Exhibit 10.10
CONFIDENTIAL
AMENDED AND RESTATED PELLET SALE AND PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement"), is entered into as of October 14, 2004 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", and together with Iron, Mining, Northshore and Sales, "Cliffs"), and
WCI STEEL, INC., an Ohio corporation ("WCI").
RECITALS
WHEREAS, Cliffs and WCI are parties to that certain Pellet Sale and
Purchase Agreement dated January 1, 1999, as amended, (the "Original Contract"),
pursuant to which Cliffs provided WCI with iron ore pellets in connection with
WCI's steel manufacturing and processing activities;
WHEREAS, on September 16, 2003, WCI filed for protection under Chapter 11
of the United States Bankruptcy Code in the bankruptcy case styled In re: WCI
Steel, Inc., et al., case number 03-44662 (the "Bankruptcy Case") in the United
States Bankruptcy Court for the Northern District of Ohio, Eastern Division (the
"Bankruptcy Court");
WHEREAS, Cliffs and Cleveland-Cliffs Inc have asserted a claim for WCI's
alleged default under the Original Contract in the amount of $5,801,612.55 (the
"Cure Amount");
WHEREAS, in order to secure the consent of Cliffs to the assumption by WCI
of the Original Contract, Cliffs and WCI have agreed to the terms and conditions
set forth herein
by which the Cure Amount would be paid to Cliffs and the Original Contract would
be amended and restated; and
WHEREAS, Cliffs desires to continue to sell to WCI and WCI desires to
continue to purchase from Cliffs certain quantities (based on estimates of WCI's
requirements provided by WCI) of grades of iron ore standard pellets and iron
ore flux pellets as follows: (i) such grades of iron ore standard pellets
produced at the Northshore Mining Company iron ore pellet plant ("Northshore
Pellets"), located in Silver Bay, Minnesota; (ii) such grades of iron ore
standard pellets produced at the Hibbing Taconite Company Joint Venture iron ore
pellet plant ("Hibbing Pellets"), located in Hibbing, Minnesota; (iii) such
grades of iron ore flux pellets produced at the Xxxxxx Mining Company, L.C. iron
ore pellet plant ("Xxxxxx Pellets"), located in Xxxxxx, Michigan; (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 (v)
such other pellet grades as may be mutually agreed to by the parties hereto
(such Northshore Pellets, Hibbing Pellets, Xxxxxx Pellets, UTAC Pellets and
other mutually agreed upon pellets collectively being referred to herein as
"Cliffs Pellets"), all upon the terms and subject to the conditions contained
herein;
WHEREAS, WCI has informed Cliffs that WCI expects its annual requirements
for pellets during the term of this Agreement may be up to [*****](1) million
tons and Cliffs has informed WCI that, for the years 2006 and thereafter during
the term of this Agreement, Cliffs expects to be able to provide to WCI 100% of
WCI's pellet requirements (up to [*****]
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(1) CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
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million tons) provided Cliffs timely completes the planned expansions of its
production capacity.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, Cliffs and WCI agree as follows:
SECTION 1 - DEFINITIONS.
The terms quoted in the above parentheses of the first introductory
paragraph of this Agreement and the WHEREAS clauses, and other terms quoted
throughout the Agreement shall have the meanings assigned to them for purposes
of this Agreement. The term "year" or "years" as used herein shall mean a year
commencing January 1 and ending December 31. Attached as Appendix I to this
Agreement is a locator list of defined terms used throughout the Agreement.
SECTION 2 - SALE AND PURCHASE.
Cliffs shall sell and by these presents does sell and shall deliver to WCI
the tonnages and grades of Cliffs Pellets upon the terms and subject to the
conditions as hereinafter provided. WCI shall purchase and by these presents
does purchase and shall receive and pay for such tonnages and grades of Cliffs
Pellets upon the terms and subject to the conditions hereinafter provided.
SECTION 3 - TONNAGE.
During each of the years 2005 through 2014, and each year thereafter as
long as this Agreement remains in effect, Cliffs shall sell and deliver to WCI
and WCI shall purchase and receive from Cliffs and pay for a tonnage of Cliffs
Pellets, which tonnage shall for the
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year 2005 only, be equal to [*****] million tons (the "2005 Cap") and (b) for
each year thereafter shall be equal to the lesser of (i) WCI's annual iron ore
pellet tonnage required for consumption by WCI in each such year or (ii) [*****]
million tons (the "Annual Cap" and collectively with the 2005 Cap, the "Caps").
(The word "ton", as used herein, shall mean a gross ton of 2,240 pounds
avoirdupois natural weight). Cliffs shall use all reasonable commercial efforts
to assist WCI in procuring any amount of WCI's annual iron ore pellet tonnage
required for consumption by WCI in any given year in excess of the Caps, but
shall have no obligation to sell any additional tonnage beyond the Caps, nor
will Cliffs be limited in the price charged to WCI for such additional amounts.
The Cliffs Pellets shall consist of the grades and specifications and shall
have approximately the same general average chemical and physical structure, all
as described in Exhibit 1 attached hereto, unless otherwise mutually agreed.
SECTION 4 - GRADES AND QUALITY.
The Cliffs Pellets shall consist of the grades and specifications and shall
have approximately the same general average chemical and physical structure, all
as described in Exhibit I attached hereto, unless otherwise mutually agreed.
SECTION 5 - NOTIFICATION AND NOMINATION/EXCESS TONNAGE REQUIREMENTS.
