EXHIBIT 10(a)
CONFIDENTIAL TREATMENT
CLEVELAND-CLIFFS INC HAS REQUESTED THAT THE
MARKED PORTIONS OF THIS DOCUMENT BE ACCORDED
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934
AMENDED AND RESTATED PELLET SALE AND PURCHASE AGREEMENT
THIS AGREEMENT, entered into, dated and effective as of May 17, 2004
("Agreement"), by and among THE CLEVELAND-CLIFFS IRON COMPANY, an Ohio
corporation ("Iron"), CLIFFS MINING COMPANY, a Delaware corporation ("Mining"),
NORTHSHORE MINING COMPANY, a Delaware corporation ("Northshore"), CLIFFS SALES
COMPANY, an Ohio corporation ("Sales"; Iron, Mining, Northshore and Sales being
collectively referred to herein as "Cliffs"), INTERNATIONAL STEEL GROUP INC., a
Delaware corporation ("ISG"), and ISG WEIRTON INC., a Delaware corporation ("ISG
Weirton"; ISG, and ISG Weirton being collectively referred to herein as
"Steel").
RECITALS
WHEREAS, Cliffs and Weirton Steel Corporation ("Weirton") are parties to
that certain Pellet Sale and Purchase Agreement dated September 30, 1991 (the
"Original Contract"), pursuant to which Cliffs provided Weirton with iron ore
pellets in connection with Weirton's steel manufacturing and processing
activities;
WHEREAS, on May 19, 2003, Weirton filed for protection under Chapter 11 of
the United States Bankruptcy Code in the bankruptcy case styled In re: Weirton
Steel Corporation, et al., case number 5:03-BK-1802 (the "Bankruptcy Case") in
the United States Bankruptcy Court for the Northern District of West Virginia;
WHEREAS, at the time of the filing of the Bankruptcy Case, Cliffs and
Cleveland-Cliffs Inc asserted a claim for Weirton's alleged default under the
Original Contract in the amount of $1,010,996.82 (the "Cure Amount");
ISG WEIRTON AMD PELLET SALE
WHEREAS, in connection with the Bankruptcy Case, Steel has acquired
substantially all of Weirton's assets, including an assignment by Weirton of the
Original Contract pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code
to Steel, which Steel has expressly agreed to assume;
WHEREAS, in order to secure the consent of Cliffs to the assignment by
Weirton and the assumption by ISG of the Original Contract, Cliffs and Steel
have entered into a certain letter agreement dated April 21, 2004, setting forth
the terms and conditions by which the Cure Amount would be waived by Cliffs and
the Original Contract would be amended; and
WHEREAS, Cliffs desires to continue to sell to Steel and Steel desires to
continue to purchase from Cliffs certain quantities of grades of iron ore flux
pellets and iron ore standard pellets as follows: (i) such grades of iron ore
flux pellets being those produced at the Xxxxxx Mining Company, L.C. iron ore
pellet plant ("Xxxxxx Pellets"), located in Xxxxxx, Michigan; (ii) such grades
of iron ore standard pellets being those produced at the Northshore Mining
Company iron ore pellet plant ("Northshore Pellets"), located in Silver Bay,
Minnesota; (iii) such grades of iron ore standard pellets being those produced
at the Hibbing Taconite Company Joint Venture iron ore pellet plant ("Hibbing
Pellets"), located in Hibbing, Minnesota; (iv) such grades of iron ore partially
fluxed pellets produced at the United Taconite LLC iron ore pellet plant ("Utac
Pellets"), located in Eveleth, Minnesota; or (iv) such other pellet grades as
may be mutually agreed to by the parties hereto (such Xxxxxx Pellets, Northshore
Pellets, Hibbing Pellets, Utac Pellets and other mutually agreed upon pellets
collectively being referred to herein
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
as "Cliffs Pellets"), all upon the terms and subject to the conditions contained
herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, Cliffs and Steel agree as follows:
SECTION 1. - DEFINITIONS.
The terms quoted in the above parentheses of the first introductory
paragraph of this Agreement and the WHEREAS clause, other terms quoted
throughout this Agreement, and the terms defined below in this Section 1 shall
have the meanings assigned to them for purposes of this Agreement. Attached as
Appendix I to this Agreement is a locator list of all defined terms used
throughout the Agreement.
(a). The words, "Steel's Annual Pellet Tonnage Requirements", as used
herein, shall mean for the years 2004 and 2005, the greater of [****] of Steel's
total annual iron ore pellet requirements, or [****] tons and, for the years
2006 through and including 2018, a tonnage amount equal to Steel's total annual
iron ore pellet tonnage requirements, with a minimum annual purchase obligation
of [****] tons per year, required for consumption in Steel's iron and steel
making facilities in any year at ISG Weirton, located in Weirton, West Virginia
("Weirton Works"). The word "pellets", as used herein, shall mean iron-bearing
products obtained by the pelletizing of iron ore or iron ore concentrates,
suitable for making iron in blast furnaces.
(b). The word "ton", as used herein, shall mean a gross ton of 2,240
pounds avoirdupois natural weight.
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
(c). The words "net ton", as used herein, shall mean a ton of 2,000 pounds
avoirdupois natural weight.
(d). The word "year", as used herein, shall mean a calendar year
commencing on January 1 and ending December 31.
SECTION 2. - SALE AND PURCHASE/TONNAGE.
During each of the years 2004 through 2018, and each year thereafter as
long as this Agreement remains in effect, Cliffs shall sell and deliver to Steel
and Steel shall purchase and receive from Cliffs and pay for a tonnage of Cliffs
Pellets which tonnage shall be equal to Steel's Annual Pellet Tonnage
Requirements for each such year.
