Exhibit 2.2
AMENDMENT NO. 1, dated as of July 16, 1998 (this "Amendment"), to the
Agreement and Plan of Merger, dated as of May 27, 1998 (the "Merger Agreement"),
among Ispat International N.V., a company organized under the laws of The
Netherlands ("Ispat"), Inland Merger Sub, Inc., a Delaware corporation and a
wholly owned subsidiary of Ispat ("Merger Sub"), Inland Steel Industries, Inc.,
a Delaware corporation ("ISI"), and Inland Steel Company, a Delaware corporation
and a wholly owned subsidiary of ISI ("ISC").
WITNESSETH:
WHEREAS, Ispat, Merger Sub, ISI and ISC have entered into the Merger
Agreement; and
WHEREAS, Ispat, Merger Sub, ISI and ISC desire to amend the Merger
Agreement in certain respects.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and understandings hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Amendments to the Merger Agreement. The Merger Agreement
is hereby amended as follows:
(a) The words "less $3,200,000" are hereby inserted after the word
"Date" in Section 2.08(a).
(b) The words "June 30, 1998" are hereby inserted in replacement for
the term "Effective Time" the second and third times such term appears
in Section 2.11(a).
(c) The following is hereby inserted after the end of Section 5. 01
(c):
"(d) ISI shall maintain, or cause to be maintained, for the
benefit of (and at the sole cost and risk of the Surviving Corporation
for a period of 90 days after the Closing Date, the letters of credit
in favor of Employers Insurance of Wausau ("Wausau"), as in place
immediately prior to the Effective Time for the benefit of ISC by
LEETS, a subsidiary of ISI, which letters of credit are required as
collateral supporting the ISC casualty insurance coverage provided by
Wausau.
(e) Prior to the Effective Time, ISI shall sell, assign,
transfer and deliver to ISC, or cause to be sold, assigned,
transferred and delivered to ISC, all of the common stock of Nippon
Steel Corporation owned by ISI and its subsidiaries. The aggregate
purchase price for such shares shall be an amount equal to the average
closing price for such shares on the Tokyo Stock Exchange over the
five trading days immediately preceding the transfer date multiplied
by the number of such shares. The purchase price for such shares shall
be paid by
increasing the amount of Intercompany Indebtedness owing from ISC to
ISI payable by Ispat to ISI under Section 2.08(a) on the Closing Date.
(d) The following is hereby inserted after the end of Section 5.07:
"From and after 180 days after the Closing Date, neither ISI nor
its Affiliates will be permitted to use the "red diamond" logo;
provided that, prior to such time ISI and its Affiliates will be
permitted to use such "red diamond" logo in the same manner as such
logo is being used by such company as of the date hereof ; provided,
further, that Ispat will not unreasonably withhold its consent to a
reasonable extension of such 180-day period if promptly after the
Effective Time ISI commences action reasonably calculated to result in
such logo being changed or eliminated as promptly as practicable
thereafter."
(e) The following is hereby inserted after the end of Section 5.13:
"SECTION 5.14. PBGC. ISI shall prior to the Effective Time cause
Ryerson Xxxx, Inc. to execute a guaranty in favor of the PBGC in the
amount of $50,000,000 which shall be on terms acceptable to the PBGC
and Ryerson Xxxx, Inc. Ispat shall take all necessary action to cause
such guaranty to be terminated or replaced on or prior to the fifth
anniversary of the date hereof, as contemplated by the Term Sheet
dated July 15, 1998 among ISC, Ispat, ISI, Ryerson Xxxx, Inc. and the
PBGC. Ispat hereby confirms and agrees that Ryerson Xxxx, Inc. shall
be subrogated to the rights of the PBGC against Ispat and ISC to the
extent of any payment made by Ryerson Xxxx, Inc. under such guaranty.
Ispat further agrees that it shall reimburse Ryerson Xxxx, Inc. for
all reasonable expenses, including attorney's fees, incurred in
enforcing any such subrogation.
SECTION 5.15. Consents. (a) ISI and Ispat acknowledge that the
final consent required from Mitsui & Co., Ltd., Nissho Iwai
Corporation and Mitsubishi Corporation will not be obtained prior to
the Effective Time. If such consent is not received and the I/N Tek
indebtedness the subject of such consent (the "Existing Indebtedness")
is accelerated, ISI and Ispat shall each lend to I/N Tek or otherwise
fund 30% of such accelerated Existing Indebtedness, on terms and
conditions substantially identical to the Existing Indebtedness (the
"Temporary Indebtedness"). In addition, ISI and Ispat shall share
equally all penalties and other costs and expenses that are incurred
by ISC and its subsidiaries, and its post-Merger affiliates that are
providing financing with respect to the Merger and only with respect
to such financing, as a result, directly or indirectly, of the failure
to obtain such consent (including without limitation, those incurred
as a result of such acceleration).
(b) Ispat agrees to use all reasonable efforts to refinance the
Temporary Indebtedness and replace ISI with Ispat on the related
guaranty as
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promptly as practicable, but shall only be required to do so if the
new indebtedness that can be obtained to replace the Existing
Indebtedness (the "Replacement Indebtedness") is on substantially
similar or more favorable terms than the Existing Indebtedness. Ispat
shall keep ISI reasonably informed of the status of such refinancing.