(a) With respect to the tonnage of Cliffs Pellets to be purchased by WCI
for each of the years 2006 through 2014, on or before December 1 of each of the
years prior thereto (e.g., December 1, 2005 for the 2006 year) WCI shall notify
Cliffs in writing of WCI's
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preliminary annual iron ore pellet tonnage requirements for such year (the
"Annual Nomination").
(b)(i) With respect to each Annual Nomination for each year after 2005, on
or before June 1 of the then current year of the purchase and sale, WCI may, by
written notification to Cliffs, adjust its Annual Nomination for the then
current year by not more than [*****] down or [*****] up. If, by June 1 of the
then current year (e.g. June 1, 2006 for the 2006 year), WCI shall have adjusted
its Annual Nomination, either up or down, then such adjusted Annual Nomination
shall be deemed WCI's final annual iron ore pellet tonnage requirements
nomination for such year (a "Final Nomination"), and WCI shall be obligated to
purchase and Cliffs shall be obligated to sell such tonnage of Cliffs Pellets in
accordance with such Final Nomination.
If, however, WCI has not adjusted its Annual Nomination for years after
2005 as provided for above, then on or before September 1 of the then current
year of the purchase and sale, WCI may, by written notification to Cliffs,
adjust its Annual Nomination for the current year, as made under Section 5(a),
by not more than [*****] down or [*****] up. If, by September 1 of the then
current year, WCI shall have adjusted its Annual Nomination, either up or down,
then such adjusted Annual Nomination shall be deemed to be WCI's Final
Nomination for such year, and WCI shall be obligated to purchase and Cliffs
shall be obligated to sell such tonnage of Cliffs Pellets in accordance with
such Final Nomination.
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If no adjustment is made on or before September 1 of the then current year
of the purchase and sale, then the Annual Nomination for such year, as made
under Section 5(a), shall be deemed to be WCI's Final Nomination for such year,
and WCI shall be obligated to purchase and Cliffs shall be obligated to sell
such tonnage of Cliffs Pellets in accordance with such Annual Nomination.
(ii) In order to provide Cliffs with the necessary information to plan for
the production of Cliffs Pellets, between February 1 and March 31 of the then
current year after 2005, WCI shall notify Cliffs of WCI's current estimate of
WCI's annual iron ore pellet tonnage requirements for such year.
(iii) In order to provide Cliffs with the necessary information to plan
shipments of Cliffs Pellets, on April 15 of the then current year, WCI shall
provide Cliffs with a monthly shipping schedule for the then current year's
shipping season (the "Shipping Schedule"). Thereafter, WCI shall provide an
updated Shipping Schedule on the fifteenth day of each month through December 15
of the then current year.
(iv) Notwithstanding the foregoing, nothing contained in this Section 5
shall permit WCI to adjust its Annual Nomination in any manner which would
result in the Final Nomination exceeding the 2005 Cap in 2005 or the Annual Cap
in any subsequent year.
(v) The Annual Nomination for the year 2005 is hereby fixed at [*****]
million tons and shall not be adjusted by WCI without the written consent of
Cliffs, which consent may be provided or withheld in Cliffs' sole discretion.
SECTION 6 - PRICE AND ADJUSTMENTS.
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(a) The prices and the price adjustments for all sales of Cliffs Pellets
made to WCI during 2004 shall continue to be governed by the terms and
conditions of Section 6 of the Original Contract notwithstanding the execution
and effectiveness of this Agreement; provided, however, that the provisions of
Section 9 of this Agreement shall apply to the sale of all Cliffs Pellets
occurring on and after the effective date of this Agreement.
(b) The 2004 price per iron unit for Cliffs Pellets, to be delivered by
Cliffs to vessels determined under Section 12 hereof at the Upper Lake Port (as
defined in Section 12 below) (the "2004 Base Price per Iron Unit") shall be as
follows: Northshore Pellets shall have a 2004 Base Price per Iron Unit of
[*****] (which at the expected natural iron content of 63.57% for Northshore
Pellets equals [*****] per ton); Hibbing Pellets shall have a 2004 Base Price
per Iron Unit of [*****] (which at the expected natural iron content of 64.50%
for Hibbing Pellets equals [*****] per ton); Xxxxxx Pellets shall have a 2004
Base Price per Iron Unit of [*****] (which at the expected natural iron content
of 60.58% for Xxxxxx Pellets equals [*****] per ton); and UTAC Pellets shall
have a 2004 Base Price per Iron Unit of [*****] (which at the expected natural
iron content of 64.22% for UTAC Pellets equals [*****] per ton). The 2004 Base
Price per Iron Unit for Cliffs Pellets shall be adjusted, up or down, in
accordance with the provisions of Section 6(c) below.
(c) In order to determine escalator element adjustments to the final price
for the years 2005 through 2014, and each year thereafter if the Agreement is
extended beyond 2014, as provided for under Section 16(c) below, the 2004 Base
Price per Iron Unit for Cliffs Pellets and each of the following respective
year's then adjusted final price per iron
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unit for Cliffs Pellets shall be adjusted, up or down, each year for the year in
determination, by an amount equal to the sum of items (1), (2), (3) and (4) as
calculated below:
(1) [*****] of the amount obtained by multiplying the preceding
year's final adjusted price per iron unit for Cliffs Pellets times the
decimal determined by:
(x) dividing the numerator, which is the amount by which the
arithmetical average of the Producer Price Index ("PPI") For
[*****] - Series ID: [*****] and the PPI for [*****] - Series ID:
[*****], both published by the United States Department of Labor
(collectively, the "Average PPI [*****]"), for the year in
determination changes (up or down) from the immediately preceding
year's Average PPI [*****];
(y) by the denominator, which is the immediately preceding
year's Average PPI [*****];
plus
(2) [*****] of the amount obtained by multiplying the preceding
year's final adjusted price per iron unit for Cliffs Pellets times the
decimal determined by:
(x) dividing the numerator, which is the amount by which the
arithmetical average of the per gross ton [*****] prices in U.S.
