hold 51% of the voting rights in Misawa Homes by means of a capital increase through third-party allotment wherein it was allotted 5,720,900 shares of common stock (total paid in amount: 5,000,066,600 yen; paid in amount per share: 874 yen).

The tender offer price in the Tender Offer was a price that respectively added the following premiums: 25.86% (rounded to the second decimal place) compared to the closing price of 874 yen for Misawa Homes’ shares on the First Section of the TSE; 34.15% (rounded to the second decimal place) compared to the simple average closing price of 820 yen for Misawa Homes’ shares on the First Section of the TSE for the one month until November 21, 2016; 40.13% (rounded to the second decimal place) compared to the simple average closing price of 785 yen for Misawa Homes’ shares on the First Section of the TSE for the three months until November 21, 2016; and 44.74% (rounded to the second decimal place) compared to the simple average closing price of 760 yen for Misawa Homes’ shares on the First Section of the TSE for the six months until November 21, 2016.

III. The Third Party Committee’s Opinion Regarding the Terms of Reference

Because Toyota and Toyota Housing are Misawa Homes’ parent companies and constitute controlling shareholders, the Share Exchange constitutes a transaction, etc. with a controlling shareholder, giving rise to a structural conflict of interest relationship between Toyota and Toyota Housing on the one side and Misawa Homes’ minority shareholders on the other.

Therefore, the Third Party Committee examined such structural conflict of interest relationship to consider whether Toyota and Toyota Housing were being benefitted by sacrificing Misawa Homes’ minority shareholders—in other words, the Third Party Committee considered the terms of reference from the perspective of whether profit was being transferred from Misawa Homes’ minority shareholders to Toyota and Toyota Housing unfairly.

The purpose of the Share Exchange is as stated in Section II.1 of this Opinion.

The Share Exchange will be implemented as part of the Integration. Under circumstances where the domestic detached housing market will contract irreversibly in the medium- to long-term as well, Misawa Homes recognizes the necessity of constructing new business models and creating synergies such as through thorough streamlining as further initiatives to ensure its survival and to target sustained growth and evolution. Under such circumstances, the integration from a capital and a business perspective not only delivers further benefits to all related parties as a traditional detached housing business operator, but also enables a fusion of management resources, such as the wealth of technology, expertise, and development resources possessed by each company—mainly from the perspectives of mobility services for the Toyota group, “lifestyle updates” and “lifestyle technology” such as IoT household appliances and equipment for the Panasonic group, and a town development business operator such as compact city-style real estate development for Misawa Homes—which Misawa Homes believes will enable its evolution and growth as a town development business operator through the provision of appealing services with even greater added value. This has the aim of growing Misawa Homes’ enterprise value over the long term and also contributing to the improvement of the overall enterprise value of the Toyota group and the Panasonic group.

App. C-5

In this way, the purpose of the Share Exchange is to facilitate the survival and sustained growth and evolution of Misawa Homes and to grow Misawa Homes’ enterprise value in the long term, as well as to improve the overall enterprise value of the Toyota group and the Panasonic group. Additionally, there are no circumstances, etc. giving rise to suspicions that the purpose is to unfairly benefit Toyota and Toyota Housing by sacrificing Misawa Homes’ minority shareholders.

Therefore, the Third Party Committee finds the purpose of the share exchange to be legitimate and reasonable.

Furthermore, as the Share Exchange will be carried out as part of the Integration as a method for realizing the Integration, the synergies Misawa Homes expects from the Integration and the measures in order to achieve such synergies are important factors when considering the pros and cons of the Integration. However, the (Draft) Integration Notice does not specifically refer to the synergies for Misawa Homes in the Integration or the measures necessary to achieve such synergies, and the Third Party Committee has been informed that the details will be left to future discussions between the Toyota group and the Panasonic group. The Third Party Committee believes that it is important for Misawa Homes to continue to hold discussions with the Toyota group and the Panasonic group aimed at achieving the synergies expected from the Integration.

When examining the fairness of procedures of the Share Exchange, the Third Party Committee needs to conduct its examination from the perspectives of (i) whether the reasons for adopting the scheme used in the Share Exchange are reasonable, (ii) the legality of the Share Exchange’s procedures, (iii) whether measures to avoid structural conflicts of interest (“Measures to Avoid Conflicts of Interest”) in the Share Exchange are reasonable, (iv) the independence of the Third Party Committee and whether a framework to respect the opinion of the Third Party Committee was ensured, (v) the circumstances of negotiations for the share exchange ratio of the Share Exchange, and (vi) the circumstances of disclosure of information.

A tender offer can be contemplated instead of the Share Exchange as the method for Toyota or Toyota Housing to make Misawa Homes a wholly owned subsidiary. Unlike the case of a tender offer, in the Share Exchange, Misawa Homes’ minority shareholders acquire shares of Toyota rather than cash.

The Third Party Committee confirmed with Toyota and Toyota Housing the reason for not conducting a tender offer in the transaction at hand. Toyota and Toyota Housing answered that (i) this was the proposal they formulated after considering Toyota’s financial strategy, etc. and (ii) Toyota has a history of making Daihatsu Motor Co., Ltd., Kanto Auto Works, Ltd., and Toyota Auto Body Co., Ltd. wholly owned subsidiaries through share exchanges, and Toyota wanted Misawa Homes’ minority shareholders to continue to hold shares of Toyota as Toyota shareholders. Of these answers, (i) is a strictly internal matter for Toyota. With respect to (ii), Misawa Homes is a company primarily engaged in housing business, not the automobile business like each of the companies made wholly owned subsidiaries of Toyota through past share exchanges. Therefore, the Third Party Committee had to consider carefully whether it was appropriate to allot shares of Toyota, which is engaged in automobile business, to Misawa Homes’ minority shareholders, who hold shares in Misawa Homes, which is engaged in the housing business. Additionally, as the Joint Venture Company is expected to be outside the scope of consolidation for Toyota and a significant difference can be observed between the total market value of Toyota and Misawa Homes, the synergies from the Integration will be highly diluted in Toyota Shares, and therefore it is difficult to receive the benefits of such synergies through Toyota Shares.

On the other hand, Toyota Shares have high liquidity, and the daily average total trading value is roughly 30 billion yen to 40 billion yen, an amount that rivals the total market value of Misawa Homes. Additionally, approximately 90% of shareholders are expected to become shareholders of shares

App. C-6

constituting less than one unit through the Share Exchange, but those shareholders are able to request that Toyota purchase from them the shares constituting less than one unit at the market price. Based on such situation for Toyota shares, if a minority shareholder of Misawa Homes does not wish to continue to hold Toyota shares, such shareholder may easily convert them to cash by selling them on the market or by availing themselves of Toyota’s share purchase system for shares constituting less than one unit.

Based on the foregoing, the Third Party Committee regards Toyota Shares to be equivalent to cash and has determined that, if the share exchange ratio is not inferior to making Misawa Homes a wholly owned subsidiary using cash as consideration, it is also reasonable to conduct a share exchange rather than conduct a tender offer.

Toyota and Toyota Housing appointed Nagashima Ohno & Tsunematsu and Misawa Homes appointed Hibiya Park Law Offices as their respective legal advisors for the Share Exchange, and received legal advice concerning the procedures of the Share Exchange and the decision-making method and process, etc. Nagashima Ohno & Tsunematsu and Hibiya Park Law Offices are independent of, and have no material relationship with, Toyota, Toyota Housing, or Misawa Homes.

Both of these legal advisors are firms with a wealth of experience in these types of matters, and the materials, etc. disclosed to the Third Party Committee did not appear to indicate any matters giving rise to doubts as to the legality of the procedures of the Share Exchange. Therefore, the Third Party Committee believes that the legality of the procedures of the Share Exchange is ensured.

