Exhibit 10.13
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
ROUNDS SUPPLY AGREEMENT
by and among
REPUBLIC ENGINEERED PRODUCTS, LLC
and
LORAIN PIPE XXXXX,
an unincorporated unit of the Tubular Products Division,
United States Steel Corporation
and
UNITED STATES STEEL CORPORATION
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS ................................................... 1
1.1 General. ...................................................... 1
1.2 Certain Defined Terms. ........................................ 1
ARTICLE II - ROUND SALES .................................................. 2
2.1 Forecasts. .................................................... 2
2.2 Quantities. ................................................... 3
2.3 Prices. ....................................................... 4
2.4 Orders. ....................................................... 5
2.5 Payment. ...................................................... 6
2.6 Delivery, Title and Risk of Loss. ............................. 6
2.7 Terms and Conditions of Sale. ................................. 7
2.8 Warranty. ..................................................... 7
2.9 [***] ......................................................... 8
2.10 [***] ......................................................... 9
2.11 Mill Scale; Scrap. ............................................ 9
ARTICLE III - TERM AND TERMINATION ........................................ 11
3.1 Term. ......................................................... 11
3.2 Termination. .................................................. 12
ARTICLE IV - MISCELLANEOUS ................................................ 12
4.1 Intent of Agreement. .......................................... 12
4.2 Payment Errors. ............................................... 12
4.3 Dispute Resolution. ........................................... 13
4.4 Audit. ........................................................ 13
4.5 Confidentiality. .............................................. 14
4.6 Severability. ................................................. 15
4.7 Rights and Remedies; No Consequential Damages. ................ 15
4.8 Costs and Expenses. ........................................... 15
4.9 Notices. ...................................................... 15
4.10 Assignment. ................................................... 16
4.11 Counterparts. ................................................. 17
4.12 Entire Agreement. ............................................. 17
4.13 Headings. ..................................................... 17
4.14 Governing Law. ................................................ 17
4.15 No Third Party Rights. ........................................ 17
4.16 Waiver and Amendments. ........................................ 17
4.17 Force Majeure. ................................................ 18
SCHEDULE A: Prices
SCHEDULE A - ANNEX: Price Adjustments
SCHEDULE B: Seller's Standard Terms and Conditions of Sale
SCHEDULE C: Weight Calculation
SCHEDULE D: TQR-09-02-XX
XXXXXX SUPPLY AGREEMENT
THIS ROUNDS SUPPLY AGREEMENT made effective as of August 16, 2002 (the
"Effective Date"), by and among REPUBLIC ENGINEERED PRODUCTS, LLC, a limited
liability company (hereinafter referred to as "Seller" or "Republic"), LORAIN
PIPE XXXXX, an unincorporated unit of the Tubular Products Division of United
States Steel Corporation ("Buyer" or "LPM") and UNITED STATES STEEL CORPORATION,
a Delaware corporation ("USS").
W I T N E S S E T H:
WHEREAS, Buyer desires 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 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 wish to enter into this Rounds Supply Agreement
(this "Agreement") setting forth, inter alia, the terms and conditions relating
to Seller's agreement to sell to Buyer, and Buyer's agreement to purchase from
Seller, Rounds (as defined herein), all upon and subject to the terms and
conditions as herein provided.
NOW, THEREFORE, Seller, Buyer and USS hereby agree as follows:
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 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 10 1/2 " (OD) and the LPM No. 4 Seamless Mill that utilizes 6"
(OD) Rounds.
"Pellet Supply Agreement" means the Pellet Supply Agreement 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 (and/or USS's orders, as the case may
be) as acknowledged by Seller hereunder. Such term also includes steel rounds of
the above described type and specifications that Buyer purchases from third
party sources of supply.
"RTI" shall mean Republic Technologies International, LLC. the prior owner
and operator of Lorain Works.
"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.
ARTICLE II - ROUNDS SALES
2.1 Forecasts.
During the term of this Agreement, Buyer will provide Seller with written
forecasts of the quantity of Rounds for which it anticipates placing orders
hereunder for the following periods at the stated intervals:
(a) An annual forecast of the quantity of Rounds desired for each calendar
year not later than October 1 immediately prior to the commencement of such
year; provided, however,
Page 2 of 18
that Buyer shall provide Seller with a supplement updating its annual forecast
if, at any time during the covered year, such forecast changes materially.