currency, as calculated from the per metric ton unit price
published in [*****], or in the event [*****] does not publish
such price, then as may
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be published in a comparable trade journal for such [*****]
prices, for the following merchants: [*****], for the year in
determination changes (up or down) from the arithmetical average
of the per gross ton [*****] prices of the above two merchant
sellers published in [*****] for the immediately preceding year;
(y) by the denominator, which is the arithmetical average of
the per gross ton [*****] prices of the above two merchant
sellers published in [*****] for the immediately preceding year;
plus
(3) [*****] of the amount obtained by multiplying the preceding
year's final adjusted price per iron unit for Cliffs Pellets times the
decimal determined by:
(x) dividing the numerator, which is the amount by which the
PPI - [*****] - Series ID: [*****] for the year in determination
changes (up or down) from the immediately preceding year's PPI -
[*****] - Series ID: [*****];
(y) by the denominator, which is the immediately preceding
year's PPI - [*****] - Series ID: [*****];
plus
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(4) [*****] of the amount obtained by multiplying the preceding
year's final adjusted price per iron unit for Cliffs Pellets times the
decimal determined by:
(x) dividing the numerator, which is the amount by which the
PPI - [*****] - Series ID: [*****] for the year in determination
changes (up or down) from the immediately preceding year's PPI -
[*****] - Series ID: [*****];
(y) by the denominator, which is the immediately preceding
year's PPI - [*****] - Series ID: [*****].
(d) On or about April 1 of each year in determination, Cliffs shall provide
WCI with the estimated final adjusted price per iron unit for the Cliffs Pellets
to be sold during such year. Notwithstanding the escalation provisions provided
above, in no event will the final adjusted price per iron ton for the Northshore
Pellets in the years [*****] and [*****] be (i) less than [*****] per gross ton
below the ECWPP (as defined in Section 6(g)(i) below) for each of the years
[*****] and [*****], or (ii) more than [*****] per gross ton higher than the
ECWPP, at an estimated iron content of 63.57% for each of the years [*****] and
[*****]. An adjustment to the Hibbing Pellets, Xxxxxx Pellets and UTAC Pellets
prices shall be made to maintain the same per ton pricing relationship as with
the 2004 Base Prices above.
(e)(i) The price for all tons sold by Cliffs to WCI shall be based on
actual natural iron content.
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(ii) All prices herein are f.o.b. Vessel, Upper Lake Port and stated in
U.S. dollar values.
(f) Attached as Exhibit 2A is an example of the escalator element
adjustment calculation applying the provisions of Section 6(c) hereof. Attached
as Exhibit 2B is an example of the comparison between final adjusted Northshore
price per ton and the ECWPP for each of the years 2005 and 2006.
(g)(i) If, at the end of 2008, (1) WCI's final adjusted price per iron unit
for Northshore Pellets exceeds [*****] of the per iron unit Eastern Canadian
Pellet Price ("ECWPP") in 2008, or (2) WCI's final adjusted price per iron unit
for Northshore Pellets is below [*****] of the per iron unit ECWPP in 2008, then
either WCI or Cliffs may give notice to the other party on or before March 1,
2009 requesting a price reopener. In the event that either WCI or Cliffs
exercises its right to request a price reopener under (1) or (2) above, then the
parties shall engage in good faith negotiations so as to establish a new price
per iron unit for Northshore Pellets. If WCI and Cliffs are unable to reach an
agreement on a mutually agreeable price by April 30, 2009, then either party may
submit the determination of a price per iron unit for Northshore Pellets for
determination by binding arbitration in accordance with the provisions of
Section 23 below. The parties acknowledge that the prices for Hibbing Pellets,
Xxxxxx Pellets, UTAC Pellets and such other pellets as may be mutually agreed to
by the parties are based on the price for Northshore Pellets and the prices for
Hibbing Pellets, Xxxxxx Pellets, UTAC Pellets and other agreed pellets shall be
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adjusted on a pro rata basis to reflect either the mutually agreed price for
Northshore Pellets, or the price for Northshore Pellets as determined by the
arbitrator.
(ii) If, at the end of 2012, (1) WCI's final adjusted price per iron unit
for Northshore Pellets exceeds [*****] of the per iron unit ECWPP in 2012, or
(2) WCI's final adjusted price per iron unit for Northshore Pellets is below
[*****] of the per iron unit ECWPP in 2012, then either WCI or Cliffs may give
notice to the other party on or before March 1, 2009 requesting a price
reopener. In the event that either WCI or Cliffs exercises its right to request
a price reopener under (1) or (2) above, then the parties shall engage in good
faith negotiations so as to establish a new price per iron unit for Northshore
Pellets. If WCI and Cliffs are unable to reach an agreement on a mutually
agreeable price by April 30, 2012, then either party may submit the
determination of a price per iron unit for Northshore Pellets for determination
by binding arbitration in accordance with the provisions of Section 23 below.
The parties acknowledge that the prices for Hibbing Pellets, Xxxxxx Pellets,
UTAC Pellets, and such other pellets as may be mutually agreed to by the parties
are based on the price for Northshore Pellets and the prices for Hibbing
Pellets, Xxxxxx Pellets, UTAC Pellets and other agreed pellets shall be adjusted
on a pro rata basis to reflect either the mutually agreed price for Northshore
Pellets, or the price for Northshore Pellets as determined by the arbitrator.
