Unassociated Document


    

      2007
        - 2008 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.

              	
                 
                  3

              
	
                1.2

              	
                Certain
                  Defined Terms.

              	
                 
                  3

              
	 	 	 
	
                ARTICLE
                  II - ROUND SALES

              	
                 
                  4

              
	
                2.1

              	
                Quantities.

              	
                 
                  4

              
	
                2.2

              	
                Prices.

              	
                 
                  5

              
	
                2.3

              	
                Orders.

              	
                 
                  7

              
	
                2.4

              	
                Payment.

              	
                 
                  8

              
	
                2.5

              	
                Delivery,
                  Title and Risk of Loss.

              	
                 
                  9

              
	
                2.6

              	
                Terms
                  and Conditions of Sale.

              	
                 
                  9

              
	
                2.7

              	
                Warranty.

              	
                10

              
	
                2.8

              	
                Cross
                  Default; Right of Set-off.

              	
                11

              
	
                2.9

              	
                Mill
                  Scale; Scrap.

              	
                11

              
	 	 	 
	
                ARTICLE
                  III - TERM AND TERMINATION

              	
                13

              
	
                3.1

              	
                Term.

              	
                13

              
	
                3.2

              	
                Termination.

              	
                13

              
	 	 	 
	
                ARTICLE
                  IV - MISCELLANEOUS

              	
                14

              
	
                4.1

              	
                Payment
                  Errors.

              	
                14

              
	
                4.2

              	
                Dispute
                  Resolution.

              	
                14

              
	
                4.3

              	
                Audit.

              	
                15

              
	
                4.4

              	
                Confidentiality.

              	
                15

              
	
                4.5

              	
                Severability.

              	
                17

              
	
                4.6

              	
                Rights
                  and Remedies; No Consequential Damages.

              	
                17

              
	
                4.7

              	
                Costs
                  and Expenses.

              	
                17

              
	
                4.8

              	
                Notices.

              	
                17

              
	
                4.9

              	
                Assignment.

              	
                18

              
	
                4.10

              	
                Counterparts.

              	
                18

              
	
                4.11

              	
                Entire
                  Agreement.

              	
                18

              
	
                4.12

              	
                Headings.

              	
                19

              
	
                4.13

              	
                Governing
                  Law.

              	
                19

              
	
                4.14

              	
                No
                  Third Party Rights.

              	
                19

              
	
                4.15

              	
                Waiver
                  and Amendments.

              	
                19

              
	
                4.16

              	
                Force
                  Majeure.

              	
                19

              
	 	 	 
	 	 	 
	
                SCHEDULE
                  A:

              	
                Prices

              	22
	
                SCHEDULE
                  B:

              	
                Seller’s
                  Standard Terms and Conditions of Sale

              	25
	
                SCHEDULE
                  C:

              	
                Weight
                  Calculation

              	28


      

      


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


      2007-2008
        ROUNDS SUPPLY AGREEMENT

      


      THIS
        2007-2008 ROUNDS SUPPLY AGREEMENT (“Agreement”) made and entered into on this
        22nd
        day of
        September 2006,
        with an effective date of January 1, 2007 (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 April 1, 2006 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 April 1, 2006 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 Mills 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 2002 Rounds Supply Agreements was extended and supplemented/amended by
        the
        parties several time, most recently by the 2006 Rounds Supply Agreement covering
        April 1, 2006 through December 31, 2006; 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 continued purchase of tubular rounds
        produced at REP’s Lorain Works facility through September 30, 2008, all upon and
        subject to the stated terms and conditions as herein provided; and 

      


      WHEREAS,
        this Agreement is being entered into in conjunction with the parties also
        entering into (i) an existing or new Coke Supply Agreement and (ii) an existing
        or new Pellet Supply Agreement covering (respectively) USS’s supply of coke and
        pellets to REP for use at its Lorain Works facilityto facilitate REP’s continued
        production and supply of rounds to USS under this Agreement.

      


      NOW,
        THEREFORE, Seller and Buyer have agreed and do 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 entered into effective
        of even
        date herewith by and between Seller and USS.