SECTION 3. - PELLET GRADES; QUALITY
(a). For the years 2004 and 2005, the Cliffs Pellets shall consist of 100%
Xxxxxx Pellets. For the years 2006 and beyond, the Cliffs Pellets delivered
hereunder shall be allocated [****] Xxxxxx Pellets and [****] consisting of any
combination, determined by Cliffs in its sole discretion, of Northshore Pellets,
Hibbing Pellets or Utac Pellets.
(b). Cliffs Pellets when loaded for shipment will be consistent with the
typical specifications and analysis limits set forth in Exhibit 1 to this
Agreement.
(c). In the event the monthly average vessel analysis exceeds one standard
deviation as set forth in Exhibit 1 to this Agreement, Cliffs will take such
commercially reasonable actions as shall be necessary to achieve specification
conformity. If specification conformity cannot be achieved, Steel and Cliffs
shall
ISG WEIRTON AMD PELLET SALE
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negotiate in good faith to determine what actions or remedies, if any, are
appropriate.
(d). If any two vessel shipments made during any calendar month have
analysis that exceeds the analysis limits in the specifications set forth in
Exhibit 1, Steel may refuse any subsequent vessel shipments during that calendar
month, and Steel shall not be required to accept any subsequent shipments until
Cliffs has taken action to remedy the non-conformity so that future shipments
will be within the analysis limits. If more than two vessel shipments made
during any calendar month have analysis that exceeds such limits, Cliffs and
Steel shall negotiate an appropriate cost adjustment (if any) for the cargoes in
excess of the first cargo that exceeded the analysis limits, based upon the
additional costs (if any) to Steel associated with the quality specifications in
the additional vessel shipments made during that calendar month that exceeded
such analysis limits.
SECTION 4. - NOTIFICATION AND NOMINATION.
(a). With respect to the tonnage of Cliffs Pellets to be purchased by
Steel for the year 2004, as provided in Section 2, on or before June 30, 2004 of
the current year, Steel shall notify Cliffs in writing of Steel's preliminary
tonnage of Steel's Annual Pellet Tonnage Requirements which Steel shall purchase
from Cliffs. Such notification shall be in the form set forth in Exhibits 2A and
2B to this Agreement and shall include the following: (i) Steel's Annual
Operating Plan for the Weirton Works for the balance of the current year
detailed by months, as such Annual Operating Plan relates to Steel's planned
monthly consumption of all pellets for such year at the Weirton Works; (ii) the
tonnage of Cliffs Pellets which
ISG WEIRTON AMD PELLET SALE
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Steel expects to purchase in the current year from Cliffs for the Weirton Works;
and (iii) Steel's planned monthly pellet consumption of all pellets for the
first four months of the year 2005 at the Weirton Works.
(b). With respect to the tonnage of Cliffs Pellets to be purchased by
Steel for the Weirton Works for each of the years 2005 through 2018, as provided
in Section 2, on or before November 1 of each of the years prior to the years
above, Steel shall notify Cliffs in writing of Steel's preliminary tonnage of
Steel's Annual Pellet Tonnage Requirements which Steel shall purchase from
Cliffs. Such notification shall be in the form set forth in Exhibits 2A and 2B
to this Agreement and shall include the following: (i) Steel's Annual Operating
Plan for the Weirton Works for the following year detailed by months, as such
Annual Operating Plan relates to Steel's planned monthly consumption of all
pellets for such year; (ii) the tonnage of Cliffs Pellets which Steel expects to
purchase in the following year from Cliffs for the Weirton Works; (iii) Steel's
expected total pellet inventory as of December 31 for the then current year;
(iv) Steel's planned total pellet inventory on December 31 for the following
year; and (v) Steel's planned monthly pellet consumption for the first four
months of the year which succeeds the following year.
(c). With respect to the tonnage of Xxxxxx Pellets, Northshore Pellets,
Hibbing Pellets and Utac Pellets which Cliffs will have available for sale to
Steel in 2006, on or before December 31, 2005, and in each succeeding year
thereafter as provided for in Section 4(b) above, Cliffs shall notify Steel in
writing as to the tonnage of Xxxxxx Pellets, Northshore Pellets, Hibbing Pellets
and Utac Pellets
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Cliffs shall sell to Steel, which tonnage shall equal Steel's Annual Pellet
Tonnage Requirements for such year.
(d). [****]
(e). [****]
(f). [****]
SECTION 5. - PRICE, ADJUSTMENTS [**** ].
(a). The final year 2004 price for the Cliffs Pellets, either currently at
or to be delivered to Xxxxxx Dock located in Ashtabula, Ohio or Cleveland Bulk
Terminal located in Cleveland, Ohio or other Lake Erie dock that Steel and
Cliffs mutually agree to designate (collectively, the "Lower Lake Docks) shall
be as follows: Xxxxxx Pellets shall have a final year 2004 price of [****] per
ton (which at the expected natural iron content of [****] for Xxxxxx Pellets
equals [****] per iron unit); Northshore Pellets shall have a final year 2004
price of [****] per ton (which at the expected natural iron content of [****]
for Northshore Pellets equals [****] per iron unit); Hibbing Pellets shall have
a final year 2004 price of [****] per ton (which at the expected natural iron
content of [****] for Hibbing Pellets equals [****] per iron unit); and Utac
Pellets shall have a final year 2004 price of [****] per ton (which at the
expected natural iron content of [****] for Utac Pellets equals [****] per iron
unit).
(b). The prices for the specific grades of Cliffs Pellets sold and
purchased in each of the years 2005 and thereafter for the Weirton Works shall
be based on the 2004 base prices per iron unit as described in Section 5(a)
above
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
("2004 Base Prices "), which 2004 Base Prices shall then be adjusted, up or
down, in the year 2005 and each year thereafter by an amount as determined in
accordance with Section 5(c) below.
