ex10-25_1337869.htm


  
    EXHIBIT
10.25

    

      REPLENISHMENT
AGREEMENT

      


      THIS REPLENISHMENT AGREEMENT
(“Agreement”) is made
and entered into as of the ____ day of November, 2008, by and between
Novamerican Steel Inc., a Delaware corporation with a principal place of
business at 1050 University Avenue, Norwood, MA  02062, and its
subsidiaries and affiliates (collectively, “Novamerican”) and
ArcelorMittal Dofasco Inc., a Canadian corporation with a principal place of
business at 1330 Burlington Street East, Hamilton, Ontario L8N 3J5, (“Supplier”).

       

      WHEREAS, Novamerican wishes to
purchase from Supplier certain hot rolled steel coils, as hereinafter defined,
and Supplier is willing to sell to Novamerican the hot rolled steel coils, all
upon the terms and conditions set forth in this Agreement.

       

      NOW, THEREFORE, in
consideration of the mutual agreements hereinafter set forth, the parties agree
as follows:

       

      1.  STRATEGIC
OBJECTIVES

       

      Novamerican
operates as “One Company,” with a companywide strategy focused on maximizing
throughput, that is, the rate at which the system generates cash through sales,
with the application of a precise operating methodology called The DecalogueTM.  The
DecalogueTM combines and deploys two management theories: Dr. Eliyahu Goldratt’s
Theory of Constraints and Dr. W. Edwards Deming’s Theory of Profound
Knowledge.  We have defined the internal constraint of our system in
Replenishment.  Accordingly, the speed and reliability of replenishing
our actual steel usage is critical. We have defined this operational process
with the appropriate statistical measures to monitor all necessary variation in
our system and with our key suppliers. This Replenishment Agreement establishes
ArcelorMittal Dofasco Inc. as a key supplier to us.

       

      This
strategy directs us to select dedicated suppliers for specific material flow and
commits our resources, primarily in marketing, sales, metallurgy and material
science and new product development, toward increasing sales of these materials
based on the most profitable mix possible. Thus, our key suppliers are committed
to grow with us.  We are quickly evolving into a much larger producer
and distributor of our own manufactured products and less of a general line
steel processor.  The strategy also directs us out of certain market
segments that are not conducive to fast and reliable
replenishment.  Our growth will result from both organic sales and
through acquisition of manufacturing companies that use steel primarily from our
selected group of base coils.  We prefer to pay a market-based price
(using a validated index).

       

      We
replenish based on actual usage of an already simplified, select group of
coils.  Our statistical analysis allows us to provide a most
predictable communication of our expected usage while providing daily updates of
actual usage as a basis for our daily reordering.  Our predictability
allows for the establishment of minimum order quantities.  We would
establish a committee with you that coordinates and directs our operational,
quality, metallurgical, sales and marketing resources for continued
simplification of the base coils and increased reliability and speed of
replenishment of these defined group of coils.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      2.  PRODUCT AND
SPECIFICATIONS

       

      
        	
                 
      

              	
                a.

              	
                Novamerican
      agrees to purchase from Supplier the following grades of UPC hot rolled
      coil (“Coil”):

              


      

       

      
        	
                 
      

              	
                1.

              	
                HR  Plate
      Grades ASTM A36 and CSA G40.21 44W &50W;
and

              


      

       

      
        	
                 
      

              	
                2.

              	
                HSS
      for structural tubing

              


      

       

      as set
out more specifically in the attached Product Schedules “A” and “B,”
respectively.

       

      
        	
                 
      

              	
                b.

              	
                Quality:  The
      Coils will conform to the ASTM, J403 or CSA standards, as applicable, for
      each coil grade supplied.

              


      

       

      
        	
                 
      

              	
                c.

              	
                Addition
      or Deletion of Coils to/from the Product Schedule: Supplier will allow the
      addition or deletion of purchased Coils as
  follows:

              


      

       

      
        	
                 
      

              	
                1.

              	
                Novamerican
      will notify Supplier of a Coil or Coils identified for deletion or
      obsolescence within Supplier’s established production planning
      timeframe.  Novamerican agrees to accept delivery of any such
      obsolete Coils within 30 days of notification from Supplier that such
      Coils are ready for delivery.

              


      

       

      
        	
                 
      

              	
                2.

              	
                Novamerican
      will notify Supplier of its intention to add a Coil or Coils to the
      Agreement.  Supplier agrees to accept additions provided they
      are within Supplier’s technical capabilities and meet Supplier’s quantity
      specifications set out in section 3
below.