      


      “Late
        Payment Rate” means the prime interest rate as publicly announced by the Morgan
        Guaranty Trust Co. (or its successor) on the first business day of the month
        for
        each month throughout the period during which any amount is due and unpaid.
        

      


      “Lorain
        Tubular Operations” or “LTO” 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.


      


      “LTO
        Mills” means the LTO No. 3 Seamless Mill that utilizes Rounds that equals or
        exceeds 101⁄2 ” (OD) and the LTO No. 4 Seamless Mill that utilizes 6” (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 the Specifications 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.

      


      “Specification”
        means the TQR-09-02-LC, as the same may be amended from time to time by mutual
        agreement of the parties.


      


      “Tons,”
        “net ton” and “NT” each means 2,000 pounds avoirdupois in weight.

      


      ARTICLE
        II - ROUNDS SALES

      


      2.1 Quantities.

      


      (a) Subject
        to the terms hereof, during the term hereof, Seller agrees to sell, and Buyer
        agrees to buy Rounds for use at the Pipemill. Seller
        will sell and Buyer will buy 25,000 to 30,000 tons of tube rounds per 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: (i) 6 Inches; 101⁄2 Inches; 121⁄4
Inches, which are available monthly; (ii)131⁄2 Inches which are available on a
        semiannual basis or more often with the consent of Seller, which consent
        will
        not be unreasonably withheld; and (iii) 11 5/8 Inches upon request by Buyer
        as
        agreed by Seller; provided, however, that no greater than 50% 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.

      


      (b) If,
        during the term hereof, Seller agrees in good faith to cast and deliver volume
        (of Rounds) to Buyer in excess of the 30,000 tons, such increased volume
        at the
        prices set forth on Schedule A (unless another pricing arrangement is agreed
        to
        by both parties) shall be a binding commitment of Seller under this Agreement.
        In no event shall additional volume sold to Buyer in any month during the
        term
        hereof, constitute volume to be counted in any proceeding month (i.e. - no
        extra
        volume produced in a prior commitment period shall carry over to another
        commitment period for either the Buyer or the Seller). 

      


      (c) Seller
        shall pay to Buyer (as a credit or otherwise as agreed to by the Parties)
        a
        penalty of $50/ton for every ton that Seller fails to deliver under 75,000
        tons
        during any quarter hereunder unless such failure is due solely to the act
        or
        omission of Buyer). 

      


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


      	2.2  	
              Prices.

            


      


      (a) For
        all
        orders of Rounds placed hereunder (effective January 1, 2007), 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 Schedule A, which shall include an
        additional $15.00 per ton. 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 for coke and pellets as set forth in Article 2.2 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(s) paid by
        REP
        to USS under the Coke Supply Agreement from the price(s) being paid thereunder
        as of April 1, 2006, the Base Prices for Rounds shall be subject to adjustment
        (increase/decrease) according to the following formula:

      


      Coke
        Adjustment

      


      Increase/Decrease
        = .481 x .825 / .914 x (new coke price - old coke price)

      coke
        rate
        x hot metal factor x liquid to round yield x change in price.

      


      The
        above
        shall only apply when the price of the coke actually utilized to produce
        Rounds
        for the Buyer increases or decreases. The price of coke used for the production
        other than Rounds for the Buyer shall have no effect on Rounds pricing
        hereunder.

       

      	(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 April 1, 2006, the Base Prices for Rounds shall be subject to adjustment
        (increase/decrease) according to the following formula:


      


      Pellet
        Adjustment

      


      Increase/Decrease
        = (1.557 x .825 / .914 x (new WAC pellet price - old WAC pellet price) Pellet
        rate x hot metal factor x liquid to round yield x change in price.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      The
        above
        shall only apply when the price of the pellets actually utilized to produce
        Rounds for the Buyer increases or decreases. The price of pellets used for
        production other than Rounds for the Buyer shall have no effect on Rounds
        pricing hereunder.