(c). In order to determine the adjusted prices to be paid each year for
the Cliffs Pellets, as provided for under Section 5(b) above, the 2004 Base
Prices and each of the following respective year's then adjusted prices per iron
unit shall be further adjusted, up or down, each year for the year in
determination as follows:
(1) Divide (x) the numerator, which is the amount by which the
[****] for the calendar year in determination changes (up or
down) from the immediately preceding calendar year's [****];
by (y) the denominator, which is the immediately preceding
calendar year's [****], and multiply the result obtained by
[****]; and
(2) Divide (x) the numerator, which is the amount by which the
[****] for the calendar year in determination changes from
the immediately preceding calendar year's [****]; by (y) the
denominator, which is the immediately preceding calendar
year's [****], and multiply the result obtain by [****]; and
(3) Sum the results obtained in paragraphs (1) and (2) above and
multiply that total by [****]; and
(4) Multiply the results determined in (3) above by the preceding
year's adjusted prices per iron unit for the Weirton Works
ISG WEIRTON AMD PELLET SALE
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
which will then equal the current year's price adjustment per
iron unit for the Weirton Works; and
(5) Add the result determined in (4) above to the preceding year's
adjusted price per iron unit for the Weirton Works, which will
then equal the current year's adjusted prices per iron unit
for the Weirton Works; and
(6) Multiply the result determined in (5) above by the current
year's expected natural iron content, which will then equal
the current year's estimated price per ton for the Weirton
Works.
Those adjusted prices per ton for the Weirton Works shall then become the
contract's year estimated price for the Cliffs Pellets delivered to the Lower
Lakes Docks for the year in determination.
(d). The price for all tons sold by Cliffs to Steel shall be based on
actual natural iron content shipped.
(e). Attached as Exhibit 3 is an example of the adjustment formula
applying the provisions of Sections 5(c) and 5(d).
(f). (i) [****]
(1) [****]
(2) [****]
(3) [****]
ISG WEIRTON AMD PELLET SALE
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
(4) [****]
(5) Attached as Exhibits 3 and 4 are examples of the calculations
applying the provisions of Sections 5(f)(i).
(ii) In the event that in any year [****] annual total [****] are
less than [****] of [****] total annual [****], then Cliffs and
Steel agree to review the annual total [****] of ISG Cleveland, Inc.
("ISG Cleveland"). If the annual total [****] of ISG Cleveland for
that year are greater than or equal to [****] of ISG Cleveland's
total annual [****], then the provisions of Section 5(f)(i) shall
apply without further modification. If such [****] threshold is
still not satisfied, then Cliffs and Steel agree to substitute
another [****] which substituted [****] comprises an amount in
excess of [****] of [****] total annual [****] in order to determine
the [****]. The [****] and [****] which are used for the [****], as
provided for in Section 5(f)(i) above, shall be adjusted as follows:
(i) the actual average [****] of [****] substituted [****] from the
previous year, less (ii) the [****] from the previous year, (iii)
with the difference between (i) and (ii) above being added to both
the [****] and the [****] to determine the revised [****] for the
substituted [****] in order to determine the [****].
SECTION 6. - PAYMENTS AND ADJUSTMENTS.
(a). Cliffs shall invoice Steel for each shipment of Cliffs Pellets
delivered to the Lower Lake Docks and payment for shipments of Cliffs Pellets
shall be
ISG WEIRTON AMD PELLET SALE
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
made via wire transfer no later than [****] following delivery of the Cliffs
Pellets to the Lower Lake Docks.
(b). Prices for Cliffs Pellets shall be adjusted on a calendar quarterly
basis based upon estimated and actual changes in the published indices specified
in Section 5(c) ("Quarterly Price Adjustment"). Cliffs shall calculate the
Quarterly Price Adjustment and provide Steel with such Quarterly Price
Adjustment by the 15th day after the end of each calendar quarter, or on such
later date as may be mutually agreed between Cliffs and Steel. Cliffs shall
issue an invoice or credit memo, as the case may be, to Steel concurrently with
the Quarterly Price Adjustment, and payment from Cliffs to Steel or Steel to
Cliffs, as the case may be, shall be made by the 15th day following issuance of
the invoice or credit memo, as the case may be.
(c). Following each contract year, final adjustments and payments shall be
determined as follows:
(1) The final [****] shall be determined by [****] and verified in
detail in writing to [****] by an officer of [****], such
verification due no later than January 31 of the year
following a contract year, and payment from Cliffs to Steel or
Steel to Cliffs, as the case may be, shall be made by February
15 of that year; and
(2) The adjustment to the contract year's price identified
pursuant to Section 5(c) shall be made by [****] by May 15 of
the following year (using the most recent final estimate of
the
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
[****] which shall be verified in writing by an officer of
[****]. Cliffs shall issue an invoice or credit memo, as the
case may be, to Steel, and payment from Cliffs to Steel or
Steel to Cliffs, as the case may be, shall be made by June 15
of that year.
(d). During the term of this Agreement, Cliffs shall have the right to
conduct, at Cliff's expense, pellet stockpile surveys at the Weirton Works to
verify (i) the tonnage of Cliffs Pellets which Steel has consumed and (ii) the
tonnage of Cliffs Pellets currently owned by Cliffs in stockpile at the Weirton
Works. In the event that the pellet stockpile survey results vary by more than
[****] (above or below) from [****] (after taking into account actual iron units
shipped versus actual iron units consumed), then Cliffs shall notify Steel and
the parties shall make appropriate, mutually agreeable adjustments to Steel's
preliminary nomination for the year issued pursuant to Section 4(b) of this
Agreement.
(e). At their own expense, Cliffs and/or Steel shall have an annual right
to have the information and calculations relating to the contract price, [***
*], and adjustments verified by an independent third party auditor. In the event
Steel shall fail to make payment when due of all amounts, Cliffs, in addition to
all other remedies available to Cliffs in law or in equity, shall have the
right, but not the obligation, to withhold further performance by Cliffs under
this Agreement until all claims Cliffs may have against Steel under this
Agreement are fully satisfied.