As stated in Section “3. Basis, etc. for Valuation of the Share Exchange Ratio,” “(4) Measures to Ensure Fairness” and “(5) Measures to Avoid Conflicts of Interest” of the (Draft) Share Exchange Notice, as well as Section II. 3. of this Opinion, Misawa Homes took Measures to Avoid Conflicts of Interest, such as: (i) obtaining a financial analysis report from an independent, third-party valuation institution; (ii) obtaining advice from an independent law firm; and (iii) obtaining the unanimous approval of Directors and Audit and Supervisory Board Members, other than Directors and Audit and Supervisory Board Members with a Material Relationship. Misawa Homes also established the Third Party Committee and requested an examination regarding the Terms of Reference. Additionally, Misawa Homes also took measures to exclude persons with a material relationship where possible when preparing and approving the business plan used to calculate the share exchange ratio in the Share Exchange.

These Measures to Avoid Conflicts of Interest are all equivalent to measures used in similar types of matters, and the Third Party Committee finds that the Measures to Avoid Conflicts of Interest used when examining the Share Exchange are reasonable.

(4)     Independence of the Third Party Committee and Ensuring a Framework to Respect the Opinion of the Third Party Committee

The Third Party Committee was established on April 3, 2019 and convened five times before this Opinion was prepared. In this process, the Third Party Committee asked necessary questions and made requests for necessary materials to Misawa Homes and Misawa Homes’ advisors, but the examination and preparation of this Opinion was carried out independently from the parties to the Share Exchange and the Integration. Misawa Homes’ Board of Directors passed a resolution to the effect that it would respect in full the written opinion from the Third Party Committee. Therefore, the Third Party Committee finds that a framework to respect the opinion of the Third Party Committee is ensured.

App. C-7

When negotiating the Share Exchange, Misawa Homes obtained a financial analysis report from SMBC Nikko, an independent, third-party valuation institution. According to the (Draft) Share Exchange Notice, the share exchange ratio for the Share Exchange is within the scope of the valuation range in such financial analysis report.

SMBC Nikko disclosed the financial analysis report and provided detailed explanations to the Third Party Committee regarding the valuation methodologies used by SMBC Nikko and the valuation results. SMBC Nikko is a valuation institution with a wealth of experience in these types of matters, and the Third Party Committee could find no matters in the financial analysis report that would give rise to doubts as to the appropriateness of its content. Please see Exhibit 3 regarding the Third Party Committee’s detailed examination of the reasonableness of the valuation methodologies.

As we understand from SMBC Nikko, by comparing certain case studies over approximately the last five years of share exchanges and take-private transactions involving tender offers, in each case between parent companies and subsidiaries, it can be viewed that the trend was generally for the premium to be higher for take-private transactions involving (cash) tender offers. Additionally, one reason for this trend could be that, in the case of a share exchange, the existing shareholders of a subsidiary may benefit from certain synergies by holding shares of the parent company.

However, the (Draft) Integration Notice makes no particular mention of the synergies expected by Misawa Homes or the measures necessary to achieve such synergies. Additionally, governance and management policies after the Integration are currently still under discussion, and the details have not been finalized. Therefore, it is difficult to gain an understanding of what synergies will be present after the Integration when examining the Share Exchange.

Based on such circumstances and the circumstances discussed above, the Third Party Committee believes that a justifiable share exchange ratio (premium) is necessary even in the event of making Misawa Homes a wholly owned subsidiary using cash as consideration. Based on such opinion of the Third Party Committee, Misawa Homes has conducted negotiations with Toyota and Toyota Housing in order to obtain a share exchange ratio (premium) that is not inferior to the case where the company is made a wholly owned subsidiary using cash as consideration. Toyota and Toyota Housing initially proposed a share exchange ratio of 0.14 shares of Toyota stock for each share of Misawa Homes stock for the Share Exchange. In response to this, Misawa Homes requested Toyota and Toyota Housing to increase the ratio through multiple negotiations, ultimately resulting in agreement to a share exchange ratio of 0.155 shares of Toyota stock for each share of Misawa Homes stock.

We understand that this share exchange ratio is not necessarily an inferior share exchange ratio, even when compared to the take-private transactions over approximately the last five years between parent companies and subsidiaries where cash was used as consideration, which SMBC Nikko referred to us.

In light of these circumstances, the Third Party Committee finds that the share exchange ratio of the Share Exchange is appropriate.

Misawa Homes plans to release an outline of the Share Exchange in the (Draft) Share Exchange Notice. The content thereof is in line with the TSE’s timely disclosure criteria, and as explained above, each party plans to appoint a legal advisor respectively and to make appropriate disclosures. The Third Party Committee checked the content of the (Draft) Share Exchange Notice, and in light of the content discussed by the Third Party Committee, no matters were found that would give rise to doubts as to the appropriateness of such content. In light of such circumstances, the Third Party Committee finds that Misawa Homes will make appropriate disclosure to its shareholders, including the content of the (Draft) Share Exchange Notice.

App. C-8

The approval of Misawa Homes’ general meeting of shareholders must be sought in order for the Share Exchange to take effect, but because Misawa Homes must make appropriate disclosure of information to its shareholders when convening such general meeting of shareholders, it is necessary to continue taking care with disclosure of information to shareholders.

As discussed above, as the Third Party Committee finds that (i) the scheme adopted by the Share Exchange was reasonable, (ii) the procedures of the Share Exchange were lawful, (iii) the Measures to Avoid Conflicts of Interest in the Share Exchange were reasonable, (iv) the Third Party Committee is independent and a framework to respect the opinion of the Third Party Committee has been ensured, (v) the negotiations of the share exchange ratio for the Share Exchange were appropriate, and (vi) there is appropriate disclosure of information, the Third Party Committee finds that the fairness of procedures for the Share Exchange has been ensured.

As negotiations of the transaction terms and conditions of the Share Exchange were conducted with the controlling shareholders, there is a structural conflict of interest relationship.

When examining the legitimacy and appropriateness of transaction terms and conditions relating to reorganization, the Third Party Committee referred to the Supreme Court’s Tecmo decision (February 29, 2012, Supreme Court Civil Case Reports ( Saikosaibansho Minji Hanrei Shu ) Vol. 66 No. 3, p. 1784). In this decision, the Supreme Court held that in cases where no structural conflict of interest relationship exists, “Between companies where there is no special mutual capital relationship, in the case where the transfer of shares takes effect through procedures generally recognized to be fair, such as being duly approved at a general meeting of shareholders after appropriate disclosure of information that is the basis for the judgment of shareholders, it is reasonable to view the share exchange ratio in such share transfer as fair, as long as there are no special circumstances sufficient to find that the reasonable judgment of shareholders at such general meeting of shareholders has been impaired.” and the court indicated judgment reasoning to the effect that the transaction terms and conditions determined by the parties should be respected in cases where procedures generally recognized to be fair are carried out.

Additionally, although it is a precedent from a lower court decision (Tokyo District Court decision of March 30, 2011 The Financial and Commercial Law Precedents No. 1370, p. 19), the court ruled that, even in cases where there is a special mutual capital relationship between the parties, in principle the terms and conditions determined by the parties should be respected where procedures that are fair and highly transparent have been taken.

When examining the legitimacy and appropriateness of transaction terms and conditions in transactions with structural conflicts of interest (with respect to a two-stage transaction matter with a structural conflict of interest), the Supreme Court’s JCOM decision (Supreme Court decision of July 1, 2016 Supreme Court Civil Case Reports ( Saikosaibansho Minji Hanrei Shu ) Vol. 70 No. 6, p. 1445) which gave the Supreme Court’s opinion on the approach relating to a fair price is also of value as a reference.

Specifically, this decision of the Supreme Court held the following: “In the case where—measures were taken to prevent the decision-making process from being arbitrary due to the existence of a conflict of interest relationship between the majority shareholders, etc. and minority shareholders, such as obtaining the opinion of an independent third party committee or experts, the aforementioned tender offer was conducted using procedures generally recognized to be fair, such as clearly indicating to the effect that the aforementioned shares held by shareholders who did not subscribe to the tender offer would also be acquired at the same purchase price as in the tender offer, and subsequently such company acquired all shares subject to class-wide call at the same price as the aforementioned purchase price—the court finds

App. C-9

that it is reasonable for the acquisition price of the aforementioned shares to be the same as the purchase price in the aforementioned tender offer, as long as there are no special circumstances sufficient to find that there has been an unforeseeable change in the circumstances on which the transaction is based.” The Supreme Court reversed the decision of the court in the first instance that recognized some of the assertions of the opposing shareholders and replaced the decision with its own decision.

