EXHIBIT 10.20
CONFIDENTIAL TREATMENT REQUESTED
UNDER C.F.R. SECTIONS
200.80(b)(4), 200.83 and 230.406
**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
THE OMMITTED MATERIAL HAS
BEEN FILED SEPARATELY WITH
THE COMMISSION
ROUNDS SUPPLY AGREEMENT
BY AND BETWEEN
REPUBLIC ENGINEERED PRODUCTS, INC.
AND
UNITED STATES STEEL CORPORATION
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS.................................................................... 2
1.1 General.................................................................. 2
1.2 Certain Defined Terms.................................................... 2
ARTICLE II - ROUNDS SALES.................................................................. 3
2.1 Quantities............................................................... 3
2.2 Prices................................................................... 3
2.3 Orders................................................................... 4
2.4 Payment.................................................................. 5
2.5 Delivery, Title and Risk of Loss......................................... 5
2.6 Terms and Conditions of Sale............................................. 6
2.7 Warranty................................................................. 6
2.8 Cross Default; Right of Set-off.......................................... 7
2.9 Mill Scale; Scrap........................................................ 8
ARTICLE III - TERM AND TERMINATION......................................................... 9
3.1 Term..................................................................... 9
3.2 Termination.............................................................. 10
ARTICLE IV - MISCELLANEOUS................................................................. 10
4.1 Payment Errors........................................................... 10
4.2 Dispute Resolution....................................................... 10
4.3 Audit.................................................................... 11
4.4 Confidentiality.......................................................... 11
4.5 Severability............................................................. 12
4.6 Rights and Remedies; No Consequential Damages............................ 13
4.7 Costs and Expenses....................................................... 13
4.8 Notices.................................................................. 13
4.9 Assignment............................................................... 13
4.10 Counterparts............................................................. 14
4.11 Entire Agreement......................................................... 14
4.12 Headings................................................................. 14
4.13 Governing Law............................................................ 14
4.14 No Third Party Rights.................................................... 14
4.15 Waiver and Amendments.................................................... 15
4.16 Force Majeure............................................................ 15
4.17 Release.................................................................. 15
SCHEDULE A: Prices
SCHEDULE A-1 Alloy Adjustment
SCHEDULE B: Seller's Standard Terms and Conditions of Sale
SCHEDULE C: Weight Calculation
SCHEDULE D: TQR-09-02-LC Specifications
ROUNDS SUPPLY AGREEMENT
THIS ROUNDS SUPPLY AGREEMENT ("Agreement") made and entered into on
October , 2004 (the "Effective Date"), by and between REPUBLIC ENGINEERED
PRODUCTS, INC., a Delaware corporation (hereinafter referred to as "Seller",
"REP" or "Republic"), and UNITED STATES STEEL CORPORATION, a Delaware
corporation (hereinafter referred to as "Buyer" or "USS").
W I T N E S S E T H:
WHEREAS, Buyer desires, commencing January 1, 2005 and during the term
hereof, to obtain a reliable and continuing source of rounds for its
pipe/tubemaking facility in Lorain, Ohio (hereinafter referred to as the
"Pipemill"); and
WHEREAS, Seller desires, commencing January 1, 2005 and during the term
hereof, to supply to Buyer rounds produced by Seller at its Lorain Works
facility, in accordance with the terms and conditions set forth herein; and
WHEREAS, the parties hereto (i.e., REP, as successor by an assignment from
Republic Engineered Products, LLC, and USS, in its own right and on behalf of
its Lorain Pipe Xxxxx operating unit), heretofore entered into (i) a certain
Rounds Supply Agreement dated effective as of August 16, 2002 covering REP's
supply to USS of tubular rounds produced at REP's Lorain Works facility
(hereinafter the "2002 Rounds Supply Agreement"), and (ii) certain related Coke
and Pellet Supply Agreements also dated effective as of August 16, 2002 covering
USS's supply to REP of coke and pellets for use at its Lorain Works facility
(said 2002 Rounds Supply Agreement and related Coke and Pellet Supply Agreements
dated August 16, 2002 being hereinafter referred to collectively as the "2002
Agreements"); and
WHEREAS, the said 2002 Agreements are by their terms to expire
(respectively) as of December 31, 2004; and
WHEREAS, REP and USS desire to enter into this Agreement in order to
provide for REP's continued production and sale and USS's purchase of tubular
rounds produced at REP's Lorain Works facility, all upon and subject to the
stated terms and conditions as herein provided; and
WHEREAS, this Agreement is being entered into in conjunction and dated
contemporaneously with the parties also entering into a related new (i) Coke
Supply Agreement and (ii) Pellet Supply Agreement covering (respectively) USS's
continued supply of coke and pellets to REP for use at its Lorain Works
facility; said new Coke and Pellet Supply Agreements being entered into of even
date herewith and (in pertinent respect) to facilitate REP's continued
production and supply of rounds to USS under this Agreement; and
NOW, THEREFORE, Seller and Buyer have agreed and do hereby agree as
follows:
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**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
ARTICLE I - DEFINITIONS
1.1 GENERAL.
Each capitalized term used herein shall have the meaning assigned to it in
this Agreement (including the Schedules hereof) or as set forth in this Article
I.
1.2 CERTAIN DEFINED TERMS.
As used herein, the following terms shall have the meanings set forth
below:
"Coke Supply Agreement" means the Coke Supply Agreement entered into
effective of even date herewith by and between Seller and USS.
"Late Payment Rate" means [****].
"Lorain Pipe Xxxxx" or "LPM" means USS Tubular Products Division's
Pipemill facility in Lorain, Ohio, located adjacent to the Lorain Works.
"Lorain Works" means Seller's steelmaking facilities located in Lorain,
Ohio, which facilities produces, inter alia, Rounds.
"LPM Xxxxx" means the LPM No. 3 Seamless Mill that utilizes Rounds that
equals or exceeds 6" (OD) and the LPM No. 4 Seamless Mill that utilizes
10 1/2" (OD) Rounds.
"Pellet Supply Agreement" means the Pellet Supply Agreement entered into
effective of even date herewith by and between Seller and USS.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other entity or
government or political subdivision or any agency, department or instrumentality
thereof.
"Rounds" means continuously cast carbon steel rounds, high strength steel
rounds and alloy steel rounds of the type produced by Seller at the Lorain Works
which are of the dimensions and chemistry set forth in Schedule D and meet the
specifications set forth in Buyer's orders as acknowledged by Seller hereunder.
"Seller's Standard Terms and Conditions of Sale" means the terms and
conditions set forth on Schedule B.
"Services Agreement" means the Administrative and Utility Services
Agreement dated August 16, 2002 by and between Buyer and Seller.
"Tons," "net ton" and "NT" each means 2,000 pounds avoirdupois in weight.
"Specification" means the TQR-09-02-LC specifications set forth in
Schedule D, as the same may be amended from time to time by mutual agreement of
the parties.
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**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
ARTICLE II - ROUNDS SALES
2.1 QUANTITIES.
(a) Subject to the terms hereof, Seller agrees to sell, and Buyer agrees
to buy Rounds for use at the Pipemill. Commencing with the month of January,
2005 and during each month thereafter that this Agreement is in effect, Seller
shall sell to Buyer and Buyer shall purchase from Seller a minimum of [****]
Tons of Rounds for use at the Pipemill (or at Buyer's Fairfield, AL Pipe Mill
facilities) during such calendar month, at the price(s) (according to Melt Line
of Rounds purchased) set forth in Article 2.2 "Prices" hereof. The parties agree
that Buyer shall have the right to designate the production of Rounds in the
following sizes: 6 Inches; 10 1/2 Inches; 12 1/4 Inches; 13 1/2 Inches and
11 5/8 Inches; provided, however, that no greater than [****]% of such Rounds
may be designated by Buyer as 6 Inch Rounds for production by Seller in any
single month. If REP' s ability to produce hot metal is constrained because USS
fails to provide Coke pursuant to the provisions of the Coke Supply Agreement
and/or Pellets pursuant to the provisions of the Pellet Supply Agreement, REP
may reduce shipments of Rounds to USS hereunder before curtailing shipments to
other customers. If REP' s ability to produce hot metal is constrained for
reasons unrelated to the supply of Coke and/or Pellets by USS, then REP shall
reduce shipments of steel products to other customers before curtailing
shipments of Rounds to USS hereunder.