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SECTION 7 - PAYMENTS AND ADJUSTMENTS.
(a) The payment terms for all sales of Cliffs Pellets made to WCI during
2004, including all 2004 price adjustments, shall continued to be governed by
the terms and conditions of Section 7 of the Original Contract notwithstanding
the execution and effectiveness of this Agreement; provided, however, that the
provisions of Section 9 of this Agreement shall apply to the sale of all Cliffs
Pellets occurring on and after the effective date of this Agreement.
(b) WCI shall pay Cliffs all amounts due for the Cliffs Pellets purchased
under Section 5 by wire transfer of funds no later than [*****] days following
delivery of each such cargo of Cliffs Pellets into the vessel or following
delivery by loading of the Cliffs Pellets in rail cars or trucks, if applicable.
(c) 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 6(c) ("Quarterly Price Adjustment"). Cliffs shall calculate the
Quarterly Price Adjustment and provide WCI with such Quarterly Price Adjustment
by the 15th day following the end of each calendar quarter, or on such later
date as may be mutually agreed between Cliffs and WCI. Cliffs shall issue an
invoice or credit memo, as the case may be, to WCI concurrently with the
Quarterly Price Adjustment, and payment from Cliffs to WCI or WCI to Cliffs, as
the case may be, shall be made by the [*****] day following issuance of the
invoice or credit memo, as the case may be.
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(d) For years subsequent to year 2005, on or before May 15 each year, or on
such later date as may be fixed by mutual agreement of Cliffs and WCI, Cliffs
will furnish WCI with an invoice reflecting the final price adjustments for the
preceding year, if any, on the deliveries to WCI for the preceding year, and any
overpayment by WCI or balances due from WCI in connection with such year's
deliveries shall be promptly adjusted by cash payment by wire transfer of funds
between the parties within [*****] days of the invoice date.
(e) In the event WCI shall fail to make payment when due of all amounts,
including payment required pursuant to Section 24 below, 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 under this
Agreement until all claims Cliffs may have against WCI under this Agreement are
fully satisfied.
(f) All payments shall be made in U.S. dollars.
SECTION 8 - ANALYSES.
The Cliffs Pellets (or such other mutually agreed grades of iron ore
pellets) delivered hereunder will be sampled at the mine or port, in accordance
with the usual and customary practice, and analyzed by mine chemists, and said
analyses shall be final.
SECTION 9 - DELIVERY, STORAGE AND TRANSFER OF OWNERSHIP; GRANT OF SECURITY
INTEREST.
(a) Cliffs shall deliver to WCI the annual specified tonnage of Cliffs
Pellets, as provided for in Section 5 above to vessels at Upper Lake Port
designated by WCI in accordance with the provisions of Section 12 below.
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(b) Title, and all risk of loss, damage or destruction of Cliffs Pellets
shall transfer to WCI upon receipt of payment as provided for in Section 7(b).
WCI shall keep all of the Cliffs Pellets adequately insured in all material
respects against loss, damage and hazards at commercially reasonable levels for
businesses engaging in similar activities or lines of business or owning similar
assets. The insurance policies shall (i) be satisfactory in form and substance
to Cliffs, (ii) name Cliffs as loss payee or additional insured thereunder, as
applicable, with respect to the Cliffs Pellets and (iii) expressly provide that
they cannot be altered, amended, modified, canceled or terminated in a manner
adverse to the interest of Cliffs without thirty (30) calendar days' prior
written notice to Cliffs, and that they inure to the benefit of Cliffs,
notwithstanding any action or omission or negligence of or by WCI. WCI shall
furnish Cliffs not less frequently than annually a certificate of insurance
showing Cliffs as a loss payee as its interests may appear in all Cliffs Pellets
in which Cliffs shall have retained title and as an additional insured.
(c)(i) WCI acknowledges and agrees that it is the intent of the parties
that title to the Cliffs Pellets shall pass to WCI solely upon receipt of
payment by Cliffs in accordance with the terms of this Agreement. However, to
secure the payment and performance of all obligations of WCI due to Cliffs
pursuant to this Agreement and to preserve Cliffs' reservation of title to the
Cliffs Pellets until receipt of payment therefor, WCI hereby grants, pledges and
assigns to Cliffs a present security interest in all of WCI's right, title and
interest in and to the Cliffs Pellets, to the extent that WCI takes possession
of any Cliffs Pellets in any fashion prior to making payment as required under
Section 6(a) of this
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Agreement, as well as the proceeds of any of the Cliffs Pellets, including the
proceeds of any insurance related thereto (collectively, the "Collateral"). Such
security interest applicable to Cliffs Pellets furnished on and after the
effective date of this Agreement shall constitute a purchase money security
interest ("PMSI").
(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 WCI 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 WCI, or any of its affiliates, that is senior
to the security interest granted to Cliffs hereunder. Specifically, the PMSI
granted to Cliffs in the Collateral is permitted under, and is senior to, the
security interests and liens granted to Congress Financial Corporation in its
capacity as administrative agent for the financial institutions from time to
time parties to certain pre-petition and debtor-in-possession Loan Agreements,
including a certain Ratification Agreement dated as of September 17, 2003 (the
"Agent"), all as authorized by Final Order (A) Authorizing Debtors to Obtain
Post-Petition Financing and Granting Security Interests and Superpriority
Administrative Expense Status Pursuant to 11 U.S.C. Sections 105 and 364(c); (B)
Modifying the Automatic Stay Pursuant to 11 U.S.C. Section 362; and (C)
Authorizing Debtors to Enter Into Agreements With Congress Financial
Corporation, as Agent, entered in the Bankruptcy Case on October 29, 2003, and
will at all times be senior to any liens granted to
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or for the benefit of any lenders who succeed, or make loans to WCI to
refinance, such pre-petition and debtor-in-possession loans.