(f). All payments shall be made in U.S. dollars.
SECTION 7. - SAMPLING AND ANALYSES.
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
All pellet sampling procedures and analytical tests conducted on Cliffs
Pellets sold to Steel to demonstrate compliance with typical specifications and
analysis limits shall be performed on each pellet vessel shipment. Sample and
test methods shall be in accordance with Cliffs' existing practice and based on
the appropriate ASTM or ISO standard methods published at the time of testing or
the customary procedures and practices, or any other procedures and practices
that may be mutually agreed to by Cliffs and Steel. Steel may, at any time and
from time to time through one or more authorized representatives, and with prior
notice to Cliffs, be present during production, loading, or to observe sampling
and analysis of pellets being processed for shipment to Steel.
SECTION 8. - DELIVERY, STORAGE AND TRANSFER OF OWNERSHIP; GRANT OF SECURITY
INTEREST.
(a). Cliffs shall deliver to Steel the annual tonnage of Cliffs Pellets
for the Weirton Works to the Lower Lakes Docks. To the extent title to pellets
has been transferred to Steel in accordance with Section 8(b) of this Agreement,
inventory in dock storage may be held in Steel's name, but solely to the extent
of such payments.
(b). Title, and all risk of loss, damage or destruction of Cliffs Pellets
shall transfer to Steel upon [****] as provided for in Section 6(a).
(c). (i) Steel acknowledges and agrees that it is the intent of the
parties that title to the Cliffs Pellets shall pass to Steel solely
upon [****] in accordance with the terms of this agreement. However,
to secure the payment and performance of all obligations of Steel
due
ISG WEIRTON AMD PELLET SALE
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to Cliffs pursuant to this Agreement, Steel hereby grants, pledges
and assigns to Cliffs a purchase money security interest ("PMSI) in
all of Steel's right, title and interest in and to the Cliffs
Pellets, to extent that Steel takes possession of any Cliffs Pellets
in any fashion prior to making payment as required under Section
6(a) of this Agreement, as well as the proceeds of any of the Cliffs
Pellets, including the proceeds of any insurance related thereto
(collectively, the "Collateral").
(ii) The PMSI granted to Cliffs hereunder that attaches to a
specific shipment of inventory shall automatically terminate upon
the date of Cliffs' receipt from Steel of payment in full for said
shipment (the "PMSI Termination Date"). Prior to the applicable PMSI
Termination Date, the Collateral will at all times be free and clear
of any lien, security interest, mortgage, charge or encumbrance
created by or through Steel, or any of its affiliates, that is
senior to the security interest granted to Cliffs hereunder.
(iii) Steel hereby authorizes Cliffs to file UCC financing
statements, and any amendments, modifications or continuation
statements thereto, as Cliffs, in its sole discretion, deems
necessary or advisable to perfect its security interest in the
Cliffs Pellets granted hereunder, that describes the Collateral and
to include any information required for the sufficiency or filing
office acceptance of any such financing statements, amendments,
modifications or
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continuation statements. Steel covenants and agrees to (i) provide
promptly any information requested by Cliffs for inclusion on such
financing statements, amendments, modifications or continuation
statements and to provide prompt notice of any change in such
information and (ii) to take such further actions and duly execute
and deliver such further documentation as Cliffs may request in
order to protect fully its security interest in the Cliffs Pellets
granted hereunder.
(iv) Prior to the applicable PMSI Termination Date, Steel will keep
and preserve the Collateral in a commercially reasonable manner and
will not use, sell or offer to sell, pledge or encumber, process,
destroy or consume the Collateral. Steel further covenants and
agrees that the Collateral shall be maintained solely at (i) the
Lower Lakes Docks or (ii) the locations identified in Section 14 of
this Agreement and Steel will not transfer or permit Collateral to
be located at any other location without providing Cliffs with at
least thirty (30) days prior written notice of any new location for
the Collateral.
(v) The parties hereto acknowledge and agree that in the event of a
default hereunder by Steel, Cliffs will have all the rights and
remedies afforded a secured party under the Uniform Commercial Code
as adopted in the State of Ohio with respect to the Collateral.
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CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
SECTION 9. - SHIPMENTS.
Shipments of Cliffs Pellets shall be in approximately equal amounts over
the nine month period of April through December each year during the term of
this Agreement to ensure an adequate amount of inventory to allow a working
pellet pile at the Lower Lakes Docks.
SECTION 10. - WEIGHTS.
(a). Except as set forth in Section 10(b) below, vessel xxxx of lading
weight determined by certified railroad scale weights, certified belt scale
weights, or certified bin scale weights in accordance with the procedures in
effect from time to time at each of the loading ports shall be accepted by the
parties as finally determining the amount of Cliffs Pellets delivered to Steel
pursuant to this Agreement.
(b). Steel shall have the right to have a draft survey performed on
vessels by an independent third party contractor at the loading port (where the
pellets are first loaded into a vessel for shipment) at Steel's expense and
Steel shall afford Cliffs an opportunity to have a representative present by
providing Cliffs a minimum of two days' notice prior to having any draft survey
performed. If the vessel xxxx of lading weight is more than [****] higher or
more than [****] lower than the draft survey weight, then the draft survey
weight shall be the weight used in calculating the value of the cargo. In the
event that the variance is greater than [****] , Cliffs and Steel will
investigate and remedy the cause of the variance.
SECTION 11. - EMPLOYMENT OF VESSELS.
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Cliffs assumes the obligation for arranging and providing appropriate
vessels for the transportation of the Cliffs Pellets delivered by Cliffs to
Steel hereunder.
SECTION 12. - WARRANTIES.
THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, WHICH EXTEND BEYOND THE
PROVISIONS OF THIS AGREEMENT, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR INTENDED PURPOSE. All notices for substantial variance in
specifications of the Cliffs Pellets from the specifications and analysis limits
described in Exhibit 1 shall be given in writing delivered to Cliffs within
sixty (60) calendar days after completion of discharge of the Cliffs Pellets at
the lower lakes docks, or any claim arising from any substantial variance shall
be deemed waived by Steel. Each party shall afford the other party prompt and
reasonable opportunity to inspect the Cliffs Pellets as to which any notice is
given as above stated. No claim will be entertained after the Cliffs Pellets
have been consumed. The Cliffs Pellets shall not be returned to Cliffs without
prior written consent of Cliffs. In no event shall Cliffs be liable for Steel's
cost of processing, lost profits, injury to good will or any other special or
consequential damages.
SECTION 13. - FORCE MAJEURE.
No party hereto shall be liable for damages resulting from failure to
produce, deliver or accept all or any of the Cliffs Pellets as described herein,
if and to the extent that such production, delivery or acceptance would be
contrary to or would constitute a violation of any regulation, order or
requirement of a recognized
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governmental body or agency, or if such failure is caused by or results directly
or indirectly from acts of God, war, insurrections, interference by foreign
powers, strikes, labor disputes, fires, floods, embargoes, accidents, acts of
terrorism, or uncontrollable delays at the mines or either steel plant, on the
railroads, docks or in transit, shortage of transportation facilities, disasters
of navigation, or other causes, similar or dissimilar, that are beyond the
control of the party charged with a failure to deliver or to accept the Cliffs
Pellets. A party claiming a force majeure shall give the other party prompt
notice of the force majeure, including the particulars thereof and, insofar as
known, the probable extent and duration of the force majeure. To the extent a
force majeure is claimed hereunder by a party hereto, such shall relieve the
other party from fulfilling its corresponding agreement hereunder to the party
claiming such force majeure, but only for the period affected by and to the
extent of the claimed force majeure, unless otherwise mutually agreed to by the
parties. The party that is subject to a force majeure shall use commercially
reasonable efforts to cure or remove the force majeure event as promptly as
possible to resume performance of its obligations under this Agreement.
SECTION 14. - NOTICES.
All notices, consents, reports and other documents authorized and required
to be given pursuant to this Agreement shall be given in writing and either
personally served on an officer of the parties hereto to whom it is given or
mailed, postage prepaid, or sent by telegram or facsimile addressed as follows:
If to Cliffs:
0000 Xxxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
ISG WEIRTON AMD PELLET SALE
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Attention: Secretary
cc: General Manager - Sales & Traffic
Facsimile: (000) 000-0000
If to Steel:
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Vice President, Finance
and Administration
Facsimile: (000) 000-0000
With a copy to ISG Weirton:
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Controller
Facsimile: (000) 000-0000
provided, however, that any party may change the address to which notices or
other communications to it shall be sent by giving to the other party written
notice of such change, in which case notices and other communications to the
party giving the notice of the change of address shall not be deemed to have
been sufficiently given or delivered unless addressed to it at the new address
as stated in said notice.
SECTION 15. - TERM.
(a). The term of this Agreement shall commence as of the date hereof and
continue through December 31, 2018. Unless either party has given written notice
of termination to the other party by December 31, 2017 (twelve months prior to
termination), this Agreement shall continue on an annual basis after December
31, 2018 (original termination year) subject to subsequent termination by either
party upon not less than twelve months' prior written notification to the other
party, in which case the Agreement shall terminate at the end of the next
succeeding year.
ISG WEIRTON AMD PELLET SALE
19
(b). This Agreement shall remain valid and fully enforceable for the
fulfillment of obligations incurred prior to termination.
SECTION 16. - AMENDMENT.
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
SECTION 17. - MERGER, TRANSFER AND ASSIGNMENT.
(a). Steel shall not merge, consolidate or reorganize with any person,
partnership, corporation or other entity unless the surviving or resulting
person, partnership, corporation or other entity assumes in writing all of
Steel's obligations under this Agreement. Any obligations required to be assumed
by a surviving or resulting person, partnership, corporation or entity in
accordance with this Section 17(a) shall be limited to the Steel obligations
under this Agreement, and this Section 17(a) is not intended (i) to impose and
shall not be deemed to impose upon any such surviving or resulting person,
partnership, corporation or entity, including Steel, any obligation with respect
to any pellet requirements it may have for any facility or facilities it owns or
operates other than the Weirton Works, nor (ii) to allow the surviving or
resulting person, partnership, corporation or other entity to substitute any
other pellet tonnage available from any other pellet purchase or pellet equity
commitment of such surviving or resulting person, partnership, corporation or
other entity in order to satisfy the assumed obligations under this Agreement
for the Weirton Works.
(b). Steel shall not sell or transfer all or any of the blast furnace
operations at the Weirton Works to any other person, partnership, corporation,
ISG WEIRTON AMD PELLET SALE
20
joint venture or other entity ("Transferee") unless the Transferee assumes in
writing all of Steel's obligations under this Agreement, as such obligations
relate to the Weirton Works being sold or transferred. Any obligations required
to be assumed by a Transferee in accordance with this Section 17(b) shall be
limited to the Steel obligations under this Agreement relating to the particular
facility or facilities sold or transferred. This Section 17(b) is not intended
(i) to impose and shall not be deemed to impose upon any such Transferee any
obligation with respect to any pellet requirements such Transferee may have for
any facility or facilities such Transferee owns or operates other than the
Weirton Works, nor (ii) to allow such Transferee to substitute any other pellet
tonnage available from any other pellet purchase or pellet equity commitment of
such Transferee in order to satisfy the assumed obligations under this
Agreement.
(c). Steel shall not assign its rights or delegate its obligations under
this Agreement except as provided in Section 17(a) or 17(b).