These decisions of the Supreme Court and the lower court precedent held that it is reasonable to regard the share exchange ratio agreed between the parties to be fair as long as there are no special circumstances in the case where reorganization, such as a share exchange, was implemented using procedures generally recognized to be fair. Although the courts deliberated on procedures including the negotiating process for transaction terms and conditions for purchase prices or share exchange ratios, the courts held that the details determined by the parties should be respected when such transaction terms and conditions have been determined through procedures generally recognized to be fair, so it can be said that the courts showed a non-interventionist position with respect to getting involved with the transaction terms and conditions themselves. ² This approach conforms ³ to the traditional majority theory approach and is a reasonable approach.

The Third Party Committee also confirmed whether the Share Exchange is being implemented with procedures generally recognized to be fair, in accordance with these decisions. As the transaction terms and conditions of the Share Exchange were negotiated with majority shareholders, there is a structural conflict of interest relationship. However, as explained above, Misawa Homes took Measures to Avoid Conflicts of Interest, such as: (i) obtaining a financial analysis report from an independent, third-party valuation institution; (ii) obtaining advice from an independent law firm; and (iii) obtaining the unanimous approval of Directors and Audit and Supervisory Board Members, other than Directors and Audit and Supervisory Board Members with a Material Relationship. Thus, as stated in Section III. 3. of this Opinion, the Third Party Committee finds that procedures for the Share Exchange are fair.

However, in light of the current circumstances, even if appropriate transaction terms and conditions are set forth, the parties must bear in mind that it may be necessary to change the transaction terms and conditions after the fact if special circumstances arise in the future sufficient to recognize that there has been an unforeseeable change in circumstances that are the basis of the transaction. In light of the fact that there are approximately six months between the announcement of the Share Exchange and Misawa Homes’ extraordinary general meeting of shareholders, Misawa Homes’ Board of Directors needs to check whether such special circumstances exist when it convenes the extraordinary general meeting of shareholders.

When examining the legitimacy and appropriateness of the transaction terms and conditions of the Share Exchange, the relationship between the Share Exchange and the Tender Offer implemented from November to December 2016 shall be scrutinized. The tender offer price in the Tender Offer was 1,100 yen. This tender offer price was respectively at a premium of: 25.86% (rounded to the second decimal place) compared to the closing price of 874 yen of Misawa Homes shares on the First Section of the TSE; 34.15% (rounded to the second decimal place) compared to the simple average closing price of 820 yen for Misawa Homes shares for the month until November 21, 2016; 40.13% (rounded to the second decimal place) compared to the simple average closing price of 785 yen for Misawa Homes shares for the three months until November 21, 2016; and 44.74% (rounded to the second decimal place) compared to the simple average closing price of 760 yen for Misawa Homes shares for the six months until November 21, 2016. On this point, the Tender Offer was carried out in conjunction with a third-party allotment capital increase to Toyota Housing (paid in amount: 874 yen per share), and it was explained that the premium in the tender offer price was an advance distribution of the synergies obtained due to conversion to a consolidated subsidiary.

App. C-10

The Share Exchange is a transaction using shares as the consideration, and more than two years have passed since the Tender Offer. Further, the environment in which Misawa Homes operates, such as the market conditions, have also changed, so a simple comparison cannot be made. However, the Third Party Committee believed that it was necessary in protecting minority shareholders to make a comparison against the tender offer price of the Tender Offer and to determine whether it was a significantly unreasonable price or level of premium.

Because the share prices of Toyota shares and Misawa Homes shares both fluctuate from day-to-day, the Third Party Committee confirmed the closing price on May 8, 2019, as well as the simple average closing prices for the one month, three months and six months to May 8, 2019, respectively. The closing price on May 8, 2019, the simple average closing prices for each period and the premium, etc. are as follows:

As stated above, the amount obtained by multiplying Toyota shares’ closing price on May 8, 2019, and the respective simple average closing prices for the one month, three month and six months to May 8, 2019 by the share exchange ratio (0.155) is 1,047 yen, 1,064 yen, 1,042 yen, and 1,040 yen, respectively. There is no significant divergence from the tender offer price of 1,100 yen in the Tender Offer. The premium varies depending on the period, and the premium for the Share Exchange is greater than the level of the premium for the Tender Offer for some periods and less for other periods. However, the Third Party Committee does not regard it as being a significantly unreasonable level compared to the premium at the time of the Tender Offer. As discussed above, one cannot make a simple comparison of the share exchange ratio for the Share Exchange against the Tender Offer conducted more than two years ago but in light of such circumstances, the share exchange ratio for the Share Exchange cannot be said to be a significantly unreasonable price or premium level compared to the tender offer price of the Tender Offer.

When the Third Party Committee checked the transaction terms and conditions of the Share Exchange, the Third Party Committee did not find any facts to the effect that Toyota and Toyota Housing were unfairly benefitting by sacrificing Misawa Homes’ minority shareholders, and the Third Party Committee did not discover circumstances that prejudiced the legitimacy and appropriateness of such terms and conditions.

As discussed above, the Third Party Committee found that the procedures for the Share Exchange to be fair, that the prices and the level of premium are not significantly unreasonable compared to the tender offer price of the Tender Offer, and that transaction terms and conditions other than the share exchange ratio are also appropriate. In addition to the foregoing, the Third Party Committee did not find any facts to the effect that Toyota and Toyota Housing were benefitting by sacrificing Misawa Homes’ minority shareholders and did not discover circumstances that prejudiced the legitimacy and appropriateness of such terms and conditions.

Therefore, the Third Party Committee finds that the transaction terms and conditions of the Share Exchange did not unfairly prejudice the interests of minority shareholders and are therefore legitimate and appropriate.

App. C-11

5.              Whether Conducting the Share Exchange Would be Disadvantageous for Minority Shareholders of Misawa Homes

As discussed above, the Third Party Committee found the purpose of the Share Exchange to be legitimate and reasonable, the fairness of procedures for the Share Exchange was ensured, and the legitimacy and appropriateness of the transaction terms and conditions of the Share Exchange were ensured. Therefore, the Third-Party Committee concludes that the Share Exchange is not disadvantageous to Misawa Homes’ minority shareholders.

Further, as stated above, the approval of Misawa Homes’ general meeting of shareholders must be sought in order for the Share Exchange to take effect. Since because appropriate disclosure of information to Misawa Homes’ shareholders must be carried out when holding such general meeting of shareholders, it is necessary to continue taking care with disclosure of information to shareholders.

Additionally, note that it may be necessary to change the transaction terms and conditions after the fact if, going forward, there are special circumstances sufficient recognize that an unforeseeable change has arisen in the circumstances on which the transaction is based. In light of the fact that there are approximately six months between the announcement of the Share Exchange and Misawa Homes’ extraordinary general meeting of shareholders, Misawa Homes’ Board of Directors needs to check whether such special circumstances exist when it convenes the extraordinary general meeting of shareholders

IV. Restriction

Because the Third Party Committee was subject to the following restrictions when preparing this Opinion, Misawa Homes should refer to this Opinion pursuant to an understanding of restrictions such as the following:

(1)   The Third Party Committee conducted its examination on the presumption that (i) the materials and information, etc. (the “Materials, etc.”) disclosed by Misawa Homes and Misawa Homes’ advisors in writing and at interviews, etc. are true and correct, would not give rise to any misunderstanding, and that there has been no change to the details of the Materials, etc. as of the date that this Opinion was prepared and (ii) there are no other materials facts, information or documents that would have an influence on the opinion of the Third Party Committee, other than this information;

(2)   Examination by the Third Party Committee was conducted using the results of interviews and examination materials within a limited scope and time. Therefore, it is possible that there are issues that were not apparent at the time that this Opinion was prepared that would have become apparent if interviews and examination of materials had been conducted with a broader scope, or if more time had been spent on interviews and examination of materials;

(3)   This Opinion was prepared on the assumption that it would exclusively be used internally by Misawa Homes, and it was not prepared in contemplation of being disclosed to any third party, other than the TSE; and

(4)   This Opinion does not guarantee approval or treatment by a court of law, nor interpretation or handling by an administrative agency or self-regulatory organization.