(iii) WCI hereby confirms that the exact legal name of WCI is as set forth
in the first introductory paragraph of this Agreement, that WCI is a corporation
organized under the laws of the State of Ohio, the Ohio charter number for WCI
is 722499, the federal tax identification number of WCI is 00-0000-000 and that
Appendix II attached hereto lists as of the date hereof (i) the locations of the
chief executive office of WCI and all other locations of Cliffs Pellets and all
books and records in connection therewith or in any way relating thereto, (ii)
identifies the common address and use of each such location, (iii) indicates
whether such location is owned or leased by WCI or whether WCI is entitled to
occupy or use such location by virtue of a license or easement, (iv) if such
location is leased, describes the parties to and date of such lease and the name
and current address of the landlord under the lease, (v) if such location is
owned, sets forth a complete and accurate legal description for such location
and (vi) if WCI occupies or uses such location by virtue of a license or
easement agreement, describes such license or easement agreement with reasonable
specificity. WCI represents that it enjoys peaceful and undisturbed possession
under all such leases, licenses and/or easements, and the same are valid and
subsisting and are in full force and effect.
(iv) WCI 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
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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 continuation statements. WCI 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.
(v) Prior to the applicable PMSI Termination Date, WCI will keep and
preserve the Collateral in a commercially reasonable manner and will not use,
sell or offer to sell, pledge or encumber (excluding, however, a grant of a
security interest in the Collateral to the Agent or its successor in accordance
with the provisions of Section 9(c)(2) above), process, destroy or consume the
Collateral. WCI further covenants and agrees that the Collateral shall be
maintained solely at one of the locations listed in Appendix II hereto, and WCI
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 different location for the Collateral.
(v) The parties hereto acknowledge and agree that in the event of a default
hereunder by WCI, 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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SECTION 10 - SHIPMENTS.
Shipments of Cliffs Pellets will be in approximately equal amounts over the
nine-month period of April through December each year during the term of this
Agreement, unless otherwise mutually agreed.
Section 11 - Weights.
Vessel xxxx of lading weight determined by certified railroad scale weights
or certified belt scale weights, in accordance with procedures in effect from
time to time at each of the loading ports, shall be accepted by the parties as
finally determining the amounts of the Cliffs Pellets delivered to WCI pursuant
to this Agreement.
SECTION 12 - EMPLOYMENT OF VESSELS.
WCI assumes the obligation for arranging and providing appropriate vessels
for the transportation of the Cliffs Pellets delivered by Cliffs to WCI at the
Upper Lake Port or shipped by WCI from the Upper Lake Port. WCI shall arrange
and provide for ore carrier or bulk carrier type vessels suitable in all
respects to enter, berth at and leave the Upper Lake Port and suitable for the
loading and mooring facilities at the Upper Lake Port. ("Upper Lake Port" as
used herein shall mean the LS&I Dock in Marquette, Michigan, the BNSF Alloueze
Dock in Superior, Wisconsin, the DM&IR Dock in Duluth, Minnesota, the Northshore
Mining Company Dock in Silver Bay, Minnesota, or one or more other Lake Superior
or Lake Michigan docks mutually acceptable to Cliffs and WCI.)
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SECTION 13 - 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 claims for substantial variance in quality of
the Cliffs Pellets shall be deemed waived unless made in writing delivered to
Cliffs within the later of thirty (30) calendar days after completion of
discharge at port of discharge or thirty (30) calendar days after Cliffs
supplies WCI the cargo analysis via facsimile. No claim will be entertained
after the Cliffs Pellets have been consumed. Each party shall afford the other
party prompt and reasonable opportunity to inspect the Cliffs Pellets as to
which any claim is timely made as above stated. The Cliffs Pellets shall not be
returned to Cliffs without prior written consent of Cliffs. In no event shall
Cliffs be liable for the cost of processing, permitted return, lost profits,
injury to good will or any other special or consequential damages.
SECTION 14 - FORCE MAJEURE.
No party hereto shall be liable for damages resulting from failure to
produce, deliver or accept and pay for 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 governmental body or agency, or
if such failure, including failure of the mines supplying the Cliffs Pellets to
be delivered under this Agreement to produce the Cliffs Pellets, is caused by or
results directly or indirectly from delays in completing the planned expansions
of Cliffs' production capacity
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(including, without limitation, delays in receiving necessary or appropriate
permits for such planned expansions), acts of God, war, insurrections,
interference by foreign powers, strikes, hindrances, labor disputes, labor
shortages, fires, floods, embargoes, accidents, acts of terrorism or
uncontrollable delays at the mines, steel plant, on the railroads or docks or in
transit, storage or transportation facilities, disasters of navigation, or other
causes, similar or dissimilar, if such other causes are beyond the control of
the party charged with the obligation to produce or deliver or to accept and pay
for the Cliffs Pellets. A party claiming a force majeure shall give the other
party prompt notice of the force majeure event, including the particulars
thereof and, insofar as known, the probable extent and duration of the force
majeure. To the extent a force majeure event is claimed hereunder by a party
hereto, such event shall relieve the other party from fulfilling its
corresponding agreement hereunder to the party claiming such force majeure
event, but only for the period and to the extent of the claimed force majeure
event, 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 15 - 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 by registered or certified mail, postage prepaid, or sent by telex,
telegram or facsimile addressed as follows:
Page 21 of 37
If to Cliffs:
Cliffs Sales Company
0000 Xxxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Secretary
Fax No. (000) 000-0000
cc: General Manager-Sales and Traffic
Fax No. (000) 000-0000
If to WCI:
WCI Steel, Inc.