2.2 PRICES.
(a) For all orders of Rounds placed hereunder, Buyer shall pay Seller the
applicable purchase price(s) based upon the type/grade of Rounds sold by Seller
and purchased by Buyer as set forth on Schedule A of this Agreement, according
to the "Melt Line Tubular" and corresponding "Base Line Per Ton As Cast" prices
as set forth in such Schedule. The designated Base Line Per Ton prices for
Rounds as set forth on Schedule A ("Base Prices for Rounds") shall be subject to
the adjustments as set forth in Article 2.2 (b) below. The designated Base Line
Per Ton prices for Rounds as set forth on Schedule A ("Base Prices for Round")
shall be subject to the following adjustments:
(1) Coke Adjustment
In the event of any change(s) (increase or decrease)
in the Coke price paid by REP to USS under the Coke
Supply Agreement from the price being paid thereunder
as of January 1, 2005, the Base Prices for Rounds
shall be subject to adjustment (increase/decrease)
according to the following formula:
[****]
(2) Pellet Adjustment
In the event of any change(s) (increase or decrease)
in the Pellet price(s) paid by REP to USS under the
Pellet Supply Agreement from the price(s) being paid
thereunder as of January 1, 2005, the Base Prices for
Rounds shall be subject to adjustment
(increase/decrease) according to the following
formula:
[****]
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**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
(3) Alloy Adjustment
[****] Such monthly adjustments shall be determined for the
affected alloy Rounds (listed by Melt Line Tubular
Grades/Specs), Alloy elements and formula calculations as
shown in the sample Lorain Tubular Alloy adjustment
computation set forth in Schedule A-1 of this Agreement.
To the extent practical, the adjustments provided for hereunder
shall not be added to or subtracted from the affected Base Prices for Rounds,
but each adjustment shall be instead treated and shown on Seller's invoices as
separate line items as an increase or reduction as applicable.
(c) The weights used for purposes of determining the amount of Rounds
actually sold hereunder shall be calculated on the basis set forth in Schedule
C, and such weights shall be conclusive as to the quantities of Rounds sold
hereunder, and such weight calculation shall exclusively govern and be used for
billing and payment purposes; provided, however, that if Buyer should encounter
material discrepancies between weights so determined and weights measured by
Buyer, Buyer and Seller shall meet to discuss reasons for such discrepancies and
whether remedial action is necessary.
2.3 ORDERS.
(a) The following procedures shall be used by the parties for ordering
Rounds:
(i) Rounds. (A) On or before the 10th day of December and the 10th
day of each succeeding month during the term hereof, Seller
will furnish Buyer with Seller's tentative schedule for
producing [****] tons of Rounds for the next succeeding month.
(B) After receipt by Buyer of Seller's schedule for producing
Rounds, Buyer shall, on or before the fifteenth (15th) day of
each such month, submit to Seller a forecast, by Rounds size,
of the number of Rounds heats required to melt for Rounds to
be delivered in the next succeeding month, said number of
Rounds heats as may be adjusted shall become final and binding
on both parties as of the last business day of such month. (C)
On or before the seventh (7th) day prior to the scheduled
monthly date for the production of Rounds as set forth in
subparagraph (A) above, Buyer will issue to Seller a written
order, which shall be conclusive, final and binding on both
parties, setting forth the number of heats of each grade
specification, and number of Rounds required by Rounds Billet
Number, for each Rounds size.
(b) Within seven (7) business days of Seller's receipt of any order from
Buyer, or prior to the scheduled monthly date of production, whichever is
earlier, Seller shall e:mail Buyer the quantity and specification of Rounds
which Seller will deliver to Buyer and the anticipated delivery dates. Any
proposed changes by Seller from Buyer's order shall be negotiated by the parties
before acknowledgement.
(c) Seller will only be required to produce a requested size of ordered
Rounds twice per month per LPM Mill at a minimum of ten heat quantity for 6"
Rounds and twelve heat quantity for larger Rounds. Seller may deliver to Buyer
during any month a quantity of Rounds that exceeds Buyer's orders for such month
by up to the next whole heat (on a grade page/Round size combination), and Buyer
shall be obligated to accept such excess quantity as if, and to the same extent
as, such excess quantity had been ordered by Buyer.
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**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
(d) Notwithstanding the foregoing, Seller shall use reasonable efforts to
minimize excess Rounds production. By way of example, if Buyer orders 7.6 heats
of a grade page/Rounds size combination, Buyer will be obligated to accept a
quantity up to 8.0 heats on such grade page/Rounds size combination.
(e) The Base Prices for Rounds on Schedule A are based on minimum
three-heat sequence per Melt Line per size. The quantity extras for less than a
three-heat sequence of a size and grade are: for two (2) heats, plus
$[****]/ton; for one (1) heat, plus $[****]/ton. Such quantity extras where
applicable shall be shown as a separate item on Seller's invoice, and shall be
invoiced when the affected Rounds are produced. The quantity extras set forth in
this paragraph shall apply only when USS requires a less than three-heat
sequence. If REP, for any other reason, utilizes a less than three-heat
sequence, no quantity extras shall apply. REP shall provide USS within 24 hours
of each melt campaign written notice of actual production by RB Number. Buyer
will pay the amounts due under this subparagraph on the next Payment Date as
defined in Article 2.5 below.
2.4 PAYMENT.
(a) For each railroad car of Rounds loaded for Buyer, Seller shall create
a computer file ("Manifest Sheet") containing the shipped date, manifest number,
roll order number, heat number and number of pieces. The Manifest Sheet shall be
transferred to Buyer's pipe computer system by electronic data transfer. Buyer
shall pay Seller via wire transfer, the net amount due per such Manifest Sheet
in accordance with the payment provisions set forth in Article 2.4(b) below.
(b) Subject to Article 2.8 below, payment shall be made for each
Settlement Period (as hereinafter defined) on the Payment Date (as hereinafter
defined). A "Settlement Period" shall be the period falling from Tuesday to and
including Thursday (the "First Settlement Period") and the period from Friday to
and including Monday ("the "Second Settlement Period"). On the day following
each Settlement Period (the "Settlement Date") (i.e. Friday and Tuesday), Buyer
shall provide to Seller a summary of all payments to be made on the Payment
Date. The Payment Date for the First Settlement Period shall be on the
immediately succeeding Monday and the Payment date for the Second Settlement
Period shall be on the immediately succeeding Wednesday. In the event a Payment
Date falls on a holiday, The Payment Date shall be the day immediately
following. Any deliveries of Rounds which are not on a Manifest Sheet provided
by Seller prior to the otherwise applicable Settlement Period (e.g., due to
delays in the normal cycle) will be settled in the next Settlement Period.
2.5 DELIVERY, TITLE AND RISK OF LOSS.
(a) Delivery of Rounds to Buyer shall take place at the handoff between
the N&T Railroad and IRSS, unless otherwise agreed, or in such manner or at such
other place as shall be agreed upon by the parties in writing prior to the
shipment of Rounds. Title and risk of loss and damage to the Rounds shall pass
from Seller to Buyer when the Rounds are delivered in accordance with this
Article 2.5(a). Seller shall be responsible for truck detention and/or rail
demurrage charges incurred by Buyer which arise out of delays to carrier
equipment at Lorain Works receiving shipments of Rounds ordered hereunder which
have been scheduled by Seller, it being understood that Seller will ordinarily
schedule such shipments. Seller shall accept direct billing from carriers for
any such detention and/or demurrage.
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(b) Delivery of Rounds to USS shall take place F.O.B. railcar at the
mainline carrier interface, unless otherwise agreed, or in such manner or at
such other place as shall be agreed upon by the parties in writing prior to the
shipment of Rounds. Title and risk of loss and damage to the Rounds shall pass
from Seller to USS when the Rounds are delivered in accordance with this Article
2.5(b). Seller shall be responsible for truck detention and/or rail demurrage
charges incurred by USS which arise out of delays to carrier equipment at the
Lorain Works receiving shipments of Rounds ordered hereunder which have been
scheduled by Seller, it being understood that Seller will ordinarily schedule
such shipments. Seller shall accept direct billing from carriers for any such
detention and/or demurrage.
2.6 TERMS AND CONDITIONS OF SALE.
(a) Seller's Standard Terms and Conditions of Sale set forth in Schedule B
shall govern the purchase and sale of Rounds hereunder except to the extent that
a provision of this Agreement otherwise applies.
(b) In the event of a conflict between the terms and conditions of this
Agreement and the terms or conditions contained in any notice, shipment,
specifications, purchase order, sales order, acknowledgment or other document
which may be used in connection with the transactions contemplated by this
Agreement, the terms and conditions of this Agreement shall supersede and
govern, unless expressly waived in accordance with Article 4.16. In the event of
a conflict between, the terms and conditions of this Agreement and the terms or
conditions contained in any Schedule or Annex hereto, the terms and conditions
of this Agreement shall supersede and govern.
2.7 WARRANTY.
(a) Seller warrants that the Rounds supplied hereunder shall be (i) in
full conformity with the Specifications and with Buyer's orders, (ii) free from
defects in material and workmanship, (iii) of good quality, and (iv) fit and
sufficient for use at Buyer's Pipemill (or USS's Fairfield Works, as applicable)
for the production of seamless pipe.