END

App. C-12

Exhibit 1

Draft “Notice Regarding Misawa Homes Co., Ltd. Becoming a Wholly Owned Subsidiary of Toyota Motor Corporation’s Subsidiary Toyota Housing Corporation through a Share Exchange”

(As attached)

App. C. Ex1-1

May 9, 2019

To Whom It May Concern:

Company Name: Toyota Motor Corporation

Name and Title of Representative:

Akio Toyoda, President

(Code Number: 7203

First Section of Tokyo Stock Exchange and Nagoya

Stock Exchange)

Name and Title of Contact Person:

Kenta Kon, General Manager, Accounting Division

(Telephone Number: 0565-28-2121)

Company Name: Toyota Housing Corporation

Name and Title of Representative:

Tadashi Yamashina, President

Name and Title of Contact Person:

Katsuaki Tagumi, General Manager, Corporate

Planning Division

(Telephone Number: 052-952-4854)

Company Name: Misawa Homes Co., Ltd.

Name and Title of Representative:

Masashi Isogai, President and CEO

(Code Number: 1722

First Section of Tokyo Stock Exchange and Nagoya

Stock Exchange)

Name and Title of Contact Person:

Nobutoshi Karigome, General Manager, Corporate

Planning Department

(Telephone Number: 03-3349-8088)

App. C. Ex1-2

Notice Regarding Misawa Homes Co., Ltd. Becoming a Wholly Owned Subsidiary of Toyota Motor Corporation’s Subsidiary Toyota Housing Corporation through a Share Exchange

We hereby announce that, on May 9, 2019, Toyota Motor Corporation (“Toyota”), its consolidated subsidiary, Toyota Housing Corporation (“Toyota Housing”), and Toyota Housing’s consolidated subsidiary, Misawa Homes Co., Ltd. (“Misawa Homes”), passed resolutions of their respective boards of directors to conduct a share exchange (the “Share Exchange”) in which Toyota Housing becomes the wholly owning parent company resulting from the share exchange and Misawa Homes becomes the wholly owned subsidiary resulting from the share exchange, and Toyota Housing and Misawa Homes entered into a share exchange agreement (the “Share Exchange Agreement”).

The Share Exchange is scheduled to be conducted after being approved by extraordinary general meetings of shareholders, planned to be held around November 2019, of each of Toyota Housing and Misawa Homes. The Share Exchange will be a so-called “triangular share exchange,” and Misawa Homes’ shareholders will be allotted, as consideration in the Share Exchange, common stock of Toyota (“Toyota Shares”), Toyota Housing’s parent company, rather than common stock of Toyota Housing (“Toyota Housing Shares”).

Prior to the effective date of the Share Exchange (planned date: January 7, 2020), Misawa Homes’ common stock (“Misawa Shares”) are scheduled to be delisted from the First Section of the Tokyo Stock Exchange, Inc. (“TSE”) and the First Section of the Nagoya Stock Exchange, Inc. (“NSE”) as of December 30, 2019 (planned last day of trading: December 27, 2019). In the event the current effective date of the Share Exchange is changed, the delisting date will be changed as well.

Please note that, prior to Misawa Homes’ general meeting of shareholders to approve the Share Exchange, Toyota may, in connection with the Share Exchange, submit a registration statement to the U.S. Securities and Exchange Commission under cover of Form F-4, pursuant to the Securities Exchange Act of 1933.

In recent years, it has become imperative for housing manufacturers to respond to changes in the requirements of the Japanese government and needs of society, such as the tough operating environment faced by the housing industry due to factors such as long-term population decline and the associated shrinking of the domestic housing market and the shift from the previous preference for newly constructed housing to a preference for existing housing stock that aims to utilize effectively existing housing through means such as using vacant houses and renovation, as well as the strengthening of environmental regulations.

Additionally, with the concepts of “home” or “town” being subject to drastic change due to factors such as changes in customer’s values and further advancements in mobility, such as in automated driving, and development of communication technology and other fields, the key element required to make a certain town competitive in the town development business may shift from the “location” of that town to “the degree of satisfaction with the service infrastructure for daily life” in that town.

Due to these major changes in the business environment of the housing business that Toyota Housing and Misawa Homes are facing, the Toyota group came to the conclusion that it was necessary to strengthen collaboration, including a radical strengthening of capital ties between housing manufacturers, and around the middle of December 2018 began examining specific measures, including strengthening capital ties, together with Panasonic Corporation (“Panasonic”). As a result of multiple meetings with Panasonic, the necessity was recognized of establishing a new joint venture company relating to the town development business, integrating the housing businesses by placing under the joint venture company Panasonic Homes Co., Ltd. (“Panasonic Homes”), Matsumura-Gumi Corporation and Panasonic Construction Engineering Co., Ltd. (excluding certain businesses (construction work subcontracting from construction equipment distributors, etc.)), each consolidated subsidiaries of Panasonic (“Panasonic Group Subject Businesses”), as well as Toyota Housing and Misawa Homes (“Toyota Group Subject Businesses”) ⁽ * ¹⁾ (the “Integration”), and Misawa Homes becoming a wholly

App. C. Ex1-3

owned subsidiary of Toyota Housing as part of the Integration, in order to realize the provision of services leveraging the respective strengths and characteristics of the Panasonic Group Subject Businesses and Toyota Group Subject Businesses. In the housing business, in which market competition is anticipated to intensify in the future, both groups will reinforce the foundation of their housing business through collaboration and aim to achieve growth in the town development business, which is expected to continue to grow in the future, by making use of the strengths of both groups in the town development business.

As described above, making Misawa Homes a wholly owned subsidiary through the Share Exchange will be implemented as part of the Integration.

Achieving Advanced Town Development and Housing Development Using Toyota group’s Mobility Technology and Panasonic’s Lifestyle Technology

The Toyota group has been proceeding with the construction of a “mobility service platform” (MSPF) ⁽ * ²⁾ while enhancing the development of “connected cars,” to realize an unrestricted, safe and comfortable mobility society for everyone, and promoting various big data initiatives to benefit both customers and society. In addition, Toyota group has also been collaborating with various domestic and overseas companies to create new mobility services.

Meanwhile, in the town development business, Panasonic group, together with various companies, has been engaged in the development of sustainable smart towns (SST) ⁽ * ³⁾ as advanced models of town development, which were successful and drew considerable attention both inside and outside Japan as examples of cutting-edge town development.

As discussed above, it is imperative that Toyota Group Subject Businesses and Panasonic Group Subject Businesses reinforce the foundation of their housing business through collaboration, in which market competition is anticipated to intensify going forward, and we believe that fusion of the Panasonic group’s knowledge and digital technology for a sound life and the Toyota group’s mobility knowledge is essential for our initiatives to realize even more appealing town development.

Specifically, both groups are committed to realizing improvements in peoples’ lives through further growth and advancements in the town development business, which is expected to change rapidly due to the accelerating pace of advancement in IoT ^(*4) for home appliances, household equipment, etc., as well as the development of CASE ^(*5) and “MaaS ^(*6) ,” which is a new concept of providing services by connecting means of transportation, such as vehicles or public transportation, through IT, in the mobility field, and other similar services.