(d). Cliffs shall not merge, consolidate or reorganize with any person,
partnership, corporation or other entity unless the surviving or resulting
person, partnership, corporation or other entity assumes in writing all of
Cliffs' obligations under this Agreement. Cliffs shall not sell or transfer all
or substantially all of its iron ore business to any other person, partnership,
corporation, joint venture or other entity ("Cliffs Transferee") unless the
Cliffs Transferee assumes in writing all of Cliffs' obligations under this
Agreement.
(e). Cliffs shall not assign its rights or delegate its obligations under
this Agreement except as provided in Section 17(d).
ISG WEIRTON AMD PELLET SALE
21
(f). All the covenants, stipulations and agreements herein contained
shall inure to the benefit of and bind the parties hereto and their respective
successors, transferees and permitted assigns, and any of the latter's
subsequent successors, transferees and permitted assigns.
SECTION 18. - WAIVER.
No waiver of any of the terms of this Agreement shall be valid unless in
writing. No waiver or any breach of any provision hereof or default under any
provisions hereof shall be deemed a waiver of any subsequent breach or default
of any kind whatsoever.
SECTION 19. - CONFIDENTIALITY.
(a). Cliffs and Steel acknowledge that this Agreement contains certain
pricing, adjustment and term provisions which are confidential, proprietary or
of a sensitive commercial nature and which would put Cliffs or Steel at a
competitive disadvantage if disclosed to the public, including without
limitation, Section 3, Section 5, Section 6 and all of the Schedules, Appendices
and Exhibits hereto ("Confidential Information"). Cliffs and Steel agree that
all provisions of this Agreement shall be kept confidential and, without the
prior written consent of the other party, shall not be disclosed to any party
not a party to this Agreement except as required by law or governmental or
judicial order and except that disclosure of the existence of this Agreement
shall not be precluded by this Section 19.
(b). If either party is required by law or governmental or judicial order
or receives legal process or court or agency directive requesting or requiring
ISG WEIRTON AMD PELLET SALE
22
disclosure of any of the Confidential Information contained in this Agreement,
such party will promptly notify the other party prior to disclosure to permit
such party to seek a protective order or take other appropriate action to
preserve the confidentiality of such Confidential Information. If either party
determines to file this Agreement with the Securities and Exchange Commission
("Commission") or any other federal, state or local governmental or regulatory
authority, or with any stock exchange or similar body, such determining party
will use its best efforts to obtain confidential treatment of such Confidential
Information pursuant to any applicable rule, regulation or procedure of the
Commission and any applicable rule, regulation or procedure relating to
confidential filings made with any such other authority or exchange. If the
Commission (or any such other authority or exchange) denies such party's request
for confidential treatment of such Confidential Information, such party will use
its best efforts to obtain confidential treatment of the portions thereof that
the other party designates. Each party will allow the other party to participate
in seeking to obtain such confidential treatment for Confidential Information.
SECTION 20. - GOVERNING LAW.
This Agreement shall in all respects, including matters of construction,
validity and performance, be governed by and be construed in accordance with the
laws of the State of Ohio.
SECTION 21. - REPRESENTATIONS AND WARRANTIES.
(a). Steel represents and warrants to Cliffs that (i) the execution and
delivery of this Agreement by Steel and the performance of its obligations
ISG WEIRTON AMD PELLET SALE
23
hereunder have been duly authorized by all requisite corporate action, (ii)
neither the execution and delivery of this Agreement, nor the performance of its
obligations hereunder by Steel shall, or after the lapse of time or giving of
notice shall, conflict with, violate or result in a breach of, or constitute a
default under the certificate of incorporation or bylaws of Steel or any law,
statute, rule or regulation applicable to it, or conflict with, violate or
result in a breach of or constitute a default under the material agreement to
which it is a party or by which it or any of its properties is bound, or any
judgment, order, award or decree to which Steel is a party or by which it is
bound, or require any approval, consent, authorization or other action by any
court, governmental authority or regulatory body or any creditor of Steel or any
other person or entity, and (iii) this Agreement constitutes a valid and binding
obligation of Steel and is enforceable against Steel in accordance with its
terms.
(b). Cliffs represents and warrants to Steel that: (i) the execution and
delivery of this Agreement by Cliffs and the performance of its obligations
hereunder have been duly authorized by all requisite corporate actions, (ii)
neither the execution and delivery of this Agreement nor the performance of its
obligations hereunder by Cliffs shall, or after the lapse of time or giving of
notice shall, conflict with, violate or result in a breach of, or constitute a
default under the certificate of incorporation or bylaws of Cliffs or any law,
statute, rule or regulation applicable to it, or conflict with, violate or
result in the breach of or constitute a default under any material agreement to
which it is a party or by which it or any of its properties is bound, or any
judgment, order, award or decree to which Cliffs is a party or by
ISG WEIRTON AMD PELLET SALE
24
which it is bound, or require any approval, consent, authorization or other
action by any court, governmental authority or regulatory body or any creditor
of Cliffs or any other person or entity, and (iii) this Agreement constitutes a
valid and binding obligation of Cliffs and is enforceable against Cliffs in
accordance with its terms.
SECTION 22. - COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
SECTION 23. - ARBITRATION.
(a). Upon notice by either party to the other, all disputes, claims,
questions or disagreements arising out or relating to this Agreement or breach,
termination, enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this Agreement to arbitrate,
shall be determined by arbitration administered by the American Arbitration
Association in accordance with the provisions of its Commercial Arbitration
Rules, modified as follows:
(i) The place of arbitration shall be Cleveland, Ohio;
(ii) Unless the parties consent in writing to a lesser number, the
arbitration proceedings shall be conducted before a panel of three
neutral arbitrators, one to be appointed by Cliffs, one to be
appointed by Steel, and third to be selected by the two arbitrators.