(b) Seller agrees that it will maintain adequate internal quality
management system controls, including but not limited to documented procedures,
process monitoring, testing and inspection to guarantee that Buyer receives
Rounds meeting the warranty set forth in Paragraph (a) above. Seller shall
submit to Buyer, within twenty four (24) hours of each occurrence, a written
report documenting such occurrence of nonconformance with Seller's process. Such
report shall also include Seller's action plan to prevent nonconforming Rounds
that may result from such nonconformance from being shipped to Buyer. Buyer's
representative shall be permitted unrestricted access to Lorain Works at all
times during the production of Rounds to conduct an audit and to monitor
operations and Buyer's representative shall also be permitted access to Lorain
Works to review Seller's quality records relating to the production of Rounds.
(c) When Rounds are supplied by Seller that are not in
conformance with the warranty set forth in Article 2.7.(a)
above and such non-conformance is determined by Buyer to be
caused by steelmaking, casting, cutting or the maintenance of
traceability, including but not limited to failure to meet the
Specifications, gross or excessive seams, laps, cracks,
porosity, flux
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entrapment, inclusions, and non-metalics exceeding
commercially acceptable levels for the melt line, mixed steel,
or any other quality problem that may cause damage to Buyer's
equipment or present a risk of harm to Buyer's personnel
during processing, Buyer shall provide a written
disqualification notice to Seller notifying Seller `of Buyer's
intent to disqualify the affected product line from Buyer's
requirements obligations hereunder. Seller shall have five (5)
days to investigate the identified warranty problem and to
cure the problem or to provide Buyer assurances that the
problem will be remedied and which remedy is sufficiently
satisfactory to Buyer to cause Buyer to cancel
disqualification notice, which cancellation shall not be
unreasonably withheld.
(d) In the event that Seller supplies Rounds to Buyer that do not conform
to the specifications as identified in Buyer's orders or the Specifications
hereunder, Buyer shall notify Seller of such non-conformity. Seller will
reimburse Buyer for all of Buyer's costs and expenses associated with
identifying, sorting and testing non-conforming Rounds and suspected
non-conforming Rounds including third party inspection and testing costs and
expenses (including all transportation costs associated with transportation to
and from customer's or third party inspector's facilities), subject to prior
Buyer notification and approval.
2.8 CROSS DEFAULT; RIGHT OF SET-OFF.
(a) The parties hereby agree that Buyer's obligations to make payments to
Seller hereunder for Rounds during each Settlement Period are expressly
conditioned upon and subject to the prior satisfaction in full by Seller of any
and all of its payment obligations to USS under the Coke Supply Agreement, the
Pellet Supply Agreement and the Services Agreement.
(b) Only in the event of a payment default by Republic, which is defined
as any failure by Republic at any time to make a payment when due under Article
2.4 of the Pellet Supply Agreement, Article 2.5 of the Coke Supply Agreement
and/or Article 3.2 of the Services Agreement (for any reason other than
exercising its rights upon a payment default by USS), USS may (a) defer payment
of any amounts due for Rounds hereunder until such time as any and all
delinquent amounts due and owing USS under the Services Agreement, Pellet Supply
Agreement and/or the Coke Supply Agreement (the "Delinquent Amount") are paid,
and/or (b) deliver to Republic a "Notice of Intent to Effect Set-off." Provided
that Republic has not remitted to USS the Delinquent Amount within 5 days of
Republic's receipt of the Notice of Intent to Effect Set-off, USS may, on the
5th day following the delivery of such Notice, set-off the Delinquent Amount
against the amounts owed by USS to Republic hereunder for Rounds as of the date
of such Notice. Interest on the Delinquent Amount shall accrue at the Late
Payment Rate specified in this Agreement.
(c) Notwithstanding any provision herein to the contrary, in the event
that (i) USS ceases operation at the Pipemill either on a temporary or permanent
basis or (ii) USS enters into an agreement to sell or otherwise transfer
ownership of the Pipemill assets or operations to a third party, then USS shall
have the express, immediate and continuing right to set-off any and all amounts
owed by USS to Republic hereunder against any and all amounts owed by Republic
to USS under the Coke Supply Agreement, the Pellet Supply Agreement and/or the
Services
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**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
Agreement. In addition to the set-off right contained in the immediately
preceding sentence, Buyer and USS may also substitute new or revised payment
terms and conditions for the payment terms which are then in effect hereunder.
(d) Republic hereby agrees to continue to perform fully its obligations
hereunder and under the Coke Supply Agreement, the Pellet Supply Agreement and
the Services Agreement notwithstanding the exercise by USS of any of its rights
hereunder.
2.9 MILL SCALE; SCRAP.
(a) Mill Scale. LPM will deal directly with Xxxxx or other third party for
the handling of mill scale. Republic will have no right, title, interest,
ownership, obligation or liability in, to xxxx connection with such mill scale
generated by LPM.
(b) Vehicle Scrap. LPM will not send vehicle scrap to Republic.
(c) Miscellaneous Scrap. With regard to other steel scrap (e.g., crop
ends, test coupons, burned-to-length scrap and the like) ("Miscellaneous Scrap")
generated by Buyer, the following procedures shall apply:
(i) Where rail access is readily available, LPM will load the
Miscellaneous Scrap onto rail cars used to deliver the Rounds
to LPM hereunder, at which time ownership of such Scrap shall
pass to Republic, and LPM shall have no further claim, right,
title, interest, obligation or liability in, to or in
connection with such Scrap. Republic shall pay LPM for the
Miscellaneous Scrap [****] received from the Lake Terminal
scale. All costs associated with the transportation and
weighing of such Scrap shall be borne by [****];
(ii) Where rail access is not readily available, LPM will load the
Miscellaneous Scrap into scrap boxes ("Boxes") provided and
maintained by LPM. When a Box is full, LPM will arrange for
delivery of such Box to Republic, with the costs of such
delivery to be borne by [****]. Republic shall pay to LPM the
amount set forth below for the Miscellaneous Scrap [****], as
measured on the truck scales located at the Xxxxx, Inc.
Lorain, Ohio facility, with the costs of such weighing to be
borne by LPM. Ownership of the Miscellaneous Scrap shall pass
to Republic upon delivery of such Scrap to Republic, and LPM
shall have no further claim, right, title, interest,
obligation or liability in, to or in connection with such
Scrap.
(iii) For Miscellaneous Scrap Republic will pay to LPM an amount
equal to the arithmetic average of the low and high scrap
prices for the Chicago, Cleveland and Pittsburgh areas for
plate and structural [****]' maximum, as published by American
Metal Market on the fifth working day of the month such scrap
is delivered, less $[****] per Gross ton for handling.
(iv) LPM agrees to prepare the Miscellaneous Scrap to lengths of
approximately [****] feet or less, and will segregate carbon
versus alloy wherever possible.
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(d) LPM will provide to Republic a monthly Metals Balance setting forth
quantity of scrap sold to Republic under this Articles 2.9(b) and (c). All
amounts payable to LPM by Republic under this Article 2.9 shall be paid as a
credit taken by LPM on a monthly basis against amounts due to Republic under
Article 2.4.
(e) Terms of Sale. All Miscellaneous Scrap sold to Republic hereunder
shall be delivered pursuant to the terms and conditions contained in LPM's order
acknowledgement and IS SOLD AS IS, WITHOUT ANY WARRANTIES OR GUARANTEES
WHATSOEVER. LPM makes no, and hereby disclaims any and all, representations,
warranties or guaranties, whether express or implied, including without
limitation, warranties as to the condition, composition or other physical
characteristics of such materials and any implied warranties of merchantability
or fitness for a particular purpose. All such material is being transported for
recycling purposes as defined in applicable tariffs and other laws, rules and
regulations.
ARTICLE III - TERM AND TERMINATION
3.1 TERM.
This Agreement shall be effective as of the Effective Date set forth in
the preamble hereto and shall remain in full force and effect through June 30,
2005, unless thereafter extended upon the written mutual agreement of the
parties or earlier terminated as follows:
(i) By written mutual consent of the parties at any time;
(ii) By either party if the other party is in default under any of
the provisions of this Agreement and fails to correct such
default within 30 days of written notice of such default;
(iii) By Seller if Buyer at any time fails to make any payment when
due under the terms of this Agreement; or
(iv) By Buyer, upon 30 days' prior written notice, if Seller
terminates the Coke Supply Agreement, the Pellet Supply
Agreement or the Services Agreement for any reason other than
default of USS thereunder.
In addition to the rights of Buyer to terminate this Agreement pursuant to
subsection (v) above, USS shall have the right, upon the occurrence of any of
the events set forth therein, (X) to suspend production and/or refuse to make
further shipments or deliveries of Coke and/or Pellets or otherwise suspend its
further performance under the Coke Supply Agreement, the Pellet Supply Agreement
and/or the Services Agreement or (Y) to declare immediately due and payable all
then outstanding and unpaid invoices covering Coke and/or Pellets previously
delivered under the Coke Supply Agreement and/or the Pellet Supply Agreement.