(c) If the Existing Indebtedness is accelerated, and I/N Tek
incurs Replacement Indebtedness at an interest rate lower in the
aggregate than the interest rate applicable to the Existing
Indebtedness, Ispat shall pay to ISI 50% of the then net present value
(using a discount rate equal to the interest rate for the Replacement
Indebtedness) of the difference between 60% of the aggregate amount of
interest which will become payable on the Existing Indebtedness and
60% of the aggregate amount of interest which will become payable on
the Replacement Indebtedness.
(d) If the Existing Indebtedness is accelerated, and I/N Tek
incurs Replacement Indebtedness at an interest rate higher in the
aggregate than the interest rate applicable to the Existing
Indebtedness, ISI shall pay to Ispat 50% of the then net present value
(using a discount rate equal to the interest rate for the Replacement
Indebtedness) of the difference between 60% of the aggregate amount of
interest which will become payable on the Replacement Indebtedness and
60% of the aggregate amount of interest which will become payable on
the Existing Indebtedness."
(f) The following is hereby inserted at the end of clause (b) of
Section 9.03:
"; provided that unless and until the guaranty by Ryerson Xxxx, Inc.
in favor of the PBGC is terminated or replaced by Ispat as described
in the second sentence of Section 5.14, the amount of such Losses
payable under clauses (i) and (ii) of Section 9.02(a) shall not exceed
$90,000,000 less (x) the amount of such guaranty not terminated or
replaced or (y) if such guaranty has been drawn upon by the PBGC, the
amount not terminated or replaced of such guaranty which has not been
drawn upon plus the amount of such guaranty that has been drawn upon
and not repaid by Ispat as provided in Section 5.14 (such difference,
the "Indemnification Amount Payable");"
(g) New Section 9.06 is hereby inserted after the end of Section
9.05:
"SECTION 9.06. Additional Matters. (a) At or prior to the Effective
Time ISI shall purchase, or shall cause to be purchased, an insurance
policy in form and substance satisfactory to Ispat (the "Environmental
Insurance Policy") covering certain potential Losses with respect to
environmental matters, providing coverage for such Losses up to an
amount equal to $90,000,000 identifying as insured the Surviving
Corporation and all its subsidiaries and ventures making
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Ispat an additional insured with respect to the operations of the
Surviving Corporation and such subsidiaries and ventures and also
making ISI an additional insured.
(b) Indemnification for Losses under Section 9.02 shall be
payable by ISI only if, and to the extent that, such Losses are within
the scope of ISI's indemnification obligation under Section 9.02 and
are not recovered pursuant to the Environmental Insurance Policy
(whether by way of operation of a deductible, retention amount,
exclusions from coverage or similar limitations) after the exercise of
good faith commercial efforts by Ispat, the Surviving Corporation and
its subsidiaries and ventures as appropriate. Notwithstanding the
foregoing, no amount shall be payable under Section 9.02 with respect
to any Loss that would be covered under the Environmental Insurance
Policy but for the operation of the $90,000,000 limit on the policy
therein. Ispat shall not settle any claim under the Environmental
Insurance Policy unless it believes such settlement to be a reasonable
resolution of such insurance claim.
(c) Anything in Section 9.03 to the contrary notwithstanding,
ISI shall not be obligated to pay claims for indemnification by an
Ispat Indemnified Party during the five-year period after the
Effective Time in excess of $40,000,000 so long as the guaranty
described in Section 5.14 has not been terminated or replaced.
Indemnification claims submitted by the Ispat Indemnified Parties
during such five-year period which in the aggregate exceed $40,000,000
shall be considered "Deferred Claims" for purposes of this Article IX.
Deferred Claims shall be made, processed and resolved on the same
terms and conditions as all other claims under this Article IX, and
shall be paid if and when the Indemnification Amount Payable is
sufficient to pay all or any portion of such claim.
(d) In the event coverage is denied under the existing business
interruption insurance policy for losses resulting from the shut down
of Blast Furnace No. 7 beginning on July 3, 1998, ISI shall indemnify
ISC for the amount of ISC's substantiated business interruption
losses. Such indemnification shall not otherwise be subject to any
limitations in this Article IX and shall not be applied to the amount
specified in clause (b) of Section 9.03."
SECTION 2. Effect of Amendments. Except as and to the extent
expressly modified by this Amendment, the Merger Agreement shall remain in full
force and effect in all respects.
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
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SECTION 4. Counterparts. This Amendment may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Ispat, Merger Sub, ISI and ISC have caused this
Amendment to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ISPAT INTERNATIONAL N.V.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxx
Title:
By: /s/ T. N. Ramaswamy
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Name: T. N. Ramaswamy
Title:
INLAND MERGER SUB, INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Secretary and Vice President
INLAND STEEL INDUSTRIES, INC.
By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
Title: Vice President and CFO
INLAND STEEL COMPANY
By: /s/ Xxxxx X. Avril
------------------------------
Name: Xxxxx X. Avril
Title: Treasurer
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