(b) A quarterly forecast of the quantity, by LPM Mill, of Rounds desired
for each month of the succeeding calendar quarter not later than 30 days prior
to the commencement of such quarter.
(c) It is understood that Buyer's forecasts provided in accordance with
this Section 2.1 are for the purpose of facilitating production, scheduling and
delivery of Rounds and are not binding upon Buyer.
2.2 Quantities.
(a) Subject to the terms hereof, Seller agrees to sell, and Buyer agrees
to buy Rounds for use at the Pipemill. During each calendar quarter that this
Agreement is in effect, Seller shall sell to Buyer and Buyer shall purchase from
Seller [***] of the first [***] Tons of Buyer's requirements for Rounds (which
requirements shall be determined on a consumption basis as provided in Section
2.2 (c) below) for use at the Pipemill during such calendar quarter, at the
price(s) (according to melt line of Rounds purchased) set forth in Section 2.3
"Prices" hereof; provided, however, that Seller shall not be obligated to supply
greater than [***] Tons of Rounds to Buyer in any single month.
(b) It is further agreed that during each calendar quarter that this
Agreement is in effect, Buyer shall have the right to purchase from third party
sources of supply (without obligation or liability to Seller) the following
quantities of Rounds for use at the Pipemill: (a) up to [***] of the first [***]
Tons of Buyer's requirements for Rounds, (b) all of Buyer's remaining
requirements for Rounds in excess of [***] Tons and (c) such quantity (or Tons)
of cover Rounds as are purchased by Buyer from third party sources pursuant to
Buyer's exercise of its cover rights under Section 2.8 "Warranty" of this
Agreement.
(c) For purposes of this Agreement, the parties agree that Buyer's
obligation to purchase [***] of the first [***] Tons of it's requirements for
Rounds during each calendar quarter from Seller shall be determined on a
consumption basis by combining the following tonnages during each quarterly
period: (a) the total Tons of Rounds purchased from Seller by Buyer and consumed
at the Pipemill, plus (b) the total Tons of Rounds in Buyer's inventory as of
the effective date of this Agreement that were purchased from RTI and consumed
by Buyer in the given quarter, plus (c) total Tons (if any) of cover Rounds
purchased by Buyer from third party sources and consumed at the Pipemill,
pursuant to Buyer's exercise of its cover rights under Section 2.8 "Warranty" of
this Agreement. Thus, Buyer's purchase obligation to Seller during each calendar
quarter hereunder shall be deemed satisfied where the sum of (a), (b) and (c) is
equal to (at least) [***] of the first [***] Tons of Buyer's requirements for
Rounds for the calendar quarter involved.
(d) Buyer may consume Rounds from a third party without violation of its
quarterly requirement obligations under Section 2.2(a) above during the term of
this Agreement in response to a reduction, loss or disruption of Rounds supply
from Seller, such as that caused by
Page 3 of 18
or resulting from an event of Force Majeure or a temporary or permanent
disruption, or shutdown of Rounds production operations at the Lorain Works.
(e) For purposes of verifying compliance with Buyer's purchase obligations
to Seller under this Section 2.2, Buyer shall provide to Seller a written report
covering consumption of Rounds for each calendar quarter during the term hereof,
setting forth the Tons of Rounds consumed at the Pipemill and further
identifying the quantity of such consumed Rounds and their source (i.e. Seller
or Third Party). For purposes of this Agreement, Rounds that were purchased from
RTI will be considered as Rounds supplied by Seller.
(f) In addition to the foregoing, USS may also purchase Rounds from Seller
meeting the Specifications at the prices set forth in Schedule A for use at
USS's Fairfield, Alabama pipemaking facility.
2.3 Prices.
(a) For all orders of Rounds placed hereunder, Buyer shall pay Seller
purchase prices equal to the prices set forth on Schedule A of this Agreement.
The listed prices, as adjusted in accordance with Schedule A - Annex, shall be
in effect through [***], subject to the following:
(i) [***]
(ii) [***]
(b) [***]
(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
Page 4 of 18
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.