In addition to its other remedies set forth elsewhere herein and as provided
under applicable law, upon notice to REP and/or USS may withhold and retain from
time to time out of monies due REP hereunder, amounts sufficient to fully
reimburse and compensate Buyer and/or USS for any loss or damage which it
sustains, or may sustain, as a result of any default or any breach by REP of any
of the provisions of the Coke Supply Agreement, the Pellet Supply Agreement
and/or the Service
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Agreement, or by reason of any other claims LPM and/or USS may have against REP
under any other agreement between them.
As used herein, "default" means failure of either party to perform, keep or
observe any material obligation, provision, warranty or condition contained
herein, unless such performance is otherwise excused by the terms of this
Agreement.
3.2 TERMINATION.
(a) Seller and Buyer agree that upon and after termination of this
Agreement:
(i) All orders previously accepted by Seller hereunder, and
Buyer's obligation to pay for such orders, shall continue in
full force and effect.
(ii) Buyer shall remain obligated to make any payment that became
due and owed to Seller hereunder prior to termination.
(iii) Liabilities and obligations of any party arising from any act,
omission, default or occurrence prior to termination shall
remain with such party.
(iv) The parties' rights and obligations under Articles 2.4, 2.7,
4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.13, 4.14, 4.15, 4.17 and
this Article III shall survive the termination of this
Agreement.
ARTICLE IV - MISCELLANEOUS
4.1 PAYMENT ERRORS.
(a) If either Buyer or Seller believes that there has been an error in an
amount paid or the timing of any payment hereunder, then such party shall notify
the other party of such alleged error and shall provide such written evidence of
the error as is available at the time of such notice. Each party shall provide
the other with sufficient records relating to the matter so as to permit the
parties to attempt to resolve the inconsistency.
(b) Following the determination of whether an error occurred, any
overpayment or underpayment found shall be remedied, by the party that benefited
from such error.
(c) Notwithstanding the foregoing, neither party may question the
accuracy, correctness, timing or amount of any payment under this Agreement
unless it notifies the other party of its disagreement within the 12 months
immediately following the date such payment was due.
4.2 DISPUTE RESOLUTION.
At any time and from time to time, if the parties are unable to resolve a
dispute concerning Buyer's or Seller's performance or nonperformance of their
obligations under this Agreement (excepting any disputes excluded
herefrom), Buyer or Seller, as the case may be, shall provide written notice to
the other of such dispute as provided in Article 4.9 hereof. It is mutually
agreed that any default by USS in its payment obligations hereunder (or any
dispute relating thereto),
10
and/or any dispute relating to USS's exercise of its rights under Article 2.10
hereof shall not be subject to (and are excluded from) the provisions of this
Article 4.3; it being agreed that any such excluded disputes (as aforesaid)
shall be pursued and adjudicated by the parties in a court of competent
jurisdiction. Any other dispute shall be resolved by using the procedures for
Mediation and Arbitration set forth below:
(a) Mediation. At any time after a party has provided a written notice of
dispute to the other party, but prior to the time that either party commences
arbitration pursuant to Article 4.3(b) herein, the parties may agree to submit
the dispute to non-binding mediation under terms and conditions satisfactory to
both parties.
(b) Arbitration. At any time after a party has provided a written notice
of dispute to the other party, including at any time during any non-binding
mediation agreed to by the parties, either party may submit the matter in
dispute to a pre-designated arbitrator or, in the event such arbitrator has not
been selected or is unavailable, to a three member arbitral panel to which each
Party shall appoint one member and those two members shall appoint a third
member. Such arbitration shall be governed by the CPR Rules for Non-Administered
Arbitration of Business Disputes. Pending the issuance of an arbitral decision,
the Parties shall continue their full and normal operations and obligations in
accordance with this Agreement. All arbitral awards for the payment of money
and/or for any retroactive adjustment of any interim prices paid hereunder shall
accrue interest at the Late Payment Rate starting from the date on which any
amount is due or the date on which the interim payment was due.
(c) Consent to Enforceability. Each of the Parties consents and agrees
that any arbitral award rendered pursuant to Subsection 4.3(b) shall be final,
non-appealable and binding against the Parties and their respective assets, and
may be enforced by any court of competent jurisdiction.
4.3 AUDIT
(a) Each party shall maintain such books and records as may be reasonably
necessary to verify amounts due under this Agreement and Buyer shall maintain
records to verify compliance with its requirement obligations under Article 2.2
above. Such books and records shall be open to audit by the other party's third
party accounting firm during reasonable business hours during the life of this
Agreement and for a period of one (1) years thereafter. The costs associated
with such audit shall be paid by the requesting party and the audit firm shall
sign a confidentiality agreement satisfactory to the party being audited.
4.4 CONFIDENTIALITY
(a) Buyer and Seller acknowledge that all information about the
businesses, properties, finances, prospects, marketing, processes, products,
methods, computer programs, procedures, machinery, apparatus or trade secrets
owned, or held or used (including under license from or agreement with third
parties) by the other that is disclosed to Buyer or Seller, as the case may be,
during the course of performing its obligations under this Agreement is the
property of, and is proprietary and confidential to the disclosing party (the
"Proprietary Information").
(b) Buyer and Seller agree that they shall use reasonable efforts not to
make any disclosure of the other's Proprietary Information (including methods or
concepts utilized therein
11
other than those commonly known to professionals in the field) to any Person
other than officers, employees and agents of and consultants to Buyer or Seller
to whom such disclosure is necessary or convenient for performance of its
obligations hereunder and except as may be required by applicable legal
requirements or by a court of competent jurisdiction. Buyer and Seller shall
appropriately notify each officer, employee, agent and consultant to whom any
such disclosure of the other's Proprietary Information is made that such
disclosure is made in confidence and shall be kept in confidence by such Person.
(c) Each of Buyer and Seller agrees to use diligent efforts in accordance
with customary and reasonable commercial practice and at least with the same
degree of skill and care that it would manifest in protection of its own
proprietary and confidential property to protect the other's Proprietary
Information.
(d) Each of Buyer and Seller agrees to notify the other immediately in the
event that it becomes aware of the unauthorized possession or use of the other's
Proprietary Information (or any part thereof) by any third Person, including any
of its officers, employees, agents or consultants. Each of Buyer and Seller
further agrees to cooperate with the other in connection with its efforts to
terminate or prevent such unauthorized possession or use of such Proprietary
Information. Seller or Buyer, as the case maybe, shall pay the nonproprietary
party's reasonable out-of-pocket expenses in so cooperating, unless the
unauthorized possession or use of the Proprietary Information resulted from the
fault or negligence of such nonproprietary party.
(e) Notwithstanding any other provision of this Agreement, the obligation
of Buyer and Seller to maintain the confidentiality of the other's Proprietary
Information shall not apply to any portion of such Proprietary Information that:
(i) was in the public domain at the time of Buyer's or Seller's
disclosure to the other;
(ii) enters the public domain through no fault of the
nonproprietary party;
(iii) was communicated to the nonproprietary party by a third party
free of any obligation of confidence known to the
nonproprietary party; or
(iv) was developed by officers, employees or agents of or
consultants to the nonproprietary party independently of and
without reference to the Proprietary Information;
provided, however, that Proprietary Information which is specific shall not be
considered to be within the exception provided by this Article 4.5(e) merely
because it is embraced by general information in the public domain; provided
further, that any combination of features within the Proprietary Information
shall not be deemed. within such exception merely because individual features
are within the public domain, but only if the combination itself is within the
public domain.
4.5 SEVERABILITY.
In case anyone or more of the provisions contained in this Agreement is
adjudged to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the
12
remaining provisions contained herein shall not in any way be affected or
impaired thereby, except to the extent necessary to avoid an unjust or
inequitable result.
4.6 RIGHTS AND REMEDIES; NO CONSEQUENTIAL DAMAGES.
The rights and remedies granted under this Agreement shall not be
exclusive but shall be in addition to all other rights and remedies available at
law or in equity, including, but not limited to, claims for breach of contract,
except that Buyer and Seller agree that in no event shall either party be liable
to the other for any indirect, special or consequential damages or lost profits
as a result of a breach of any provision of this Agreement.
4.7 COSTS AND EXPENSES.
Each of Buyer and Seller shall bear its own expenses incurred in
connection with the negotiation, preparation and execution of this Agreement.
4.8 NOTICES.
All notices or other communications required or permitted by this
Agreement shall be effective upon receipt and shall be in writing and (i)
personally delivered, or (ii) mailed by registered or certified mail, return
receipt requested, or (iii) sent by overnight delivery service which provides
proof of delivery, or (iv) sent by telecopy, with a duplicated copy sent via
first class mail postage prepaid, addressed as follows:
If to Seller:
REPUBLIC ENGINEERED PRODUCTS, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxx, Xxxx 00000
Attention: Vice President - Commercial
Facsimile: (330) 670 - 7030
If to Buyer:
UNITED STATES STEEL CORPORATION
Room 2001
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 - 2800
Attention: General Manager Tubular Products
Facsimile: (000) 000-0000
or to such other address as hereafter shall be furnished as provided in this
Article 4.9 by either of the parties hereto to the other.