App. C. Ex1-4

Current State of Toyota Housing and Misawa Homes, and Promotion of Joint Business Through Capital and Business Alliances and Conversion to Consolidated Subsidiary Until Now

Ever since its parent company, Toyota, entered the housing business in 1975, under the banner of “truly wanting to make Japanese homes better,” Toyota Housing has developed a lineup of detached housing products using a variety of different building techniques, and expanded its business to include such businesses as an existing housing stock business, a condominium business, a special building business and an international business. In terms of its relationship with Toyota, Toyota Housing was established in April 2003 by separating part of Toyota’s housing business division as the starting point for enhancement of the housing business, and in October 2010, Toyota conducted a company split causing Toyota Housing to succeed to the entirety of the housing business division. As a result, as the company handling the Toyota group’s housing-related business, Toyota Housing offers housing incorporating the advanced technologies from each Toyota group company. In October 2018, Toyota Housing’s total quality management (TQM) initiatives were evaluated highly, and it was awarded the Deming Prize as a housing manufacturer for the first time. Toyota Housing values a lifelong relationship with its customers, and under the brand vision “Sincerely for You, Together for Life,” Toyota Housing strives to deliver peace of mind during construction, after construction, and through support, in order to help customers realize their ideal lifestyles throughout their lifetime. Peace of mind during construction means high quality through advanced technology, peace of mind after construction means the ability to guarantee the home in the long term, and peace of mind through support means the corporate strength of the Toyota group. In order to continue realizing an ideal lifestyle, Toyota Housing will promote initiatives diversifying its business in response to its customers’ needs.

Since its establishment in 1967, under its philosophy of “lifelong commitment to customers through housing” Misawa Homes has endeavored to develop its business with a focus on detached housing products emphasizing the customer’s perspective. Among other achievements, Misawa Homes is the only company in the housing industry to have won a Good Design Award for 29 consecutive years, has also won Kids Design Award for 12 consecutive years, and had no homes wholly or partially destroyed by earthquake tremors since its establishment. Since long ago, Misawa Homes has worked to expand its business from a focus on detached housing to a wider scope of corporate activity covering all aspects of people’s varied and changing lifestyle needs, and with a fundamental policy of promoting business diversification through such means as aggressive investment in stock asset related businesses, ^(*7) Misawa Homes has been undertaking various initiatives. As a result of this, its asset utilization business, including rental housing and condominiums sales, as well as its town development business have grown strongly and the percentage of total sales contributed by its stock asset related businesses has grown to approximately 45%. The medium-term management plan covering the three years from 2017 to 2019 announced in May 2017 promoted ongoing diversification initiatives, and was positioned as a three-year plan towards the sustained growth for the next 50 years and further improvement of corporate value of Misawa Homes (First Step for NEXT 50), in commemoration of the 50 ^th anniversary in October, 2017 of the founding of Misawa Homes. To that end, Misawa Homes aims to achieve further progress and continue to be capable of sustained growth in the future by creating a framework that can flexibly respond to changes in social needs such as the shrinking of the domestic housing market in connection with the decrease in population and number of households and the change from a focus on new homes to a focus on existing housing stock that aims to effectively utilize existing housing, expanding the existing asset utilization business and home remodeling business with a focus on rental housing while maintaining the size of its detached housing business, and making aggressive investments in its new town development business and its overseas business.

Toyota, Toyota Housing’s parent company, and Misawa Homes entered into a capital alliance agreement as of March 31, 2005. Based on it, Toyota Housing and Misawa Homes achieved a solid track record, through such means as joint business including joint materials purchasing and joint purchasing and sale of land. Thereafter, in order for both companies to strengthen their alliance and build an even closer relationship, on January 5, 2017

App. C. Ex1-5

Toyota Housing made Misawa Homes a consolidated subsidiary through a tender offer for shares and a third-party allotment, and came to hold 21,965,898 Misawa Shares (51.00% of the 43,070,163 total issued shares as of March 31, 2019 (rounded to the 2 ^nd decimal place. Same hereinafter in calculation of shareholdings)). The aforementioned Misawa Homes medium-term management plan also lists its aim to maximize synergies with the Toyota group, including Toyota Housing, as one of its management strategies, and for each of the areas of technology and product development, design and construction, procurement, production and logistics, sales and systems, Misawa Homes is undertaking initiatives to maximize the synergies of both Misawa Homes and Toyota Housing.

Making Misawa Homes a Wholly Owned Subsidiary and Further Promotion of Joint Business through the Integration

As explained above, for housing manufacturers, including Toyota Housing and Misawa Homes, it has become imperative to respond to changes in the requirements of the Japanese government and needs of society, such as the tough operating environment faced by the housing industry due to factors such as the long-term population decline and the associated shrinking of the domestic housing market and the shift from the previous preference for newly constructed housing to a preference for existing housing stock, aiming to utilize existing housing through means such as policies for abandoned housing and renovation, as well as the strengthening of environmental regulations.

Additionally, with the concepts of “home” or “town” being subject to drastic change due to factors such as changes in customer’s values and further advancements in mobility, such as in automated driving, and development of communication technology and other fields, the key element required to make a certain town competitive in the town development business may shift from the “location” of that town to “the degree of satisfaction with the service infrastructure for daily life” in that town.

In response to such major changes in the business environment of the housing business that Toyota Housing and Misawa Homes are facing, Toyota came to the conclusion that it was necessary to create further synergies by sharing expertise and mutual cooperation through enhancement of collaboration, including a radical strengthening of capital ties between housing manufacturers, and as explained above, it came to recognize the necessity of implementing the Integration as a result of multiple meetings between Toyota and Panasonic. In particular, Toyota recognized the necessity of making Misawa Homes—the only listed company among the Toyota Group Subject Businesses and the Panasonic Group Subject Businesses—a wholly owned subsidiary of Toyota Housing as part of the Integration in order to make it possible to flexibly execute management strategies through rapid decision-making in response to the aforementioned changes in the government’s requirements and society’s needs, and to achieve efficient growth of the housing business through the Integration from a long-term, rather than short-term, perspective. Consequently, around the middle of March 2019, Toyota and Toyota Housing proposed the Share Exchange to Misawa Homes.

From Misawa Homes’ perspective as well, it has been carrying out initiatives such as further reinforcement of its stock asset related businesses, and proactive promotion of business diversification including the town development business and overseas business expansion, as set out in the aforementioned medium-term management plan, “First Step for NEXT 50,” in order to build a business portfolio that stops its reliance on the housing business, but under circumstances where the domestic detached housing market will contract irreversibly in the medium- to long-term as well, Misawa Homes recognizes the necessity of constructing new business models and creating synergies such as through thorough streamlining as further initiatives to ensure its survival and target sustained growth and evolution.

Since Toyota and Toyota Housing proposed the Share Exchange, Misawa Homes has shared its understanding of the industry and the positioning of Toyota Housing, Misawa Homes and Panasonic Homes in the industry, and has held frequent discussions regarding the role it should play in the future.

App. C. Ex1-6

Consequently, Misawa Homes came to the understanding that becoming a wholly owned subsidiary of Toyota Housing through the Share Exchange, as well as promoting the integration of Toyota Housing, Misawa Homes, and Panasonic Homes, etc. from a capital and a business perspective by Toyota and Panasonic together establishing a joint venture company (the “Joint Venture Company”) to carry out the integrated operation of the Toyota Group Subject Businesses and the Panasonic Group Subject Businesses and thereby strengthening their business foundations, and further, after the effective date of the Share Exchange, Misawa Homes becoming a direct, wholly owned subsidiary of the Joint Venture Company, would grow Misawa Homes’ enterprise value over the long term and also contribute to the improvement of the overall enterprise value of the Toyota group and the Panasonic group. Furthermore, not only would the Share Exchange contribute to the improvement of Misawa Homes’ enterprise value, but also providing the Toyota Shares that are the consideration in the Share Exchange would also make it possible to provide shareholders with the benefits of the Integration’s synergies. Therefore, Misawa Homes made the decision to conduct the Share Exchange and the Integration because the reorganization can also be regarded as being beneficial for shareholders. The reasons for this are that the integration from a capital and a business perspective not only delivers further benefits to all related parties as a traditional detached housing business operator, but also enables a fusion of management resources, such as the wealth of technology, expertise, and development resources possessed by each company—mainly from the perspectives of mobility services for the Toyota group, “lifestyle updates” and “lifestyle technology” such as IoT household appliances and equipment for the Panasonic group, and a town development business operator such as compact city-style real estate development for Misawa Homes—which Misawa Homes believes will enable its evolution and growth as a town development business operator through the provision of appealing services with even greater added value.