0000 Xxxx Xxx., X.X.
Xxxxxx, Xxxx 00000-0000
Attention: Xxx Xxxxx
Fax No. (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 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 16 - TERM.
(a) This Agreement shall become effective only upon approval, on or before
November 16, 2004, by the Bankruptcy Court of (i) the Motion for an Order
Authorizing Debtor WCI Steel, Inc. to Assume and Modify the Pellet Sales
Agreement with Northshore Mining Company, Cleveland-Cliffs Iron Company, Cliffs
Mining Company and Cliffs Sales Company filed on July 14, 2004, as Docket No.
558 in the Bankruptcy Case, as the same may be supplemented or amended and (ii)
relief from the automatic stay permitting Cliffs to
Page 22 of 37
perfect the security interest granted under Section 9 above (the "Bankruptcy
Approval"). Following the effectiveness of this Agreement the Original Contract
shall terminate effective as of December 31, 2004 without any further action by
Cliffs or WCI and without any further notice.
(b) Notwithstanding the provisions of the foregoing Section 16(a), in the
event that: (i) WCI's Second Amended Plan of Reorganization (or such other
Chapter 11 Plan of Reorganization as is reasonably acceptable to Cliffs) has not
been confirmed by the Bankruptcy Court on or before June 30, 2005 and
substantially consummated by July 31, 2005, then unless Cliffs agrees otherwise
in writing, this Agreement shall be terminated without the need for any notice
or further action by Cliffs effective as of December 31, 2005, or (ii) in the
event that a plan other than WCI's Second Amended Plan of Reorganization (or
another plan of reorganization sponsored by WCI and The Renco Group, Inc.) is
confirmed and WCI's blast furnace is not operating and producing hot metal for
thirty (30) consecutive days (a "Work Stoppage Furnace Outage"), as a result of
a strike, lock out or other work stoppage, Cliffs shall have the right to
terminate this Agreement upon thirty (30) days written notice to WCI; such
notice shall be given within thirty (30) days after the 30th consecutive day of
the Work Stoppage Furnace Outage. Cliffs' right to terminate this Agreement
pursuant to Section 16(b)(ii) shall only apply to a Work Stoppage Furnace Outage
that commences within one (1) year of the effective date for a Chapter 11 plan
of reorganization for WCI which has been confirmed by the Bankruptcy Court and
that has been substantially consummated.
Page 23 of 37
(c) Except with respect to the provisions of Section 9, Section 16(a) and
(b) and Section 24 which shall take effect immediately upon the effectiveness of
this Agreement, the initial term of this Agreement shall commence on January 1,
2005, and continue through December 31, 2014, and shall continue annually each
year thereafter, unless with respect to each year after December 31, 2014,
either party gives to the other party one year's prior written notification that
this Agreement shall terminate at the end of the succeeding year.
(d) This Agreement shall remain valid and fully enforceable for the
fulfillment of obligations incurred prior to termination.
SECTION 17 - AMENDMENT.
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
SECTION 18 - ASSIGNMENTS.
(a) For purposes of this Agreement, the term "WCI" includes and means not
only WCI, but also any successor by merger or consolidation of WCI and any
permitted assigns of WCI.
(b) In case WCI shall consolidate with or merge into another corporation or
shall transfer to another person, partnership, corporation or other entity all
or substantially all of its iron and steel business, this Agreement shall be
assigned by WCI to, and shall be binding upon, the entity resulting from such
consolidation or merger or the person, partnership, corporation or other entity
to which such transfer is made; otherwise no
Page 24 of 37
assignment of this Agreement by WCI shall be valid unless Cliffs shall consent
in writing thereto.
(c) In case Cliffs or any permitted assigns of Cliffs shall consolidate
with or merge into another corporation or shall transfer to another person,
partnership, corporation or other entity all or substantially all of its iron
ore business, this Agreement shall be transferred to and shall be binding upon
the entity resulting from such consolidation or merger or the person,
partnership, corporation or other entity to which such transfer is made;
otherwise, no assignment of this Agreement by Cliffs shall be valid unless WCI
shall consent thereto in writing.
(d) All the covenants, stipulations and agreements herein contained shall
inure to the benefit of and bind the parties hereto and their respective
successors and permitted assigns.
SECTION 19 - WAIVER.
No waiver of any of the terms of this Agreement shall be valid unless in
writing. No waiver of 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 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.
Page 25 of 37
SECTION 21 - ORIGINAL AGREEMENT.
Except as expressly provided herein, effective with the date of approval
set forth in Section 16(a) above, the Original Contract and all obligations
thereunder shall be terminated.
SECTION 22 - CONFIDENTIALITY.
(a) Cliffs and WCI 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 WCI at a
competitive disadvantage if disclosed to the public, including without
limitation, Sections 3, 4, 5, 6 and 7 and all of the Schedules, Appendices and
Exhibits hereto (collectively, "Confidential Information"). Cliffs and WCI 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 22.