4.9 ASSIGNMENT.
(a) Except as provided in Article 4.10(c), neither party can without the
prior written consent of the other assign any of its rights or benefits or
delegate any of its duties or obligations
13
under this Agreement, and any attempted assignment or delegation which is not
permitted under Article 4.10(c) shall be null, void and without effect;
provided, however, that Buyer may grant a security interest in Buyer's rights,
benefits, duties and obligations under this Agreement without the consent of
Seller. Buyer shall provided Seller written notice of the granting or revision
of any such security interest.
(b) The rights, benefits, duties and obligations of each party hereto
shall inure to the benefit of, and be binding upon, any successors, assigns or
delegates permitted under Article 4.10(c).
(c) Either party hereto may delegate any of its duties or obligations
under this Agreement to any Person, but except as otherwise provided in this
Agreement such party shall remain liable for the full performance of such duties
and obligations. Either party hereto may assign or delegate any of its rights,
benefits, duties or obligations hereunder (i) to any Person if it has received
the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed, (ii) to its legal successor if it merges
(whether or not it is the surviving corporation) or consolidates with one or
more other Persons or (iii) to any Person to whom either party has made any
sale, lease, transfer or other disposition of all or substantially all of its
assets; provided, however, that neither party may make an assignment or
delegation described in clauses (ii) and (iii) above unless there are delivered
to the other party such written assumptions, affirmations and/or legal opinions
as such other party may reasonably request to preserve its rights and remedies
under this Agreement.
4.10 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute a
single instrument.
4.11 ENTIRE AGREEMENT.
This Agreement (including the Schedules hereto) sets forth the entire
understanding and agreement between the parties as to the matters covered herein
and supersedes and replaces any prior understanding, agreement or statement of
intent, in each case written or oral. Schedules A, A-1, B, C and D attached are
hereby incorporated by reference and made apart of this initial Agreement.
4.12 HEADINGS.
The headings contained in this Agreement are for convenience of reference
only and do not modify or affect in any way the meaning or interpretation of
this Agreement.
4.13 GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with, and
governed by, the laws of the State of Ohio, excluding its conflict of laws
provisions.
4.14 NO THIRD PARTY RIGHTS.
14
This Agreement is intended to be solely for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any Person other than the parties hereto, except as expressly provided
to the contrary elsewhere in this Agreement.
4.15 WAIVER AND AMENDMENTS.
No waiver shall be deemed to have been made by either party of any of its
rights under this Agreement unless the same shall be in a writing that expressly
refers to this Article 4.16 and is signed on its behalf by its authorized
officer. Any such waiver shall constitute a waiver only with respect to the
specific matter described in such writing and shall in no way impair the rights
of the party granting such waiver in any other respect or at any other time.
This Agreement shall not be amended or modified except by an instrument in
writing signed by the party against whom enforcement is sought.
4.16 FORCE MAJEURE.
(a) Except for obligations to make payments hereunder, neither party
hereto shall be liable for any failure to perform the terms of the Agreement
when such failure is due to Force Majeure. "Force Majeure" means acts of God,
strikes, lockouts, or other labor disputes or disturbances, civil disturbances,
arrests and restraint from rulers or people, interruptions or terminations by or
as a result of government or court action or orders, or present and future valid
orders of any regulatory body having jurisdiction, acts of the public enemy,
wars, riots, blockades, insurrections, inability to secure or delay in securing
labor or materials by reason of allocations promulgated by authorized
governmental agencies, epidemics, landslides, lightning, earthquakes, fire,
storm, floods, washouts, explosions, breakdowns or accidents, inability to
obtain transportation services, or any other cause, whether of the kind herein
enumerated or otherwise, not reasonably within the control of the party claiming
Force Majeure. The Force Majeure shall, so far as possible, be remedied with all
reasonable dispatch. The settlement of strikes or lockouts or other labor
disputes or disturbances shall be entirely within the discretion of the party
having the difficulty, and the above requirement that any Force Majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes, lockouts, or labor disputes or disturbances by acceding to the demands
of any opposing party therein when such course is inadvisable in the discretion
of the party having the difficulty.
(b) The party whose performance is affected or who has reason to believe
such performance may be affected by reason of Force Majeure shall as promptly as
possible give notice thereof to the other party and shall confirm such notice in
writing if requested, giving the particulars of the event, including supporting
documentation if available. The party so affected shall also take reasonable
steps to resume performance hereunder with the least possible delay.
4.17 RELEASE.
(a) As part of the consideration forming the basis for the parties
entering into this Agreement and the related Coke Supply Agreement and Pellet
Supply Agreement, and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, USS and REP do hereby
unconditionally remise, release and forever discharge each other of and from any
and all open and pending claims and disputes arising out of or related to the
2002 Rounds Supply
15
Agreement that were in existence as of the Effective Date of this Agreement,
including, but not limited to, any claim by USS relating to an annual rebate
based upon the volume of Rounds purchased under such 2002 Agreement; provided
however that the foregoing release shall not be deemed to release any routine
payment, weight adjustment and/or quality claims arising in the ordinary course
of business under the 2002 Rounds Supply Agreement, or any claims constituting a
material breach or default by either party thereunder that arise or occur after
the date on which this Agreement is executed by all parties, but prior to
expiration of the 2002 Rounds Supply Agreement.
(b) Nothing contained in Article 4.17 (a) above or elsewhere in this
Agreement shall alter or affect REP's or USS's respective rights, or release
either party of their respective obligations under the 2002 Rounds Supply
Agreement except as otherwise expressly modified or provided to the contrary
herein.
16
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first written above.
REPUBLIC ENGINEERED PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: VP Commercial
UNITED STATES STEEL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Manager - Tubular Products
17
**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
2005 SCHEDULE A
[****]
**** INDICATES OMITTED MATERIAL THAT
IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST FILED
SEPARATELY WITH THE COMMISSION
SCHEDULE A-1
LORAIN TUBULAR ALLOY
[****]
2
SCHEDULE B
TO
ROUNDS SUPPLY AGREEMENT
SELLER'S STANDARD TERMS AND CONDITIONS OF SALE
1. PAYMENTS: Payments shall be made at par in legal tender of the United
States of America. Buyer shall make such arrangements for payment as
Seller shall from time to time reasonably require, and Seller may suspend
production, shipment or delivery until such arrangements are made. Unless
authorized, if Buyer fails to make payment in full within the time period
set forth on in the Agreement or within the time period expressly agreed
upon in writing by the parties, such failure to pay on time constitutes a
material breach of contract by Buyer permitting Seller to suspend
production, shipment or delivery under this or any other contract between
Buyer and Seller, and Buyer shall pay to Seller interest on the unpaid
amount at the Late Payment Rate, and Seller shall have, in addition, all
other remedies permitted to Seller by law, equity and this contract. If
Seller has to take legal action to collect any amount due hereunder, Buyer
shall pay court costs, plus reasonable attorney's fees incurred by Seller
in bringing such legal action.
2. TAXES: To the extent legally permissible, all present and future taxes
imposed by any Federal, state, foreign or local authority which Seller may
be required to payor collect, upon or with reference to the sale,
purchase, transportation, delivery, storage, use or consumption of goods
or services, including taxes upon or measured by the receipts therefrom
(except net income and equity franchise taxes), shall be for account of
Buyer.
3. TITLE; INCIDENTAL TRANSPORTATION AND STORAGE CHARGES: Unless otherwise
agreed, title to goods and risk of loss shall pass to Buyer upon tender of
delivery at the F.O.B. point specified. Any charges at destination for
spotting, switching, handling, storage and other accessorial services, and
demurrage, shall be for Buyer's account. Seller shall have the right to
assess a storage and handling charge for goods left in Seller's possession
after notification to Buyer that the goods are available to ship.
4. TIME OF SHIPMENT AND SHIPPING: Time is not of the essence hereunder. Each
shipment is to be considered a separate sale. Seller reserves the right to
ship all or any part of the goods from any shipping point of Seller other
than the shipping point or points specified herein.
5. SPECIFICATION VARIATIONS: Except in the particulars specified by Buyer
.and expressly agreed to in writing signed by Seller, the goods furnished
hereunder shall be produced in accordance with the Seller's standard
practices. All goods, however, including those produced to meet an exact
specification, shall be subject to Seller's mill tolerances and variations
consistent with good mill practice in respect to dimension, weight,
straightness, section, composition and mechanical or physical properties,
and to normal variations in surface and internal conditions and in quality
and to deviations from tolerances and variations consistent with practical
testing and inspection methods and to regular mill practice on over and
under shipments (as set forth in Article 2.4(c) of the Rounds Supply
Agreement.