None of the arbitrators shall be an employee, officer, director or
consultant of, or of a direct competitor of, Steel or Cliffs;
ISG WEIRTON AMD PELLET SALE
25
(iii) Either party may apply to the arbitrators seeking injunctive
relief until the arbitration award is rendered or the controversy is
otherwise resolved. Either party also may, without waiving any
remedy under this Agreement, seek from any court having jurisdiction
any interim or provisional relief that is necessary to protect the
rights or property of that party, pending the establishment of the
arbitral tribunal (or pending the arbitral tribunal's determination
of the merits of the controversy);
(iv) Consistent with the expedited nature of arbitration, each
party will, upon the written request of the other party, promptly
provide the other with copies of documents on which the producing
party may rely or otherwise which may be relevant in support of or
in opposition to any claim or defense; any dispute regarding
discovery, or the relevance or scope thereof, shall be determined by
the arbitrators, which determination shall be conclusive; and all
discovery shall be completed within 45 days following the
appointment of the arbitrators;
(v) In connection any arbitration arising out of this Agreement,
the arbitrators shall have no authority to alter, amend, or modify
any of the terms and conditions of this Agreement, and further, the
arbitrators may not enter any award that alters, amends or modifies
terms or conditions of this Agreement in any form or manner;
ISG WEIRTON AMD PELLET SALE
26
(vi) The award or decision shall be made within nine months of the
filing of the notice of intention to arbitrate, and the arbitrators
shall agree to comply with this schedule before accepting
appointment; provided, however, that this time limit may be extended
by written agreement signed by both parties or by the arbitrators,
if necessary; and
(vii) In connection with any arbitration related to this Agreement,
each party shall be responsible for its own costs and expenses, and
the parties will equally split the cost of conducting the
arbitration itself.
(b). The judgment of the arbitrators shall be final and binding on the
parties, and judgment upon the award rendered by the arbitrators may be entered
and enforced by any court of the United States or any state thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first written above.
THE CLEVELAND-CLIFFS IRON COMPANY INTERNATIONAL STEEL GROUP INC
________________________________ ________________________________
Vice President Vice President
CLIFFS MINING COMPANY ISG WEIRTON INC.
________________________________ ________________________________
Vice President Vice President
NORTHSHORE MINING COMPANY
ISG WEIRTON AMD PELLET SALE
27
________________________________
Vice President
CLIFFS SALES COMPANY
________________________________
Vice President
ISG WEIRTON AMD PELLET SALE
28
CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX 1
GLOSSARY
[TO BE FINALIZED ONCE PAGINATION IS COMPLETE]
2004 Base Prices................................................... 9
Agreement.......................................................... 1
Bankruptcy Case.................................................... 1
Cliffs Pellets..................................................... 3
Cliffs Transferee.................................................. 24
Cliffs............................................................. 1
Collateral......................................................... 16
Commission......................................................... 25
Cure Amount........................................................ 2
Hibbing Pellets.................................................... 2
Iron............................................................... 1
ISG Weirton........................................................ 1
ISG................................................................ 1
Lower Lakes Docks.................................................. 8
Mining............................................................. 1
net ton............................................................ 4
Northshore Pellets................................................. 2
Northshore......................................................... 1
Original Contract.................................................. 1
Pellets............................................................ 4
PMSI Termination................................................... 17
PMSI .............................................................. 16
[****] ............................................................ 10
[****] ............................................................ 9
Quarterly Price Adjustment......................................... 14
Sales.............................................................. 1
[****] ............................................................ 11
ISG WEIRTON AMD PELLET SALE
Steel.............................................................. 1
Steel's Annual Pellet Tonnage Requirements......................... 3
Xxxxxx Pellets..................................................... 2
ton................................................................ 4
Transferee......................................................... 23
Utac Pellets....................................................... 3
Weirton Works...................................................... 3
Weirton............................................................ 1
year............................................................... 4
CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT INDEX
1 Typical Specifications and Analysis Limits
2A Pellet Ore Balance - 2004
2B Pellet Ore Balance - 2005
3 Pellet Price Calculation
4 [****]
5 [****]
ISG WEIRTON AMD PELLET SALE
CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSION.