(b) If either party is required by law or governmental or judicial order or
receives legal process or a court or agency directive requesting or requiring
disclosure of any of the Confidential Information contained in or related to
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 (the "Commission") or any other federal,
state or local governmental
Page 26 of 37
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 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) Except as provided in Section 23(a)(viii) below or 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 WCI, and
Page 27 of 37
the third to be selected by such arbitrators. None of the arbitrators shall be
an employee, officer, director or consultant of, or of a direct competitor of,
WCI or Cliffs;
(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 with 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;
(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
Page 28 of 37
before accepting appointment; provided, however, that this time limit may be
extended by written agreement signed by both parties; 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.
(viii) In the event that WCI or Cliffs are unable to reach agreement on a
mutually agreeable price per iron unit for Northshore Pellets pursuant to
Section 6(g) above, then for purposes of this Section 23 such arbitration
proceedings shall be conducted before a single neutral arbitrator selected by
the mutual agreement of the parties. The arbitrator shall not be an employee,
officer, director or consultant of, or of a direct competitor of, WCI or Cliffs.
If the arbitration is pursuant to Section 6(g)(i), then the arbitrator shall be
restricted to determining a price per iron unit for Northshore Pellets that is
between [*****] and [*****] of the ECWPP in 2008 (the "2008 Adjustment Range").
If the arbitration is pursuant to Section 6(g)(ii), then the arbitrator shall be
restricted to determining a price per iron unit for Northshore Pellets that is
between [*****] and [*****] of the ECWPP in 2012 (the "2012 Adjustment Range").
An arbitration under this subsection (viii) shall be a "baseball" style
arbitration whereby WCI and Cliffs shall each propose a price per iron unit for
Northshore Pellets within the 2008 Adjustment Range if the arbitration is
pursuant to Section 6(g)(i), or within the 2012 Adjustment Range if the
arbitration is pursuant to Section 6(g)(ii). In the event that WCI and Cliffs
are unable to agree upon a single arbitrator, then the arbitrator shall be
selected by the President of the American Iron and Steel Institute.
Page 29 of 37
(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.
SECTION 24. - PAYMENT OF CURE AMOUNT.
WCI shall pay the Cure Amount in three equal annual installments of One
Million Nine Hundred Thirty-Three Thousand Eight Hundred Seventy-One Dollars
($1,933,871.00) together with interest on the unpaid portion of the Cure Amount
at the Prime Rate plus [*****] basis points. (The "Prime Rate" shall mean a
fluctuating interest rate equal at all times to the prime rate of interest as
published from time to time in the "Money Rates" section of The Wall Street
Journal, National Edition, or in the event that such rate shall not so appear,
in such other nationally recognized publication as Cliffs may, from time to
time, specify to WCI; any change in the Prime Rate due to a change in such
published rate shall be effective immediately on the effective date of such
change in such published rate.) The first installment payment of the Cure Amount
shall be made on the first anniversary of the Bankruptcy Approval with the
subsequent payments being made on the subsequent annual anniversaries thereof
until paid in full. WCI Steel shall have the option to pre-pay the Cure Amount
without premium or penalty, provided that interest shall be paid to the date of
such prepayment. Notwithstanding anything else in this Section 24, the full
unpaid balance of the Cure Amount (together with any unpaid interest thereon)
shall be due and payable by WCI to Cliffs upon the termination of this
Agreement, if such termination takes place prior to the full payment of the Cure
Amount and any interest thereon.
Page 30 of 37
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
herein provided.
THE CLEVELAND-CLIFFS IRON COMPANY WCI STEEL, INC.
------------------------------------- By:
Executive Vice President - Commercial ------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CLIFFS MINING COMPANY
-------------------------------------
Executive Vice President - Commercial
NORTHSHORE MINING COMPANY
-------------------------------------
Executive Vice President - Commercial
CLIFFS SALES COMPANY
-------------------------------------
Executive Vice President - Commercial
Page 31 of 37
APPENDIX I
LOCATOR LIST OF DEFINED TERMS USED THROUGHOUT AGREEMENT
TERM PAGE NO.