3
6. INSPECTION: Where mill inspection is made by Buyer, Buyer's inspector
shall be deemed the agent of Buyer with authority to waive specified tests
and details of test procedure and to accept goods as conforming to this
contract with respect to all characteristics of such goods for which such
inspection is made.
7. FORCE MAJEURE: Shall have the meaning as set forth in Article 4.17 of the
Rounds Supply Agreement.
8. PATENT INDEMNITY: Seller shall indemnify Buyer (a) for all direct and
actual damages recovered from Buyer by a third party in a legal action for
infringement of a U.S. patent claim covering goods furnished hereunder, on
condition that Buyer promptly notifies Seller of the alleged infringement,
affords Seller the opportunity to assume defense thereof, and cooperates
with Seller in defense of the action and in any feasible mitigation of
damages; and (b) for Buyer's directly and reasonably incurred expenses in
defending such legal action if, after such notice and opportunity given by
Buyer, Seller elects not to assume such defense; provided, that such
election by Seller shall not otherwise affect Buyer's aforesaid
obligations. In like manner, Buyer shall indemnify Seller, and Seller's
indemnity of Buyer hereunder shall not apply, with respect to a claim
arising out of Seller's compliance with special designs or specifications
furnished by Buyer, now or hereafter forming a part of this contract, or
with other written instructions given by Buyer for the purpose of
directing the manner in which Seller shall perform this contract. In no
event shall a party hereto have any liability hereunder for indirect or
consequential losses or damages suffered, or other expenses incurred, by
the other party hereto or any third party by reason of any patent
infringement claim.
9. WARRANTY DISCLAIMERS: SELLER WARRANTS THAT THE GOODS FURNISHED HEREUNDER
WILL BE PRODUCED AND TESTED IN ACCORDANCE WITH THIS AGREEMENT AND THE
SPECIFICATIONS SET FORTH IN BUYER'S ORDER. HOWEVER, NO WARRANTY OF FITNESS
FOR ANY PARTICULAR PURPOSE NOR ANY OTHER REPRESENTATION OR WARRANTY,
WHETHER EXPRESS OR IMPLIED, IS MADE RESPECTING SAID GOODS, OR THE
PRODUCTION THEREOF AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THIS
AGREEMENT AND THE DESCRIPTION IN BUYER'S ORDER.
10. LIMITATION OF REMEDIES: Seller will replace, at the delivery point
specified herein, any goods furnished hereunder that are found to be
defective or otherwise fail to conform to any warranty or this contract,
or, at Seller's option, Seller will promptly repay the price paid for such
goods, plus any transportation charges and other incidental expenses paid
or incurred by Buyer as a result of Seller's breach in addition to such
price. Claims must be made promptly following delivery of the goods to
Buyer and Seller must be given a reasonable opportunity to investigate and
cure any nonconformity; provided, that Seller's right to cure shall not
extend beyond 5 days after Buyer's notice of such defect or nonconformity.
Except as expressly set forth otherwise in the Round Supply Agreement,
Buyer's exclusive remedies with respect to any goods furnished by Seller
hereunder that are found to be defective or otherwise not in conformity
with any warranty or this contract shall be limited exclusively to the
right to replacement thereof or to repayment of the price, as above
provided. Seller's liability for any other breach of this contract shall
be limited to the
4
difference between the delivered price of the goods covered hereby and the
market price of such goods at Buyer's destination at the time of such
breach. IN NO EVENT SHALL SELLER BE LIABLE FOR PERSONAL INJURY, PROPERTY
DAMAGE, LOSS OF PROFIT, DELAY OR ANY CONSEQUENTIAL DAMAGES WHETHER ARISING
FROM CONTRACT, BREACH OF CONTRACT, TORT, SELLER'S NEGLIGENCE, STRICT
LIABILITY, OR ANY EXPRESS OR IMPLIED WARRANTY, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
11. EXCLUSIVE TERMS AND CONDITIONS; ACCEPTANCE; MODIFICATION: No terms or
conditions other than those stated herein and no agreement or
understanding, oral or written, in any way purporting to modify these
terms and conditions shall be binding on Seller unless hereafter made in
writing, specifically stating that it is a modification of these terms and
conditions, and signed by Seller's authorization representative. If these
conditions and this form constitute Seller's acceptance of Buyer's order,
then this acceptance is expressly made conditional on Buyer's assent to
these conditions as the only conditions for this sale. Acceptance of the
products sold hereunder by Buyer shall constitue assent to these
conditions, and Seller hereby objects to and rejects any and all
additional or different terms proposed by Buyer, whether contained in
Buyer's purchase order or shipping release forms, or elsewhere. All
proposals, negotiations and representations, if any, made prior and with
reference hereto are merged herein.
12. CONDITIONS INCORPORATED BY REFERENCE: Any clause required to be included
in a contract of this type by any applicable law or administrative
regulation having the effect of law shall be deemed to be incorporated
herein.
13. WAIVER: Waiver by Seller or Buyer of any breach of these provisions shall
not be construed as a waiver of any other breach.
14. ASSIGNMENT: Neither party may assign its rights or obligations hereunder
without the prior written consent of the other party.
15. TITLES: The titles used in these Conditions are for convenience or
reference only and are not to be considered in interpreting the substance
of the condition.
5
SCHEDULE C
TO
ROUNDS SUPPLY AGREEMENT
WEIGHTS
The following theoretical weights, in pounds per foot of length, is used to
calculate production and shipping weights for Rounds sold to Buyer's Pipemill or
to USS's Fairfield Works, as applicable. This shipping weight calculation is
used for billing and freight purposes.
Size (inches) Type Weight (lbs./foot)
------------- ---- ------------------
6.0 Cast 93.9162
10.5 Cast 287.6185
11.625 Cast 352.5528
12.25 Cast 391.4807
13.5 Cast 475.4510
SCHEDULE D
TO
ROUNDS SUPPLY AGREEMENT
THE TQR-09-02-LC SPECIFICATIONS
LPM TUBULAR QUALITY REQUIREMENTS
Number: TQR-09-02-LC
Title: INBOUND ROUNDS QUALITY Page: 1 OF 6
REQUIREMENTS, Previous: 08-01-95
REPUBLIC - CAST & ROLLED ROUNDS Revised: 03-10-00
(1)SCOPE:
Quality requirements for Cast & Rolled Rounds produced at the Republic
Primary Operations-Lorain #1 and #2 Casters, for LPM, to include the
following outside diameter sizes:
6" -- #4 SEAMLESS XXXXXXXXXXX
00-0/0", 00 0/0", 00 0/0" & 13 1/2" -- #3 SEAMLESS APPLICATION
(2)REQUIREMENTS:
GENERAL
2.1-Steel is ordered by specification number, which comprises the last
three digits of the Round Billet Number and refers to the "LPM Steel
Specification."
2.2-Heat chemistries shall be within limits specified as "Ladle Acceptance
Limits" on the Specification. Residual elements, not specified, shall be
kept as low as possible, consistent with sound steelmaking practices.
2.3-Heats with chemistries outside the "Ladle Acceptance Limits" and heats
or rounds violating any other specification requirement may be rejected by
Steelmaking or the Caster, or referred to Tubular Quality Assurance for
disposition.
IDENTIFICATION
2.4-6" ROUNDS-Each round shall be legibly paint stenciled on one end with
the heat number and round billet (RB) number specified on the requisition.
2.5-10-1/2", 12-1/4" , 12-3/4" & 13-1/2" ROUNDS-Each round shall be
legibly DOUBLE paint stenciled on one end with the heat number and round
billet (RB) number specified on the requisition.
DIMENSIONAL TOLERANCES
2.6- WEIGHT/LENGTH -- Rounds shall be ordered by length corresponding to
the required weight. Uniform round length is CRITICAL.
2.6.A- Orders in which short rounds cannot be accepted, shall be
identified by Business Planning on the requisition.
2.7-Final length tolerances are applicable for all rounds, regardless of
where the rounds are cut.
2.7.A-For #3 Seamless, see Table I.
2.7.B-For #4 Seamless, see Table II.
TABLE I
NO. 3 SEAMLESS MILL
10.5" Rounds -- +1"/-1" MAXIMUM VARIANCE FROM ORDERED LENGTH.
12.25"/12.75"/13.5" Rounds less than 13.5 foot mult lengths - +1"/-1"
12.25"/12.75"/13.5" Rounds equal to or greater than 13.5 foot mult lengths -
+2"/-1". NOTE -- Short rounds may be shipped under the following guidelines:
GROUP A - ROUNDS BETWEEN 1% AND 7.5% SHORT OF ORDERED LENGTH. Rounds shall be
segregated, manifested as Group A Shorts, and shipped separately. Manifests
shall be faxed to #3 Hot Mill (3530), Lorain Business Planning (3044), #3
Seamless Department Manager (3079) and LPM Accounting (3266).