              


      

       

      3.  NOVAMERICAN’S
PURCHASING COMMITMENT

       

      
        	
                 
      

              	
                a.

              	
                Quantity

              


      

       

      
        	
                 
      

              	
                1.

              	
                Novamerican’s
      order pattern is governed by the application of statistical process
      control.  Novamerican maintains a statistically derived buffer
      to minimize variation to both our customers and
  suppliers.

              


      

       

      
        	
                 
      

              	
                2.

              	
                Novamerican
      agrees to purchase from Supplier a minimum quantity of Coil per calendar
      quarter, as identified by the Aggregate Usage Control Chart, attached
      hereto as Schedule
      C, Lower Control Limit (“LCL”).  The
      quarterly minimum quantity will be provided 30 days prior to the
      initiation of this Agreement and 30 days prior to the beginning of each
      successive quarter.

              


      

       

      
        	
                 
      

              	
                3.

              	
                Novamerican
      will signal Supplier on a weekly basis the quantity and type of Coils used
      each week (“Weekly
      Usage”).  Novamerican agrees to purchase on a weekly
      basis Coils based on the Weekly Usage for the then-ending week (“Purchase Order”), for
      delivery 2 weeks (14 calendar days) after the date of the Purchase Order
      (“Delivery
      Date”).

              


      

       


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                b.

              	
                Reliability/Predictability

              


      

       

      
        	
                 
      

              	
                1.

              	
                Novamerican
      agrees that the quantity and type of Coils ordered by Purchase Order on a
      weekly basis will be reliable and predictable; that is, 98% of the weekly
      orders will be within the Upper Control Limit (“UCL”) and Lower Control
      Limit (“LCL”) of
      the Coil Consumption Control Chart for each Coil ordered.  The
      initial Coil Consumption Control Chart for each Coil is attached hereto as
      Schedule D (for
      CSA G40.21 44W &50W), Schedule E (for A36) and
      Schedule B (for
      HSS tubing).  Novamerican will provide Supplier with current
      Coil Consumption Control Charts on a weekly
  basis.

              


      

       

      
        	
                 
      

              	
                2.

              	
                The
      Coil Consumption Control Chart for each Coil will reflect Novamerican’s
      historical weekly usage of the Coil. This information will be sufficient
      to fulfill Supplier’s planning needs on an 8 week and 5 week
      basis.

              


      

       

      
        	
                 
      

              	
                3.

              	
                Novamerican
      agrees to accept delivery of all ordered Coils on the Delivery
      Date.

              


      

       

      4.  SUPPLIER
COMMITMENT

       

      
        	
                 
      

              	
                a.

              	
                Supplier
      agrees to deliver the purchased Coils on the Delivery Date and that such
      delivery time will be reliable.

              


      

       

      
        	
                 
      

              	
                b.

              	
                Supplier
      Reliability Requirements to
Novamerican

              


      

       

      
        	
                 
      

              	
                1.

              	
                Novamerican
      will monitor, using statistical process control (“SPC”), Supplier’s
      performance reliability, including reliability of (a) quantity, type and
      quality of Coils delivered (measured against Coils ordered) and (b)
      delivery time (“Delivery
      Control Chart”).  Novamerican will provide to Supplier
      the SPC charts on a weekly basis.

              


      

       

      
        	
                 
      

              	
                2.

              	
                Novamerican
      requires the delivery of the Coils to be reliable; that is, 98% of the
      deliveries will be within the UCL and the LCL of the Delivery Control
      Chart.

              


      

       

      5.  PRICE

       

      The price
for each Coil purchased will be the current published CRU price for the Coil on
the Delivery Date as follows:  The CRU published on or about the
second Wednesday of the month, will be the purchase price for a Coil effective
beginning on the Friday after the publication of the CRU and will remain the
effective purchase price until the Friday subsequent to the publication of the
CRU in the following month.  (As an example, the CRU price published
on or about September 10, 2008 will be the price for Coils delivered September
12, 2008 through October 9, 2008.  Similarly, the CRU price published
on or about October 8, 2008 will be the price for Coils delivered October 10,
2008 through November 13, 2008).  All purchases are in Canadian
dollars, and the noon exchange rate for Canadian dollars in relation to US
dollars, as published by the Bank of Canada, in effect on the date the CRU price
is published shall be used.  (As an example, the noon exchange rate as
published by the Bank of Canada on September 10th would
be used to calculate the effective Canadian dollar price for Delivery Dates
occurring

       


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      September12th through
October 9th, 2008.)
Non-routine, mid-month adjustments to the published CRU price will not
apply.