---- --------
2004 Base Price per Iron Unit........................................ 6
2005 Cap............................................................. 3
2008 Adjustment Range................................................ 27
2012 Adjustment Range................................................ 27
Agent................................................................ 15
Agreement............................................................ 1
Annual Cap........................................................... 4
Annual Nomination.................................................... 4
Average PPI Steel Series............................................. 7
Bankruptcy Court..................................................... 1
Bankruptcy Case...................................................... 1
Caps................................................................. 4
Cliffs............................................................... 1
Cliffs Pellets....................................................... 2
Collateral........................................................... 14
Commission........................................................... 24
Confidential Information............................................. 23
Cure Amount.......................................................... 1
ECWPP................................................................ 7
Final Nomination..................................................... 4
Hibbing Pellets...................................................... 2
Iron................................................................. 1
Mining............................................................... 1
Northshore........................................................... 1
Page 32 of 37
Northshore Pellets................................................... 2
Original Contract.................................................... 1
PMSI................................................................. 15
PMSI Termination Date................................................ 15
PPI.................................................................. 7
Prime Rate........................................................... 28
Quarterly Price Adjustment........................................... 12
Sales................................................................ 1
Shipping Schedule.................................................... 5
Xxxxxx Pellets....................................................... 2
ton.................................................................. 3
Upper Lake Port...................................................... 19
UTAC Pellets......................................................... 2
WCI.................................................................. 1
Work Stoppage Furnace Outage......................................... 23
Year................................................................. 3
Page 33 of 37
APPENDIX II
CHIEF EXECUTIVE XXXXXX
0000 Xxxx Xxxxxx, X.X.
Xxxxxx, Xxxx 00000-0000
LOCATIONS OF COLLATERAL
Xxxxxx Dock, Ashtabula, Ohio
Cleveland Bulk Terminal, Cleveland, Ohio
WCI Plant, Warren, Ohio
Page 34 of 37
CLEVELAND-CLIFFS INC PELLET TYPICAL ANALYSIS EXHIBIT 1
AS LOADED INTO VESSEL FOR SHIPMENT
Pellet Typicals
---------------------------------------------------------
Northshore Hibbing Tilden UTAC
Standard Standard Flux Partial Flux
----------- -------- ------ ------------
A. DRY CHEMICAL ANALYSIS
Total Iron 65.00 66.15 61.50 65.20
SiO2 4.80 4.50 4.90 5.30
Al2O3 0.40 0.20 0.53 0.10
CaO 0.85 0.30 4.40 0.86
MgO 0.55 0.31 1.70 0.35
Mn 0.20 0.08 0.10 0.12
Phos 0.022 0.011 0.035 0.016
B. SIZING, Wt. %
% + 1/2" 7.0 1.6 4.0 12.0
% - 1/2" x + 3/8" 81.4 91.0 84.6 78.0
% - 3/8" x + 1/4" 9.1 5.4 9.0 8.5
% - 1/4" 2.5 2.0 2.5 1.5
C. TUMBLE TEST
% + 1/4" before tumble 97.5 98.0 97.5 98.5
% + 1/4" after tumble 96.3 95.7 96.1 97.0
Q Index 93.9 93.8 93.7 95.5
Tumble Index - 28 mesh 3.0 3.9 2.7 1.9
D. COMPRESSION TEST
Minus 1/2" by plus 7/16" 491 640
Minus 1/2" by plus 3/8" 450 470
PELLET PRICE ADJUSTMENT FORMULA FOR YEARS 2005 THROUGH 2014
EXHIBIT 2 A
SECTION 6(c) CURRENT YEAR'S PRICE ADJUSTMENT CALCULATION
(1) Producer Price index (PPI) For [*****] - Series Id [*****] and Producer Price Index (PPI) For [*****] - Series Id [*****]
Current Year's Average PPI Series Id: [*****] and Series Id: [*****]-- Proceding Year's Average PPL Series Id: [*****]
and Series Id: [*****] = PPI Series id: [*****] and Series id: [*****] Change
Preceding Year's Average PPI Series Id: [*****] (decimal converted to a percentage)
and Series Id: [*****]
PPI Series Id: [*****] and Series Id: [*****] Change (decimal converted to a percentage) x [*****]% x Preceding Year's Adjusted
Price Per Iron L = A
(2) [*****]
Current Year's [*****]- Proceeding Year's [*****] = [*****] Percentage Change
Preceding Year's [*****] (decimal converted to a percentage)
[*****] Percentage Charge (decimal converted to a percentage) x [*****]% x Preceding Year's Adjusted Price Per Iron L = B
(3) Producer Price Index (PPI) [*****]-- Series [*****]
Current Year's PPI [*****] - Preceding Year's PPI [*****] = PPI [*****] Percentage Change
Preceding Year's PPI [*****]. (decimal converted to a percentage)
PPI [*****] Percentage Change (decimal converted to a percentage) x [*****]% x Preceding Year's Adjusted Price Per Iron L = C
(4) Producer Price Index (PPI) [*****] - Series [*****]
Current Year's PPI [*****] - Preceding Year's PPI [*****]. = PPI [*****] Percentage Change
Preceding Year's PPI [*****] (decimal converted to a percentage)
PPI [*****] Percentage Change (decimal converted to a percentage) x [*****]% x Preceding Year's Adjusted Price Per Iron L = D
CURRENT YEAR'S ADJUSTED PRICE PER IRON UNIT
PRECEDING YEAR'S ADJUSTED PRICE PER IRON UNIT + (A + B + C + D) = CURRENT YEAR'S ADJUSTED PRICE PER IRON UNIT
CURRENT YEAR'S ESTIMATED PELLET PRICE PER TON
CURRENT YEAR'S ADJUSTED PRICE PER IRON UNIT X CURRENT YEAR'S EXPECTED NATURAL IRON CONTENT = CURRENT YEAR'S ESTIMATED PELLET
PRICE PER TON
EXHIBIT 2B
ADJUSTED PELLET PRICE COMPARISON TO THE [*****]
YEARS 2005 AND 2006
Section 6(d) Current Year's Adjusted Pellet Price Comparison to the [*****]
(1) Compare Current Year's Adjusted [*****] Price Per Ton to [*****] Per Ton
Current Year's Adjusted [*****] Price Per iron Unit X 63.57% = Current Year's [*****] Price Per Ton = A
Current Year's [*****] Price Per iron Unit X 63.57% = Current Year's [*****] Price Per Ton = B
If (B - A) is greater than $[*****] Per Ton, then the following adjustments are
made to the Current Year's Estimated Pellet Prices Per Ton:
Northshore Estimated Pellet Price Per Ton A = B - $[*****]Per Ton
Hibbing Estimated Pellet Price Per Ton A + $[*****] Per Ton
Xxxxxx Hematite Flux A + $[*****] Per Ton
United Taconite Partial Flux A + $[*****] Per Ton
If (A - B) is greater than $[*****]Per Ton, then the following adjustments are
made to the Current Year's Estimated Pellet Prices Fer Ton:
Northshore Estimated Pellet Price Per Ton A = B + $[*****] Per Ton
Hibbing Estimated Pellet Price Per Ton A + $[*****] Per Ton
Xxxxxx Hematite Flux A + $[*****] Per Ton
United Taconite Partial Flux A + $[*****] Per Ton