2.4. Orders.
(a) The following procedures shall be used by the parties for ordering
Rounds:
(i) Rounds. (A) On or before the 10th day of each month during the
term hereof, Seller will furnish Buyer with Seller's tentative
schedule for producing Rounds for the next succeeding month,
based upon the forecasts provided by Buyer pursuant to Section
2.1; (B) after receipt by Buyer of Seller's schedule for
producing Rounds, Buyer shall, on or before the fifteenth day of
each such month, submit to Seller a forecast, by LPM Mill, 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 day prior to the scheduled 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. All
orders for Rounds that are received after the seventh day prior
to the scheduled date for the production of Rounds or, if
accepted, would cause the amount of Rounds purchased hereunder to
exceed [***] Tons in any given month (X) shall be subject to
acceptance or rejection by Seller, (Y) can be rejected by Seller
for any reason or no reason, and (Z) shall not be binding on
Seller until accepted.
(b) Within seven business days of Seller's receipt of any order from
Buyer, or prior to the scheduled date of production, whichever is earlier,
Seller shall email 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. If Seller has the right to reject such order pursuant to
Section 2.4(a), Seller will acknowledge in writing that that Seller rejects such
order.
(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.
Page 5 of 18
(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) Prices are based on minimum two-heat sequence per melt line per size.
Seller will agree to supply a maximum of [***] as single heats in any given
calendar quarter, not to exceed [***] in any single month (based upon single
heats ordered), at no additional charge. If the maximum levels stated above are
exceeded, the Buyer will be invoiced separately each calendar quarter an extra
for single heats of $[***] per ton for 6" Rounds and $[***] per ton for 10.5"
and larger Rounds. Buyer will pay the amount due under this subparagraph on the
next Payment Date as defined in Section 2.5 below.
2.5 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 Section 2.5(b) below.
(b) Subject to Section 2.10 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 [***] (the
"First Settlement Period") and the period from [***] ("the "Second Settlement
Period"). On the day following each Settlement Period (the "Settlement Date")
(i.e. [***]), 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 [***] and the Payment date for the Second
Settlement Period shall be on the immediately succeeding [***]. 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.
(c) For purposes of this Section 2.5, any and all references to Buyer
shall mean and include, as applicable, USS.
2.6 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
Section 2.6(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
Page 6 of 18
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.
(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 Section
2.6(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.
2.7 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 Section 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.
2.8 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.
Page 7 of 18
(c) When Rounds are supplied by Seller that are not in conformance with
the warranty set forth in Section 2.8.(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
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. In the event
Seller fails to correct the problem or provide Buyer such assurances during the
cure period, this Agreement shall continue with the Buyer's requirements to
purchase Rounds modified as set forth below until such time as Seller shall
again meet the quality and service criteria set forth herein.
(i) Buyer may purchase Rounds in the disqualified product line from
any third party supplier and the quantity of Rounds Buyer is
required to purchase from Seller under Section 2.2 above shall be
reduced by the quantity of Rounds Buyer purchases and consumes
from such third party.
(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.
(e) For purposes of this Section 2.8, any and all references to Buyer
shall mean and include, as applicable, USS.
2.9 [***]
Page 8 of 18
2.10 [***]
2.11 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 or in connection with such mill scale
generated by LPM.
Page 9 of 18
(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 Republic;
(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 LPM. 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 5' 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 5 feet or less, and will segregate carbon versus
alloy wherever possible.
(d) LPM will provide to Republic a monthly Metals Balance setting forth
quantity of scrap sold to Republic under this Sections 2.11(b) and (c). All
amounts payable to LPM by Republic under this Section 2.11 shall be paid as a
credit taken by LPM on a monthly basis against amounts due to Republic under
Section 2.5.
(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,
Page 10 of 18
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 date set forth in the
preamble hereto and shall remain in full force and effect through [***], unless
terminated earlier as follows:
(i) By written mutual consent of the parties at any time;
(ii) By either party if Seller permanently ceases production of
Rounds or Buyer ceases to operate the Pipemill; provided,
that Buyer or Seller, as the case may be, will give the
other immediate notice if it intends to cease, or
anticipates cessation of, such production or operations;
(iii) 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 60 days of written notice of such
default;
(iv) By Seller if Buyer at any time fails to make any payment
when due under the terms of this Agreement; or
(v) 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 (including without limitation 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 (including without limitation 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 Republic, LPM and/or USS may withhold and
retain from time to time out of monies due Republic 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 Republic of any of the provisions of the Coke Supply Agreement, the
Pellet
Page 11 of 18
Supply Agreement and/or the Service Agreement, or by reason of any other claims
LPM and/or USS may have against Republic 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 Sections 2.5,
2.8, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.13, 4.16 and this
Article III shall survive the termination of this
Agreement.
