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REFERENCE:
In the event of the consolidation of National Steel and U.S. Steel, NKK will exchange its 22.1 million shares of National Steel common stock and US$ 100 million loan to National Steel for certain warrant and convertible loan, respectively as described below.
1. Description of the Warrant
| 1) Expiration |
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June 15, 2007 |
| 2) Exercise price |
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150% of the average closing price of U.S. Steel common stock during 60 trading days before the issuance of the Warrant. |
| 3) Warrant share |
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4 million shares of U.S. Steel common stock to be issued upon exercise of the Warrant. |
2. Description of the Convertible Note
| 1) Issuer |
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U.S. Steel or a wholly owned subsidiary of U.S. Steel set up for the consolidation |
| 2) Amount |
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US$30,000,000.- |
| 3) Interest |
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None |
| 4) Term |
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20 years |
| 5) Equity conversion |
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After the fifth anniversary of issuance, the Note will become convertible into 1 million shares of U.S. Steel common stock. |
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