Misawa Homes believes that becoming a wholly owned subsidiary of Toyota Housing and the Integration will create the following specific synergies:

The increased size of operations due to the Integration will create a group boasting a supply of approximately 17,000 houses. With housing business conducted under the management of the Joint Venture Company, Toyota Housing, Misawa Homes and Panasonic Homes will avoid any redundancy in the areas of their respective strengths, and by mutually complementing one another in their areas it will be possible in terms of sales to enhance their competitive advantages while further increasing management efficiency on a Japan-wide scale.

By aiming for acceleration of management strategies at each company through the Integration, we believe that Panasonic Homes’ participation will further accelerate the streamlining initiatives in the housing business currently underway with Toyota Housing, such as cost reduction and streamlining of business in back-office departments through utilization of shared infrastructure as well as cost reduction through joint purchasing. Additionally, it will become possible to proactively carry out sharing of information and personnel, which, as a listed company, had to be restricted to maintain independence. We believe that this will make it possible to carry out business activities efficiently.

With the sources of value of housing changing from “location” to “the form that the town takes” and from “the building itself” to its “functions and ease of use” in association with changes in individual lifestyles and the diversification of values, we believe that the integration of management resources possessed by each company will enable the realization of town development based on the actual lifestyles of each individual resident. For example, we believe that urban design optimized for mobility services in anticipation of technological

App. C. Ex1-7

advancements such as self-driving vehicles or the provision of new services and technologies such as the provision of connected homes ^(8*) that are constantly being updated, will enable the creation of new “lifestyle” value for the entire town, giving the whole area high added value, and promoting enhanced competitiveness. In addition, we believe that becoming an unlisted company through the Share Exchange will enable Misawa Homes to carry out agile decision-making without being distracted by how it is viewed by the stock market, and aiming to accelerate the execution of management strategies will contribute to establishment of new business models, as explained above, as well as expansion.

With the town development business as the starting point, in the medium- to long-term, it will be possible to supplement vigorous town development needs centering on Asia and other countries where there is significant population growth. We believe that there is growing demand for urban infrastructure that alleviates issues caused by urbanization, such as traffic jams, in association with the rapid growth of cities in such regions. Additionally, by becoming an unlisted company through the Share Exchange, it will become possible to flexibly leverage the track record and network that each company has cultivated thus far and also use it as a foothold to enhance the overseas town development business, without needing to worry about independence as a listed company.

App. C. Ex1-8

This will be a share exchange wherein Toyota Housing will become the wholly owning parent company resulting from the share exchange and Misawa Homes will become the wholly owned subsidiary resulting from the share exchange. The Share Exchange is scheduled to be conducted with an effective date of January 7, 2020, after Toyota Housing and Misawa Homes receive approval of the Share Exchange Agreement at their respective extraordinary general meetings of shareholders scheduled to be held around November 2019.

As described above in “1. Purpose of Making Misawa Homes a Wholly Owned Subsidiary through the Share Exchange,” the Share Exchange is for the purpose of the Integration, and will be implemented as part of the procedures for the Integration. Therefore, the Share Exchange Agreement provides that the Share Exchange will be suspended if it is decided by the date 10 business days before the aforementioned planned delisting date of Misawa Shares that the Integration will not be implemented. Accordingly, if it is decided by the date 10 business days before the aforementioned planned delisting date of Misawa Shares that the Integration will not implemented, Misawa Homes will not be converted into a wholly owned subsidiary through the Share Exchange. The Share Exchange Agreement also provides that the effective date of the Share Exchange will also be changed if the planned effective date of the Integration (January 7, 2020) is changed by the date 10 business days before the aforementioned planned delisting date of Misawa Shares. Accordingly, if the scheduled implementation date of the Integration is changed by the date 10 business days before the aforementioned scheduled delisting date of Misawa Shares, the effective date of the Share Exchange will also change in conjunction with such change.

Please note that the Share Exchange is a so called “triangular share exchange” in order to achieve the purpose of the Share Exchange and to provide the shareholders of Misawa Homes, which is the wholly owned subsidiary resulting from the share exchange, with the benefit of the synergies due to the Share Exchange and the Integration, and the Share Exchange allots Toyota Shares (Toyota is the wholly owning parent company of Toyota Housing) ^(*) as consideration in the Share Exchange rather than Toyota Housing Shares.

Additionally, as explained below in “3. Basis, etc. for Valuation of the Share Exchange Ratio (4) Measures to Ensure Fairness and (5) Measures to Avoid Conflicts of Interest” and “9. Transactions with Controlling Shareholders,” when setting the consideration in the Share Exchange, there has been thorough consideration of Misawa Homes’ shareholders, such as implementing appropriate measures to ensure fairness and avoid conflicts of interest, and implementation of measures to protect minority shareholders when conducting transactions with controlling shareholders, etc.

0.155 Toyota Shares will be allotted and delivered for each Misawa Share; provided, however, that no shares will be allotted through the Share Exchange for the 21,965,898 Misawa Shares held by Toyota Housing (as of March 31, 2019). The aforementioned share exchange ratio may be changed upon consultation among Toyota, Toyota Housing and Misawa Homes if any underlying conditions regarding the basis of valuation materially changes.

Toyota Housing plans to allot and deliver 3,269,655 Toyota Shares (planned) to Misawa Homes’ shareholders (excluding Toyota Housing) at the time immediately before the time Toyota Housing acquires all Misawa Shares (the “Record Time”) (excluding Misawa Shares held by Toyota Housing).

The method by which Toyota Housing will acquire the Toyota Shares to be delivered through the Share Exchange is expected to be allotment of Toyota Shares to Toyota Housing for a fair price by means of disposal of treasury shares by a third-party allotment after adopting a resolution at a meeting of Toyota’s board of directors to be held in the future. This acquisition method will be promptly announced once it is decided.

Misawa Homes plans to cancel as of the time immediately preceding the Record Time all treasury shares held by Misawa Homes (9,716 shares as of March 31, 2019) and all treasury shares that Misawa Homes will come to hold by the time immediately before the Record Time (including shares purchased by Misawa Homes upon demand from opposing shareholders for purchase of Misawa Shares in accordance with Article 785, Paragraph 1 of the Companies Act in relation to the Share Exchange), by resolution at a meeting of Misawa Homes’ board of directors that will be held no later than the day preceding the effective date of the Share Exchange. The number of shares allotted and delivered through the Share Exchange may be revised in the future due to Misawa Homes’ cancellation of treasury shares, etc.

Please refer to “5. Summary of Issuer of Shares Constituting the Consideration in the Share Exchange” below.

It is expected that some shareholders will hold shares constituting less than one unit of Toyota stock (less than 100 shares of stock) as a result of the Share Exchange. In particular, Misawa Homes’ shareholders who hold less than 646 Misawa Shares are expected to hold shares constituting less than one unit of Toyota Shares. Such shareholders will be entitled to receive dividends of Toyota with a record date on or after the effective date of the Share Exchange in proportion to the number of shares held by them, but will not be able to sell such shares constituting less than one unit on any financial instruments exchange markets. Shareholders who will hold shares constituting less than one unit of Toyota Shares can utilize the share purchase system for shares constituting less than one unit in relation to Toyota Shares (the system under which shareholders can request Toyota to purchase their shares constituting less than one unit in accordance with Article 192, Paragraph 1 of the Companies Act.).

If the number of the shares of Toyota common stock that will be delivered to any shareholder of Misawa Homes (excluding Toyota Housing) as a result of the Share Exchange includes a fraction of less than one share, Toyota Housing will pay cash in an amount calculated by multiplying the market value for one share of Toyota common stock by such fraction (however, fractions of a yen will be rounded up) to each such shareholder in lieu of delivery of such fractional number of shares of Toyota common stock.

The aforementioned “market value for one share of Toyota common stock” means the closing price for regular transactions of Toyota’s common stock on the last trading day on the TSE immediately preceding the effective date of the Share Exchange (if there is no closing price on such immediately preceding trading day, the closing price will be the closing price on the closest trading day with a closing price (limited to those preceding the effective date)).