ARTICLE IV - MISCELLANEOUS
4.1 Intent of Agreement.
The parties hereto intend that they shall mutually benefit from the
terms, conditions and provisions of this Agreement and that no party shall be
either unreasonably enriched or unreasonably harmed by any implementation and/or
interpretation of said terms, conditions and provisions. This Agreement shall be
administered and interpreted in order to fulfill the intent stated in this
Section 4.1. Any arbitrator(s) considering disputes pursuant to Section 4.3
hereof shall attempt to render a decision which fulfills the intent stated in
this Section 4.1.
4.2 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.
Page 12 of 18
(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.
4.3 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 Section 4.9 hereof. It is mutually agreed that
any default by LPM or USS in its payment obligations hereunder (or any dispute
relating thereto), and/or any dispute relating to LPM's or USS's exercise of its
rights under Section 2.10 hereof shall not be subject to (and are excluded from)
the provisions of this Section 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.
4.4 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 Section 2.2
above. Such books and
Page 13 of 18
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.
4.5 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 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 may be, 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;
Page 14 of 18
(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 Section 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.
4.6 Severability.
In case any one 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 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.
4.7 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.
4.8 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.
4.9 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:
Page 15 of 18
If to Buyer:
LORAIN PIPE XXXXX
0000 Xxxx 00/xx/ Xxxxxx
Xxxxxx, Xxxx 00000
Attn: Manager, Lorain Tubular Operations
Facsimile: (440) 277 - 3265
If to Seller:
REPUBLIC ENGINEERED PRODUCTS, LLC
0000 Xxxxxxx Xxxxxxx
Xxxxx, Xxxx 00000
Attention: President & COO
Facsimile: (330) 670 - 7034
If to USS:
UNITED STATES STEEL CORPORATION
Room 2001
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Manager Tubular Products
Facsimile: (000)000-0000
or to such other address as hereafter shall be furnished as provided in this
Section 4.9 by either of the parties hereto to the other.
4.10 Assignment.
(a) Except as provided in Section 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 under this Agreement, and any
attempted assignment or delegation which is not permitted under Section 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 Section 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
Page 16 of 18
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.
4.11 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.
4.12 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.
4.13 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.
4.14 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.
4.15 No Third Party Rights.
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.
4.16 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 Section 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.
Page 17 of 18
4.17 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.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first written above.
REPUBLIC ENGINEERED PRODUCTS, LLC LORAIN PIPE XXXXX
By: /s/ X.X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
-------------- -------------------
Name: X.X. Xxxxx Name: Xxxx X. Xxxxxxx
Title: V.P., Integrated Supply Title: General Manger Tubular Products
Chain Management
UNITED STATES STEEL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: General Manger Tubular Products
Page 18 of 18
SCHEDULE A
TO
ROUNDS SUPPLY AGREEMENT
Rounds Pricing
[***]
SCHEDULE A-ANNEX
PRICE ADJUSTMENT FORMULA FOR ROUNDS
[***]
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 pay or 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 Section
2.4(c) of the Rounds Supply Agreement.
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 Section 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
2
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 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 constitute 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.
3
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 Application
10-1/2", 12 1/4", 12 3/4"&131/2" -- #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 *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
*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 Dept. Manager for
acceptance or rejection
**Greater than
* Less than or equal to
2
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
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"
12-1/4" &12 3/4" -- 1 1/2" 2"
13-1/2" -- 1 3/4 2 3/4
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 -- 3/16" 3/4"
10 1/2 " Rounds -- 1/4" 1"
12-1/4",12 3/4" & 13 1/2 -- 5/16" 1 1/4"
2.13.a-Burn throughs (localized areas where misaligned burning to
length has occurred) shall be prohibited when they exceed the
prescribed mechanical defect depth.
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
3
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.
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.
4
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.
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.
5