      


      	(3)  	
              Alloy
                Adjustment

            


      


      The
        parties agree that the affected Base Prices for Rounds (i.e., the Melt Line
        Tubular Grades which require the use of alloying elements in their production)
        (“alloy Rounds”) shall be subject to adjustment (increase or decrease) on a
        monthly basis (i) for changes in the monthly average prices for Molybdenum,
        Chrome and Vanadium as shown in Platts Metals Week, and (ii) for such changes
        to
        Nickel based on the London Metals Exchange (“LME”) average. 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.

      


      	4)  	
              Natural
                Gas Adjustment

            


      


      A
        natural
        gas monthly surcharge will be billed monthly as a separate invoice using
        a base
        of $8.00 / MMBTU. The difference between the actual month cost and $8.00
        will be
        multiplied by 2.7 usage per ton, and this $8.00 base shall be subject to
        adjustment (increase or decrease) on a monthly basis (i) for changes in the
        monthly average prices of natural gas.

      


      To
        the
        extent practical, the adjustments for alloys and natural gas provided for
        hereunder shall not be added to or subtracted from the affected Base Prices
        for
        Rounds, but each adjustment shall be instead billed monthly on a separate
        invoice. .

      


      (b) 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 2006 and the 10th
        day of
        each succeeding month during the term hereof, Seller will furnish Buyer with
        Seller’s tentative schedule for producing the designated volume, as described in
        section 2.1, 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 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. 

      


      (c)
        Seller will only be required to produce a requested size of ordered Rounds
        twice
        per month per LTO 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. 

      


      (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 $10/ton; for one (1) heat,
        plus
        $35/ton. Such quantity extras where applicable shall be billed monthly on
        a
        separate invoice. 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.

      


      (f)  If
        for
        any reason Seller fails to produce items sufficient to fulfill a particular
        Rounds order as agreed upon and specified within the order, Seller shall,
        upon
        discovery, provide Buyer with immediate verbal notification (verbal/email)
        of
        such insufficient production, followed by written/email confirmation within
        a
        reasonable and practical time period after Seller’s discovery of the shortage.
        Notice pursuant to this Section 2.3(f) shall not be deemed of itself, a shortage
        subject to Section 2.1(c).

      


      (g)  Should
        Seller elect to curtail its Rounds production operations at any time prior
        to ,
        September 30, 2008, Seller must provide Buyer with at least twelve (12) months
        advance written notice of such intended curtailment. Should such a curtailment
        arise, Buyer and Seller will then work together in good faith during the
        twelve
        (12) month notice period to adjust the volume of Rounds to be supplied by
        Seller
        to Buyer for the balance of the contract, as well as in any transition period
        and/or extension of the Agreement made necessary due to the curtailment.
        Also,
        should such curtailment arise, in no event will Buyer be required to forecast
        more than two (2) months of supply in advance for Seller to melt and place
        into
        inventory for shipment to Buyer in later months (i.e. curtailment at any
        given
        time shall not be used by Seller to force Buyer to forecast further into
        the
        term than as provided in this Agreement). For the avoidance of doubt, under
        such
        a curtailment, Seller will pay Buyer the $50/ton penalty (for
        every
        ton under the minimum tonnage) per
        the
        provisions of Section 2.1 (c) herein. 

      


      (h)  Should
        Seller curtail its Rounds production operations at any time prior to September
        30, 2008as provided in subsection (g) hereof, Seller shall only be obligated
        to
        supply committed volume for specific requirements that are received from
        the
        Buyer at least thirty (30) days prior to the scheduled curtailment.


      


      (i)  Buyer
        shall provide Seller with at least thirty (30) days written notice of any
        planned outages at Lorain Pipe Mills. The notice requirement may be satisfied
        via the use of email. During any such timely noticed planned outage, Buyer
        may
        reduce its monthly requirement by up to twenty-five percent (25%) per week
        during such outage, and such reduction shall be for no longer than the period
        of
        the outage.


      


      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 Sunday to and including Saturday. On the Monday following
        each Settlement Period (the “Settlement Date”), Buyer shall provide to Seller a
        summary of all payments to be made on the Payment Date. The Payment Date
        for the
        Settlement Period shall be the Tuesday immediately following that Settlement
        Date (i.e. the next day) with payment to occur via wire transfer to occur
        simultaneously with Seller’s wire payment to Buyer for its purchase of Coke and
        Pellets from Buyer, subject to the following: If Seller does not send its
        wire
        payment on the wire due date or by the end of the following business day,
        Buyer’s Treasury Department, in its sole discretion may revert to first
        requiring confirmation of receipt of Seller’s payment prior to Buyer’s making
        its wire payment hereunder. 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.