Not applicable.

The Share Exchange is a so called “triangular share exchange” in order to achieve the purpose of the Share Exchange and to provide the shareholders of Misawa Homes, which is the wholly owned subsidiary resulting from the share exchange, with the benefit of the synergies due to the Share Exchange and the

App. C. Ex1-11

Integration, and the Share Exchange allots Toyota Shares (Toyota is the wholly owning parent company of Toyota Housing) as consideration in the Share Exchange rather than Toyota Housing Shares.

In order to ensure the fairness and appropriateness of the valuation of the share allotment ratio used in the Share Exchange (“Share Exchange Ratio”) as described above in “2. Outline of the Share Exchange (3) Details of Allotment in the Share Exchange,” Toyota and Misawa Homes separately selected third-party valuation institutions independent from Toyota, Toyota Housing and Misawa Homes to calculate the share exchange ratio. Toyota selected Nomura Securities Co., Ltd. (“Nomura”) and Misawa Homes selected SMBC Nikko Securities, Inc. (“SMBC Nikko”) as their respective valuation institutions.

Toyota, Toyota Housing and Misawa Homes negotiated and discussed the Share Exchange Ratio based on due diligence, etc. by Toyota and Misawa Homes concerning one another, comprehensively taking into account factors such as Toyota’s and Misawa Homes’ financial condition, assets and future prospects, and making reference to the valuation analysis that they received from Toyota’s and Misawa Homes’ respective third-party valuation institutions. As a result of such negotiations and discussions, Toyota, Toyota Housing and Misawa Homes concluded that the Share Exchange Ratio was appropriate and that such ratio would not impair the interests of their respective shareholders, and therefore concluded that it is appropriate to conduct the Share Exchange using the Share Exchange Ratio. Please note that, in accordance with the Share Exchange Agreement, the Share Exchange Ratio may be changed upon discussions among Toyota, Toyota Housing and Misawa Homes if there is a material change in the various conditions on which the valuation is based.

Both Nomura, which is acting as a third-party valuation institution to Toyota, and SMBC Nikko, which is acting as a third-party valuation institution to Misawa Homes, are not related parties of Toyota, Toyota Housing or Misawa Homes, are independent valuation institutions, and have no material relationship that should be stated in connection with the Share Exchange.

With regard to Toyota, as Toyota is listed on financial instruments exchanges and a market share price exists, Nomura used an average market price analysis for the valuation (with May 7, 2019 as the valuation base date, the analysis was based on the average closing share prices for the most recent six month-period from November 8, 2018 to the valuation base date, the most recent three month-period from February 8, 2019 to the valuation base date, the most recent one month-period from April 8, 2019 to the valuation base date, and the five business days from April 23, 2019 to the valuation base date, as well as the closing share price of Toyota Shares on the first section of the TSE on the base date).

With regard to Misawa Homes, as Misawa Homes is listed on financial instruments exchanges and a market share price exists, Nomura used an average market price analysis for the valuation (with May 7, 2019 as the valuation base date, the analysis was based on the average closing share prices for the most recent six month-period from November 8, 2018 to the valuation base date, the most recent three month-period from February 8, 2019 to the valuation base date, the most recent one month-period from April 8, 2019 to the valuation base date, and the five business days from April 23, 2019 to the valuation base date, as well as the closing share price of Misawa Shares on the first section of the TSE on the base date). In addition, as there are several comparable listed companies for which comparison to Misawa Homes is possible, and it is possible to infer by analogy the share value through a comparable company analysis, a comparable company analysis was also used in the valuation. Furthermore, in order to take into account the state of future business operations in the valuation, a discounted cash flow analysis (“DCF Analysis”) was also used in the valuation. In the DCF Analysis,

App. C. Ex1-12

future cash flows based on financial projections assuming implementation of the Share Exchange for the period from the fiscal year ending March 31, 2020 to the fiscal year ending March 31, 2023 were discounted to the present value using a set discount rate to calculate the share value.

The valuation ranges for one share of stock for Toyota Shares are as follows.

In valuing the share exchange ratio above, Nomura used information that was provided by Toyota and Misawa Homes as well as publicly available information on the assumption that they are accurate and complete without any independent verification for accuracy and completeness. Nomura did not independently perform any valuation, appraisal or assessment of assets and liabilities (including contingent liabilities) of both companies and their affiliates, including an analysis or valuation of individual assets or liabilities, nor did it request any third-party institution to make such appraisal or assessment. The valuation of the share exchange ratio by Nomura is based on information available and economic conditions as of May 7, 2019. Nomura also assumed that the financial projections of both companies had been reasonably considered or prepared based on the best projections and judgment then available to the management of both companies.

Financial projections submitted by Misawa Homes that Nomura used as a basis for applying the DCF Analysis did not contain a significant increase or decrease in earnings in any fiscal year.

SMBC Nikko used a market price analysis with respect to Toyota since it is listed on financial instruments exchanges and market prices exist. In the market price analysis, SMBC Nikko used May 8, 2019 as the analysis reference date, using the simple average value of the closing prices on the First Section of the TSE for the one-month, three-month, and six-month periods before the reference date.

With regard to Misawa Homes, SMBC Nikko used for its analysis a market price analysis since Misawa Homes is listed on financial instruments exchanges and market prices exist, a comparable listed company analysis as there are several comparable listed companies for which comparison to Misawa Homes is possible, and it is possible to infer by analogy the equity value through a comparable listed company analysis, and a DCF Analysis in order to take into account the state of future business operations in the analysis.

In performing the market price analysis, SMBC Nikko used May 8, 2019 as the analysis reference date, using the simple average value of the closing prices on the First Section of the TSE for the one-month, three-month, and six-month periods before the reference date.

With respect to the comparable listed company analysis, SMBC Nikko selected Sekisui House, Ltd., Iida Group Holdings Co., Ltd., Sumitomo Forestry Co., Ltd., Open House Co., Ltd., TamaHome Co., Ltd. and Sanei Architecture Planning Co., Ltd. as comparable listed companies that may be considered to have similarities with Misawa Homes, and performed its analysis using multiples of EBITDA of the enterprise value.

In the DCF Analysis, SMBC Nikko analyzed the enterprise value of Misawa Homes by discounting future cash flows, which were based on financial forecasts prepared by Misawa Homes for the period from the fiscal year ended March 31, 2019 to the fiscal year ending March 31, 2023, to their present values at a set discount rate. The terminal value in the DCF Analysis was analyzed by the multiples method and the perpetual growth rate method. Specifically, SMBC Nikko applied a discount rate of 4.5%~5.6%, and 5.8~7.1 as the EBITDA multiples in the multiple method and a perpetual growth rate of -0.25%~0.25%.

App. C. Ex1-13

The ranges for the number of shares of common stock of Toyota allotted for one share of common stock of Misawa Homes using each analysis method are as follows:

In analyzing the share exchange ratio, SMBC Nikko in principle used information received from Toyota and Misawa Homes as well as publicly available information as is and assumed that all such materials and information it used were accurate and complete and that there are no facts undisclosed to SMBC Nikko that may materially affect the analysis of the share exchange ratio, without independently verifying the accuracy and completeness thereof. SMBC Nikko has not independently valued, appraised, or assessed the assets and liabilities (including contingent liabilities) of both companies, and their respective subsidiaries and affiliates, including an analysis or valuation of each individual asset or liability, and SMBC Nikko has also not requested any third-party institution to make such appraisal or assessment. In addition, SMBC Nikko assumed that the financial projections of Misawa Homes referenced in the analysis had been reasonably prepared based on the best projections and judgment then available to the management of Misawa Homes. The analysis of the share exchange ratio by SMBC Nikko reflects the information and economic conditions as of May 8, 2019. Additionally, SMBC Nikko’s analysis of the share exchange ratio is not a statement of its opinion on the fairness of the share exchange ratio in the Share Exchange.

Financial projections submitted by Misawa Homes that SMBC Nikko used as a basis for applying the DCF Analysis did not contain a significant increase or decrease in earnings in any fiscal year. Additionally, such financial projections do not assume implementation of the Share Exchange.