If Group A shorts exceed 10% of a heat, they shall be referred to LPM Business
Planning and the #3 Seamless Department Manager before shipping.
Rounds greater than 7.5% short shall NOT BE SHIPPED, they must be referred to
LPM Business Planning and the #3 Seamless Department Manager for acceptance or
rejection.
TABLE II
NO. 4 SEAMLESS MILL
ALL ROUND SIZES -- +2"/-0" MAXIMUM VARIANCE FROM ORDERED LENGTH.
NOTE: -- Short rounds may be shipped under the following guidelines:
GROUP A-- ROUNDS NO MORE THAN 20% OR 12 INCHES (WHICHEVER IS LESS) SHORT OF
ORDERED LENGTH.
Group A shorts shall be those billets intended for production of < or =2.875" OD
pipe.
GROUP B -- ROUNDS NO MORE THAN 10% OR 12 INCHES (WHICHEVER IS LESS) SHORT OF
ORDERED LENGTH.
Group B shorts shall be those billets intended for production of > 2.875" and <
or = 4.500" OD pipe.
Short Rounds intended for production of 4.875" OD pipe SHALL NOT BE SHIPPED
until referred to LPM Business Planning and the #4 Seamless Dent. Manager for
acceptance or rejection
Rounds shall be segregated, manifested as Group A or Group B shorts, and shipped
separately.
Monthly consumption of short rounds shall not exceed 0.75%.
3
2.8- OUTSIDE DIAMETER -- Average OD of any section of rolled rounds shall
not exceed +1/8"/- 0" and for cast rounds +1/8"/-1/8" from the ordered OD,
measured with a Pipe tape.
2.9- OVALITY (out of round) -- Maximum diameter minus minimum diameter of
any section (excluding flat spots and mechanical defects) shall not to
exceed:
6" Rounds -- 3/16"
10 1/2" Rounds -- 1/4"
12-1/4" & 12 3/4" -- 5/16"
13.5" -- 3/8"
2.10- STRAIGHTNESS -- All sizes, variance shall not exceed 1/2" per 5' of
length.
2.11- END SQUARENESS - Shall not exceed:
6" Rounds -- 1/4" From Perpendicular
10-1/2" Rounds -- 5/16" From Perpendicular
12-1/4" &12 3/4" -- 3/8" From Perpendicular
13 -1/2 -- 7/16" From Perpendicular
SURFACE CONDITION
2.12- Flat Spots -- Width shall not exceed Table 2 dimensions, with the
following aims Table 1, for maximum width based on round diameter. Flat
spots exceeding Table 2 limits, may be referred to the respective Hot Mill
management for acceptance.
TABLE 1 TABLE 2
------- -------
6" Rounds 1" 1 -3/4"
10-1/2" Rounds 1 -1/4" 2"
00-0/0" &00 0/0" 0 -0/0" 0"
00-0/0" 0 -0/0" 0 -0/0"
2.13- MECHANICAL DEFECTS -- The width to depth ratio for mechanical
defects such as gouges and roll marks, shall be at least 4 to 1. Defect
depth should not exceed:
Depth Width
----- -----
6" Rounds 1/16" 3/4"
10 1/2" Rounds 1/4" 1"
12-1/4" & 12 3/4" & 13 1/2 5/16" 1"
2.14- END CONDITION -- Ends shall be free from gouges and grooves. Torch
build-up (swarf) in excess of 1/4" thick on 6" rounds and 3/4" on 10.5"
and larger diameter rounds shall be considered rejectable. Rounds
exceeding these limits shall not be shipped until referred to the
respective operating department Department Manager for acceptance.
STEEL QUALITY
2.15- SURFACE -- Surface defects, such as seams, cracks, and laps shall be
minimized through sound steel-making, casting practices and rolling
practices.
4
2.16-INTERNAL -- Internal soundness and density shall be sufficient to
ensure uniformity of billet weight per unit length. Internal defects such
as inclusions, and porosity, shall be minimized through sound steel-making
and casting practices.
ROUNDS LOADING
2.17- Rounds shall be loaded in "clean" railroad cars. There should be no
scrap, bands, slag or other metallic scrap present. Cars should not have
holes in the flooring, and all sidewalls should be present, and stable as
applicable.
2.18- Rounds shall be loaded with the identification end facing east in
the railroad car. The following loading guidelines should be followed as
much as possible:
-- There should be at least a 4' space at the identification end of
each stacked pile of rounds within the car.
-- The stacked pile should not exceed the height of the car sidewalls.
-- The ends of the pile should be square, not staggered. The billets
should be parallel within the stack, not crooked or skewed.
2.19- The rounds in each pile shall be of the same heat and RB number,
with no more than three (3) heats of a single RB number and no more than
three (3) RB numbers of a single grade in one car.
DOCUMENTATION
2.20- Official tundish analysis shall be maintained in the Republic
computerized heat release system and on ladle analysis sheets maintained
by the Republic Technical Services Department. Certified test reports.
shall be required.
2.21- A billet manifest shall accompany each railroad car and accurately
identify the heat and RB number of all rounds loaded. Actual and manifest
round counts shall correspond.
2.22- Additional documentation, necessary to satisfy order requirements,
shall be reviewed with Republic personnel for approval, prior to order
entry.
NON-CONFORMANCES
2.23- SUPPLYING FACILITY -- Heats or rounds failing to meet quality or
specification requirements may be rejected by Republic, or referred to the
LPM Quality Assurance Department for disposition. Referrals should be made
during normal daylight working hours, whenever possible.
2.24- INCOMING INSPECTION -- Inbound rounds failing to meet quality
requirements on incoming inspection shall be subject to return to
Republic. All count or identification discrepancies shall be corrected or
resolved by Republic personnel in cooperation with LTC personnel and
documented prior to charging the rounds. Corrective action may be required
of Republic in cases of serious or repetitive nonconformances.
2.25- FINAL INSPECTION -- Rejected LPM Product attributable to supplied
steel or round quality, shall be reviewed with Republic personnel. Samples
shall be made
5
available, as applicable. Corrective action may be required of Republic in
cases of serious or repetitive quality problems.
2.26- GENERAL-- The supplier shall maintain a system for the reporting of
defects and noncompliance discovered during the performance of services
performed for LPM.
2.26.A- This system for the reporting shall meet the intent of the
requirements and provisions of Title 10, Code of Federal
Requirements Part 21(10-CFR-21). Actual NRC notification shall be
conducted by USS Tubular Products.
(3) RESPONSIBILITIES
3.1-It shall be the responsibility of the REPUBLIC steel cast billet
facility to:
3.1.A- Use trained personnel to perform the services specified
in this requirement.
3.1.B- Generate and maintain documented procedures for the
production of steel cast billets, to ensure compliance with
applicable specifications and standards.
3.2-It shall be the responsibility of LPM DEPARTMENT MANAGER QUALITY
ASSURANCE to:
3.2.A- Maintain the requirements for steel cast billets
supplied to the LPM within the scope of this TQR.
3.2.B- Perform, through qualified auditors, audits of
Republic's billet supplying facilities.
3.2.C- Resolve all Heat and steel cast billet nonconformances
referred by the Republic steel cast billet testing facilities.
3.3-It shall be the responsibility of LPM to:
3.3.A-Utilize only approved steel cast billet facilities for
the supplying of steel furnished to the LPM.
LPM TUBULAR QUALITY REQUIREMENTS
Number: TQR-09-02-LC
Title: INBOUND ROUNDS QUALITY Page: 1 OF 6
REQUIREMENTS, Previous: 08-01-95
REPUBLIC - CAST & ROLLED ROUNDS Revised: 03-10-00
(1)SCOPE:
Quality requirements for Cast & Rolled Rounds produced at the Republic
Primary Operations-Lorain #1 and #2 Casters, for LPM, to include the
following outside diameter sizes:
6" -- #4 SEAMLESS APPLICATION
6
10-1/2", 12 1/4", 12 3/4" & 13 1/2" -- #3 SEAMLESS APPLICATION
(2)REQUIREMENTS:
GENERAL
2.1-Steel is ordered by specification number, which comprises the last
three digits of the Round Billet Number and refers to the "LPM Steel
Specification."
2.2-Heat chemistries shall be within limits specified as "Ladle Acceptance
Limits" on the Specification. Residual elements, not specified, shall be
kept as low as possible, consistent with sound steelmaking practices.
2.3-Heats with chemistries outside the "Ladle Acceptance Limits" and heats
or rounds violating any other specification requirement may be rejected by
Steelmaking or the Caster, or referred to Tubular Quality Assurance for
disposition.
IDENTIFICATION
2.4-6" ROUNDS-Each round shall be legibly paint stenciled on one end with
the heat number and round billet (RB) number specified on the requisition.