      


      (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 Pipe mill (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 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 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) REP
        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.
        LTO
        will deal directly with Stein 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 LTO.
        

      


      (b) Vehicle
        Scrap.
        LTO
        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, LTO will load the Miscellaneous
                  Scrap
                  onto rail cars used to deliver the Rounds to LTO hereunder, at
                  which time
                  ownership of such Scrap shall pass to Republic, and LTO shall have
                  no
                  further claim, right, title, interest, obligation or liability
                  in, to or
                  in connection with such Scrap. Republic shall pay LTO for the
                  Miscellaneous Scrap based upon weight 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, LTO will load the Miscellaneous
                Scrap into scrap boxes (“Boxes”) provided and maintained by LTO. When a
                Box is full, LTO will arrange for delivery of such Box to Republic,
                with
                the costs of such delivery to be borne by LTO. Republic shall pay
                to LTO
                the amount set forth below for the Miscellaneous Scrap based on actual
                weight, as measured on the truck scales located at the Stein, Inc.
                Lorain,
                Ohio facility, with the costs of such weighing to be borne by LTO.
                Ownership of the Miscellaneous Scrap shall pass to Republic upon
                delivery
                of such Scrap to Republic, and LTO 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 LTO 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 $6.00 per Gross ton for
                  handling.

              


      

      


      
        	 	
                (iv)

              	
                LTO
                  agrees to prepare the Miscellaneous Scrap to lengths of approximately
                  5
                  feet or less, and will segregate carbon versus alloy wherever
                  possible.

              


      

      


      (d) LTO
        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 LTO
        by Republic under this Article 2.9 shall be paid as a credit taken by LTO
        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 LTO’s order acknowledgement and
IS
        SOLD AS IS, WITHOUT ANY WARRANTIES OR GUARANTEES WHATSOEVER.
        LTO
        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 and the rights and obligations of the parties incident thereto,
        shall
        be effective as of January 1, 2007 set forth in the preamble hereto and shall
        remain in full force and effect through September 30, 2008, 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 (iv) above, Buyer 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 Seller, Buyer may withhold and retain from
        time
        to time out of monies due Seller hereunder, amounts sufficient to fully
        reimburse and compensate Buyer for any loss or damage which it sustains,
        or may
        sustain, as a result of any default or any breach by Seller of any of the
        provisions of the Coke Supply Agreement, the Pellet Supply Agreement and/or
        the
        Service Agreement, or by reason of any other claims LTO 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 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), 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) year 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 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;

              


      

      


      
        	 	
                (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
        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.

      


      4.6 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.

      3770
        Embassy Parkway

      Akron,
        Ohio 44333  

      Attention:
        Vice President - Commercial

      Facsimile:
        (330) 670 - 7030

      


      If
        to
        Buyer:

      


      UNITED
        STATES STEEL CORPORATION

      Room
        2001

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      600
        Grant
        Street

      Pittsburgh,
        PA 15219 - 2800

      Attention:
        General Manager Tubular Products

      Facsimile:
        (412) 433-3993

      


      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 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. All Schedules 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      attached
        hereto and referenced hereby are incorporated by reference and made a part
        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.
        

      


      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

            


      


      


      


      IN
        WITNESS WHEREOF, this Agreement has been executed and delivered as of the
        date
        first written above.

      


      


      REPUBLIC
        ENGINEERED

      PRODUCTS,
        INC.

       

      By:/s/
        James T. Thielens, Jr.

      Name: James
        T.
        Thielens, Jr.  

      Title: V.
        P.
        Commercial 

       

      


      UNITED
        STATES STEEL

      CORPORATION

      


      By:/s/
        Leslie J. Broglie

      Name:
        Leslie J. Broglie 

      Title:
        General Manger Tubular Products