EXHIBIT 1
CLEVELAND-CLIFFS INC. PELLET TYPICAL ANALYSIS
AS LOADED TO VESSEL FOR SHIPMENT
XXXXXX NORTHSHORE
------------------------ --------------------------------
Report [****] [****]
Frequency Typical [****] [****] Typical [****] [****]
-------------------------------------------------------------------------
MOISTURE V [****] [****]
------ ------
A. DRY CHEMICAL ANALYSIS
Total Iron V [****] [****]
------ ------
SiO2 V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
AI2O3 V [****] [****]
------ ------
CaO V [****] [****]
------ ------
MgO V [****] [****]
------ ------
Mn V [****] [****]
------ ------
Phos V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
S SA [****] [****]
------ ------
TiO2 SA [****] [****]
------ ------
Na2O M [****] [****]
------ ------
K2O M [****] [****]
------ ------
B. SIZING, WT. %
% + 1/2" V [****] [****]
------ ------
% - 1/2" x + 3/8" V [****] [****]
------ ------
% - 3/8" x + 1/4" V [****] [****]
------ ------
% - 1/4" V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
C. TUMBLE TEST
% + 1/4" before tumble V [****] [****]
------ ------
% + 1/4" after tumble V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
Q Index V [****] [****]
------ ------
Tumble Index - 28 mesh V [****] [****]
------ ------
D. COMPRESSION TEST
Minus 1/2" by plus 7/16"
Minus 1/2" by plus 3/8" SA [****] V [****]
------ ------
HIBBING UNITED
---------------------------- -----------------------------
Report [****] [****]
Frequency Typical [****] [****] Typical [****] [****]
-------------------------------------------------------------------------
MOISTURE V [****] [****]
------ ------
A. DRY CHEMICAL ANALYSIS
Total Iron V [****] [****]
------ ------
SiO2 V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
AI2O3 V [****] [****]
------ ------
CaO V [****] [****]
------ ------
MgO V [****] [****]
------ ------
Mn V [****] [****]
------ ------
Phos V SA [****] SA [****]
------ ------
S SA [****] [****]
------ ------
TiO2 SA [****] [****]
------ ------
Na2O M [****] [****]
------ ------
K2O M [****] [****]
------ ------
B. SIZING, WT. %
% + 1/2" V [****] [****]
------ ------
% - 1/2" x + 3/8" V [****] [****]
------ ------
% - 3/8" x + 1/4" V [****] [****]
------ ------
% - 1/4" V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
C. TUMBLE TEST
% + 1/4" before tumble V [****] [****]
------ ------
% + 1/4" after tumble V [****] [****] [****] [****] [****] [****]
------ ------ ------ ------ ------ ------
Q Index V [****] [****]
------ ------
Tumble Index - 28 mesh V [****] [****]
------ ------
D. COMPRESSION TEST
Minus 1/2" by plus 7/16" V [****] V [****]
------ ------
Minus 1/2" by plus 3/8" SA
TYPICAL ANALYSIS - 2004 EXPECTED AVERAGE CARGO ANALYSIS
[****] - [****]
LETTER "V" DENOTES - ANALYSIS TO BE PROVIDED ON EACH VESSEL SHIPMENT
OF PELLETS
LETTER "SA" DENOTES - ANALYSIS TO BE DONE ON A COMPOSITE SAMPLE OF
SEMI-ANNUAL VESSEL SHIPMENTS
LETTER "M" DENOTES - ANALYSIS TO BE DONE ON A RANDOM MONTHLY CARGO
EXHIBIT 2A
ISG - WEIRTON INC
PELLET ORE BALANCE
YEAR 2004
DAYS IN PERIOD 31 29 31 30 31 30 31 31 30 31 30 31 366
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR
--- --- --- --- --- --- --- --- --- --- --- --- ----
HOT METAL PRODUCTION - NTPD
Weirton
------------------------------------------------------------------------------------------
G.T. Ore/NTHM-Weirton
==========================================================================================
(Iron Ore in Thousand Gross Tons)
BEGINNING INVENTORY - G.T.
Weirton
Ashtablua Dock
Cleveland Bulk Terminal
-------------------------------------------------------------------------------------
TOTAL BEGINNING INVENTORY - - - - - - - - - - - -
PELLET SHIPMENTS - UL
Ashtablua Dock -
Cleveland Bulk Terminal -
------------------------------------------------------------------------------------------
TOTAL SHIPMENTS - - - - - - - - - - - - -
PELLET SHIPMENTS - LL
Ashtablua Dock -
Cleveland Bulk Terminal -
------------------------------------------------------------------------------------------
TOTAL SHIPMENTS - - - - - - - - - - - - -
CONSUMPTION -G.T.
TOTAL CONSUMPTION
------------------------------------------------------------------------------------------
ENDING INVENTORY - G.T.
Weirton
Ashtablua Dock
Cleveland Bulk Terminal
-------------------------------------------------------------------------------------
TOTAL ENDING INVENTORY - - - - - - - - - - - -
DAYS SUPPLY IN LOWER LAKE INVENTORY
Weirton
CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 3
PRICE ADJUSTMENT FORMULA
TILDEN, HIBBING, NORTHSHORE, AND UNITED PELLETS
FOR YEARS 2005 THROUGH 2018
[****]
[****]
(1) Current Year's [****] - Preceding Year's [****] X [****] = A
Preceding Year's [****]
(2) Current Year's [****] - Preceding Year's [****] X [****] = B
Preceding Year's [****]
(3)(4) {(A+B) X [****] X Preceding Year's Adjusted = Current Year's Price Adjustment Per Iron Unit
Price Per Iron Unit
CURRENT YEAR'S ADJUSTED PRICE PER IRON UNIT
(5) Current Year's Price Adjustment + Preceding Year's Adjusted = Current Year's Adjusted Price Per Iron Unit
Per Iron Unit Price Per Iron Unit
CURRENT YEAR'S ESTIMATED PELLET PRICE PER TON
(6) Current Year's Adjusted X Current Year's Expected Natural = Current Year's Estimated Pellet Price Per Ton
Price Per Iron Unit Iron Content
CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 4
[* * * *] FORMULA
TILDEN, HIBBING, NORTHSHORE, AND UNITED PELLETS
FOR THE YEARS 2004 THROUGH 2018
EXAMPLE 1 EXAMPLE 2 EXAMPLE 3 EXAMPLE 4 EXAMPLE 5 EXAMPLE 6
---------- ---------- --------- --------- ----------- ----------
[****]
---------- ---------- --------- --------- ----------- ----------
---------- ---------- --------- --------- ----------- ----------
---------- ---------- --------- --------- ----------- ----------
---------- ---------- --------- --------- ----------- ----------
[****] [****] [****] [****] [****] [****]
CONFIDENTIAL MATERIAL HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 5
SUBSTITUTE [* * * *] EXAMPLE
[* * * *]
FOR YEARS 2004 THROUGH 2018
Contract [****]
Contract [****]
In The Event That [****] Annual Total [****] Are Less Than [****], Then Steel
And Cliffs Agree To Substitute Another[****] [****] - Substitute [****]
DETERMINE SUBSTITUTE [****]
(1) Current Year's Actual Average [****] of Substituted [****] - Prior Year's [****] = A
(2) A +[****] = [****]
(3) A + [****] = [****]
RESULTS FROM (2) AND (3) ABOVE DETERMINE SUBSTITUTE [****]