2.5-10-1/2", 12-1/4" , 12-3/4" & 13-1/2" ROUNDS-Each round shall be
legibly DOUBLE paint stenciled on one end with the heat number and round
billet (RB) number specified on the requisition.
DIMENSIONAL TOLERANCES
2.6- WEIGHT/LENGTH -- Rounds shall be ordered by length corresponding to
the required weight. Uniform round length is CRITICAL.
2.6.A- Orders in which short rounds cannot be accepted, shall be
identified by Business Planning on the requisition.
2.7-Final length tolerances are applicable for all rounds, regardless of
where the rounds are cut.
2.7.A-For #3 Seamless, see Table I.
2.7.B-For #4 Seamless, see Table II.
TABLE I
NO. 3 SEAMLESS MILL
10.5" Rounds -- +1"/-1" MAXIMUM VARIANCE FROM ORDERED LENGTH.
12.25"/12.75"/13.5" Rounds less than 13.5 foot mult lengths - +1"/-1"
12.25"/12.75"/13.5" Rounds equal to or greater than 13.5 foot mult lengths -
+2"/-1".
NOTE -- Short rounds may be shipped under the following guidelines:
GROUP A - ROUNDS BETWEEN 1% AND 7.5% SHORT OF ORDERED LENGTH.
Rounds shall be segregated, manifested as Group A Shorts, and shipped
separately. Manifests shall be faxed to #3 Hot Mill (3530), Lorain Business
Planning (3044), #3 Seamless Department Manager (3079) and LPM Accounting
(3266).
7
If Group A shorts exceed 10% of a heat, they shall be referred to LPM
Business Planning and the #3 Seamless Department Manager before shipping.
Rounds greater than 7.5% short shall NOT BE SHIPPED, they must be referred to
LPM Business Planning and the #3 Seamless Department Manager for acceptance or
rejection.
TABLE II
NO. 4 SEAMLESS MILL
ALL ROUND SIZES -- +2"/-0" MAXIMUM VARIANCE FROM ORDERED LENGTH.
NOTE: -- Short rounds may be shipped under the following guidelines:
GROUP A-- ROUNDS NO MORE THAN 20% OR 12 INCHES (WHICHEVER IS LESS) SHORT OF
ORDERED LENGTH.
Group A shorts shall be those billets intended for production of < or =2.875" OD
pipe.
GROUP B -- ROUNDS NO MORE THAN 10% OR 12 INCHES (WHICHEVER IS LESS) SHORT OF
ORDERED LENGTH.
Group B shorts shall be those billets intended for production of > 2.875" and <
or = 4.500" OD pipe.
Short Rounds intended for production of 4.875" OD pipe SHALL NOT BE SHIPPED
until referred to LPM Business Planning and the #4 Seamless Dent. Manager for
acceptance or rejection
Rounds shall be segregated, manifested as Group A or Group B shorts, and shipped
separately.
Monthly consumption of short rounds shall not exceed 0.75%.
2.8- OUTSIDE DIAMETER -- Average OD of any section of rolled rounds shall
not exceed +1/8"/- 0" and for cast rounds +1/8"/-1/8" from the ordered OD,
measured with a Pipe tape.
2.9- OVALITY (out of round) -- Maximum diameter minus minimum diameter of
any section (excluding flat spots and mechanical defects) shall not to
exceed:
6" Rounds -- 3/16"
10 1/2" Rounds -- 1/4"
12-1/4" & 12 3/4" -- 5/16"
13.5" -- 3/8"
2.10- STRAIGHTNESS -- All sizes, variance shall not exceed 1/2" per 5' of
length.
2.11- END SQUARENESS - Shall not exceed:
6" Rounds -- 1/4" From Perpendicular
10-1/2" Rounds -- 5/16" From Perpendicular
8
12-1/4" &12 3/4" -- 3/8" From Perpendicular
13 -1/2 -- 7/16" From Perpendicular
SURFACE CONDITION
2.12- Flat Spots -- Width shall not exceed Table 2 dimensions, with the
following aims Table 1, for maximum width based on round diameter. Flat
spots exceeding Table 2 limits, may be referred to the respective Hot Mill
management for acceptance.
TABLE 1 TABLE 2
------- -------
6" Rounds 1" 1 -3/4"
10-1/2" Rounds 1 -1/4" 2"
00-0/0" &00 0/0" 0 -0/0" 0"
00-0/0" 0 -0/0" 0 -0/0"
2.13- MECHANICAL DEFECTS -- The width to depth ratio for mechanical
defects such as gouges and roll marks, shall be at least 4 to 1. Defect
depth should not exceed:
Depth Width
----- -----
6" Rounds 1/16" 3/4"
10 1/2" Rounds 1/4" 1"
12-1/4" & 12 3/4" & 13 1/2 5/16" 1"
2.14- END CONDITION -- Ends shall be free from gouges and grooves. Torch
build-up (swarf) in excess of 1/4" thick on 6" rounds and 3/4" on 10.5"
and larger diameter rounds shall be considered rejectable. Rounds
exceeding these limits shall not be shipped until referred to the
respective operating department Department Manager for acceptance.
STEEL QUALITY
2.15- SURFACE -- Surface defects, such as seams, cracks, and laps shall be
minimized through sound steel-making, casting practices and rolling
practices.
2.16-INTERNAL -- Internal soundness and density shall be sufficient to
ensure uniformity of billet weight per unit length. Internal defects such
as inclusions, and porosity, shall be minimized through sound steel-making
and casting practices.
ROUNDS LOADING
2.17- Rounds shall be loaded in "clean" railroad cars. There should be no
scrap, bands, slag or other metallic scrap present. Cars should not have
holes in the flooring, and all sidewalls should be present, and stable as
applicable.
2.18- Rounds shall be loaded with the identification end facing east in
the railroad car. The following loading guidelines should be followed as
much as possible:
-- There should be at least a 4' space at the identification end of
each stacked pile of rounds within the car.
-- The stacked pile should not exceed the height of the car sidewalls.
-- The ends of the pile should be square, not staggered. The billets
should be parallel within the stack, not crooked or skewed.
9
2.19- The rounds in each pile shall be of the same heat and RB number,
with no more than three (3) heats of a single RB number and no more than
three (3) RB numbers of a single grade in one car.
DOCUMENTATION
2.20- Official tundish analysis shall be maintained in the Republic
computerized heat release system and on ladle analysis sheets maintained
by the Republic Technical Services Department. Certified test reports.
shall be required.
2.21- A billet manifest shall accompany each railroad car and accurately
identify the heat and RB number of all rounds loaded. Actual and manifest
round counts shall correspond.
2.22- Additional documentation, necessary to satisfy order requirements,
shall be reviewed with Republic personnel for approval, prior to order
entry.
NON-CONFORMANCES
2.23- SUPPLYING FACILITY -- Heats or rounds failing to meet quality or
specification requirements may be rejected by Republic, or referred to the
LPM Quality Assurance Department for disposition. Referrals should be made
during normal daylight working hours, whenever possible.
2.24- INCOMING INSPECTION -- Inbound rounds failing to meet quality
requirements on incoming inspection shall be subject to return to
Republic. All count or identification discrepancies shall be corrected or
resolved by Republic personnel in cooperation with LTC personnel and
documented prior to charging the rounds. Corrective action may be required
of Republic in cases of serious or repetitive nonconformances.
2.25- FINAL INSPECTION -- Rejected LPM Product attributable to supplied
steel or round quality, shall be reviewed with Republic personnel. Samples
shall be made available, as applicable. Corrective action may be required
of Republic in cases of serious or repetitive quality problems.
2.26- GENERAL-- The supplier shall maintain a system for the reporting of
defects and noncompliance discovered during the performance of services
performed for LPM.
2.26.A- This system for the reporting shall meet the intent of the
requirements and provisions of Title 10, Code of Federal
Requirements Part 21(10-CFR-21). Actual NRC notification shall be
conducted by USS Tubular Products.
(3) RESPONSIBILITIES
3.1-It shall be the responsibility of the REPUBLIC steel cast billet
facility to:
3.1.A- Use trained personnel to perform the services specified in
this requirement.
3.1.B- Generate and maintain documented procedures for the
production of steel cast billets, to ensure compliance with
applicable specifications and standards.
10
3.2-It shall be the responsibility of LPM DEPARTMENT MANAGER QUALITY
ASSURANCE to:
3.2.A- Maintain the requirements for steel cast billets
supplied to the LPM within the scope of this TQR.
3.2.B- Perform, through qualified auditors, audits of
Republic's billet supplying facilities.
3.2.C- Resolve all Heat and steel cast billet nonconformances
referred by the Republic steel cast billet testing facilities.
3.3-It shall be the responsibility of LPM to:
3.3.A-Utilize only approved steel cast billet facilities for the
supplying of steel furnished to the LPM.
11