Misawa Homes will become a wholly owned subsidiary of Toyota Housing through the Share Exchange on the effective date (planned date: January 7, 2020), and Misawa Shares are scheduled to be delisted on December 30, 2019 (planned last day of trading: December 27, 2019) pursuant to the delisting criteria of the TSE and NSE. Please note that, in the event the current effective date of the Share Exchange is changed, the delisting date will be changed as well.

Misawa Homes’ shareholders will be unable to trade Misawa Shares on the TSE and NSE after delisting, but as Toyota Shares allotted to Misawa Homes’ shareholders through the Share Exchange are listed on the TSE and NSE, they may be traded on financial instruments exchange markets on and after the effective date of the Share Exchange. Therefore, in the case of Misawa Homes’ shareholders who hold 646 or more shares of Misawa Homes stock at the Record Time, who will thus receive allotments of at least 100 shares of Toyota common stock, which is the number of shares of stock constituting one unit of Toyota Shares, while such shareholders may also receive allotment of shares constituting less than one unit in proportion to the number of shares held, we believe that we will be able to provide liquidity with respect to shares comprising one unit or more.

Shareholders who hold less than 646 Misawa Shares as of the Record Time will be allotted shares constituting less than one unit of Toyota Shares (less than 100 shares) as a result of the Share Exchange. Although such shareholders will be entitled to receive Toyota dividends with record dates on or after the effective date of the Share Exchange in proportion to the number of shares held by them, they will not be able to sell such shares constituting less than one unit on any financial instruments exchange markets. Shareholders who will hold shares constituting less than one unit of Toyota Shares can request Toyota to purchase their shares constituting less than one unit. For details of treatment of shares constituting less than one unit, see “2. Outline of the Share Exchange (3) Details of Allotment in the Share Exchange (Note 5)

App. C. Ex1-14

Treatment of Shares Constituting Less than One Unit” above. For details of treatment of fractional shares allotted in the Share Exchange, see “2. Outline of the Share Exchange (3) Details of Allotment in the Share Exchange (Note 6) Treatment of Fractional Shares” above.

Shareholders of Misawa Homes common stock will continue without change to be able to trade the Misawa Shares they hold on the TSE and NSE and exercise their legal rights provided by the Companies Act and other related laws and regulations until the last trading day December 27, 2019 (planned).

Since Toyota Housing already owns 21,965,898 Misawa Shares (51.00% of the 43,070,163 total issued shares as of March 31, 2019) and Misawa Homes is a consolidated subsidiary of Toyota Housing, it was determined that it is necessary to ensure fairness of the Share Exchange. Therefore, in order to ensure fairness, the following measures have been implemented:

Toyota selected Nomura as a third-party valuation institution independent from Toyota, Toyota Housing and Misawa Homes and obtained a valuation report dated May 8, 2019 regarding the share exchange ratio. Please see “(2) Matters Concerning Valuation” above for an outline of the valuation report.

Misawa Homes selected SMBC Nikko as a third-party valuation institution independent from Toyota, Toyota Housing and Misawa Homes and obtained a financial analysis report dated May 8, 2019 regarding the share exchange ratio. Please see “(2) Matters Concerning Valuation” above for an outline of the financial analysis report.

Neither Toyota nor Misawa Homes has obtained an opinion from either third-party valuation institution to the effect that that the Share Exchange Ratio is appropriate or fair from a financial perspective.

Toyota and Toyota Housing appointed Nagashima Ohno & Tsunematsu and Misawa Homes appointed Hibiya Park Law Offices as their respective legal advisors for the Share Exchange, and received legal advice concerning the procedures of the Share Exchange and the decision-making method and process, etc. Nagashima Ohno & Tsunematsu and Hibiya Park Law Offices are independent of, and have no material relationship with, Toyota, Toyota Housing and Misawa Homes.

Since Toyota Housing is the controlling shareholder of Misawa Homes that already owns 21,965,898 Misawa Shares (51.00% of the 43,070,163 total issued shares as of March 31, 2019), the following measures have been implemented in order to avoid conflicts of interest:

In order to increase the transparency and objectivity of Misawa Homes’ examination of the share exchange, as well as to ensure the fairness of the transaction and confirm that conducting the Share Exchange will not be disadvantageous to Misawa Homes’ minority shareholders, as of March 28, 2019 Misawa Homes established a Third-Party Committee comprising members with no material relationship with the controlling shareholders, Toyota and Toyota Housing (committee members: Ryota Miura, Attorney-at-Law (Miura & Partners); Shinsuke Hasegawa, Certified Public Accountant

App. C. Ex1-15

and Certified Public Tax Accountant (Hasegawa Certified Public Accountant Office); and Masakazu Iwaki, Independent Outside Director of Misawa Homes). The members of the Third-Party Committee have not changed since its establishment. In considering the Share Exchange, Misawa Homes sought the advice of the Third-Party Committee as to whether (a) the purpose of the Share Exchange was legitimate and reasonable, (b) the fairness of procedures of the Share Exchange was ensured, (c) the legitimacy and appropriateness of the transaction terms and conditions were ensured, and (d) based on (a), (b) and (c) above, conducting the Share Exchange would not be disadvantageous to the minority shareholders of Misawa Homes (collectively, the “Terms of Reference”).

From April 3, 2019 to April 26, 2019, the Third-Party Committee was convened five times, and received explanations of details such as the purpose of the Share Exchange, the background leading to the Share Exchange, the negotiation status of various terms and conditions of the Share Exchange, and the details of the series of procedures planned for after the Share Exchange, and held question and answer sessions regarding these points. The Third-Party Committee also received an explanation from SMBC Nikko of its approach as a third-party valuation institution regarding the share exchange ratio of the Share Exchange, and asked SMBC Nikko questions. Additionally, the Third-Party Committee made a total of three written inquiries to Toyota and Toyota Housing with respect to the Share Exchange, and confirmed their approach, current awareness and business expansion plans after the Share Exchange, and other related matters.

Having carried out the foregoing, the Third-Party Committee conducted careful discussions and examinations of the Terms of Reference based on the respective explanations, valuation results, details of Q&As, and other examination materials, and on May 9, 2019, submitted a written opinion to Misawa Homes’ board of directors to the effect that the Share Exchange is not disadvantageous to Misawa Homes’ minority shareholders.

Please see “9. Transactions with Controlling Shareholders (3) Outline of Opinion Obtained from a Party Who Has No Material Relationship with the Controlling Shareholder Stating that the Relevant Transactions Would Not Be Disadvantageous to the Minority Shareholders” below for an outline of the opinion of the Third-Party Committee.

Among the Directors of Misawa Homes, as Mr. Masashi Isogai and Mr. Hideyuki Yoshimatsu both formerly worked for Toyota and Toyota Housing, as Mr. Tadashi Yamashina concurrently serves as the President of Toyota Housing, as Mr. Yuji Goto and Mr. Naoki Teramoto both concurrently serve as Directors of Toyota Housing, and as Mr. Sumio Yokota concurrently serves as Associate Director for Toyota Housing, from the perspective of avoiding conflicts of interest, they did not participate in Misawa Homes board of directors deliberation of, and resolution concerning, the Share Exchange, and did not participate in discussions and negotiations of the Share Exchange with Toyota and Toyota Housing on behalf of Misawa Homes. Among Misawa Homes’ Audit and Supervisory Board Members, as Mr. Hirohiko Fukatsu concurrently serves as an Audit and Supervisory Board Member of Toyota Housing, he did not participate in Misawa Homes’ board of directors deliberation of the Share Exchange, and refrained from stating any opinion regarding the resolution on the Share Exchange at that same meeting of the board of directors.

The agenda proposal for the Share Exchange at the meeting of Misawa Homes’ board of directors was unanimously approved by all six directors other than those above, and both of the Audit and Supervisory Board Members other than the Audit and Supervisory Board Member above stated that they had no objections to conducting the Share Exchange.

(In millions of yen unless otherwise noted)

(In millions of yen unless otherwise noted)

App. C. Ex1-19