       

      Any and
all pricing extras are set out in Schedule F attached
hereto.

       

      6.  PAYMENT AND
DELIVERY TERMS

       

      
        	
                 
      

              	
                a.

              	
                Payment
      terms are 1⁄2% - 10 days or net 30 days from the Delivery
    Date.

              


      

       

      
        	
                 
      

              	
                b.

              	
                All
      Coils sold hereunder to Novamerican, FOB Seller’s plant, Hamilton,
      Ontario.

              


      

       

      7.  TERM AND
TERMINATION

       

      
        	
                 
      

              	
                a.

              	
                This
      Agreement will commence on January 1, 2009 or such earlier date as the
      parties mutually agree to and will remain in force and effect until
      terminated pursuant to the provisions of this
  Agreement.

              


      

       

      
        	
                 
      

              	
                b.

              	
                In
      the event that one party becomes subject to an Event of Default, as
      defined herein in the Additional Terms and Conditions Schedule G, this
      Agreement may be terminated by the non-defaulting party upon thirty (30)
      days’ prior written notice.

              


      

       

      
        	
                 
      

              	
                c.

              	
                This
      Agreement may be terminated by either party for convenience and without
      cause, upon not less than 6 months’ prior written
  notice.

              


      

       

      
        	
                 
      

              	
                d.

              	
                In
      the event that either party is in material breach of any term or condition
      of this Agreement, which is not cured within thirty (30) days written
      notice by the other party to cure such breach, the other party may, at its
      option, immediately terminate this
Agreement.

              


      

       

      8.  FORCE MAJEURE,
ALLOCATION OF SUPPLY

       

      
        	
                 
      

              	
                a.

              	
                Supplier
      agrees that it will not allocate its supply to Novamerican – that is, give
      Novamerican less than what it orders because Supplier is allocating supply
      among all its customers – unless a “force majeure” situation is declared,
      as defined in Schedule G.  For greater certainly, in a “force
      majeure” situation, Novamerican would accept an allocation of supply that
      is less than its ordered and committed purchase
  amount.

              


      

       

      9.  DOCUMENTS
INCORPORATED BY REFERENCE

       

      
        
          The
following schedules form part of this Agreement:

           

          
            	 
      	
                    Schedule A
    -

                  	
                    Product
      Schedule A (for HR Plate Grade ASTM A36 and CSA G40.21
      44W&55W)

                  


          

          


          
            	 
      	
                    Schedule B
    -

                  	
                    Product
      Schedule B (for HSS tube) and Initial Control Chart for HSS
      tube

                  


          

          


          
            	 
      	
                    Schedule C
    -

                  	
                    Aggregate
      Usage Control Chart

                  


          

          


          
            	 
      	
                    Schedule D
    -

                  	
                    Initial
      Coil Control Chart for CSA G40.21
44W&55W

                  


          

        

         

        

          
            
               


            

            
              4

              
                

              

            

            
               


            

          


          


          
            	 
      	
                    Schedule E
    -

                  	
                    Initial
      Coil Control Chart for HR Plate Grade ASTM
A36

                  


          

          


          
            	 
      	
                    Schedule F
    -

                  	
                    Pricing
      Extras

                  


          

          


          
            	 
      	
                    Schedule
      G -

                  	
                    Additional
      Terms and Conditions

                  


          

          


          
            	 
      	
                    Schedule
      H -

                  	
                    ArcelorMittal
      Dofasco Claims Management Policy

                  


          

          


        

      

      10.  AMENDMENT

       

      No
waiver, alteration or modification of the terms and conditions of this Agreement
shall be binding upon either party unless approved in writing by an authorized
representative of each party.

       

      11.  CONFLICT

       

      The use
of purchase orders, order acknowledgements or other documents by Novamerican or
Supplier, whether to commence an order, to confirm a purchase order, or
otherwise, shall not modify or supplement this Agreement in any respect, whether
or not signed by an authorized representative of the party, and the terms and
conditions of this Agreement will control and govern, notwithstanding any
conflicting or additional provision in any such document.  For greater
certainty and the removal of doubt, any printed term contained in any purchase
order or other form or document used or in any acknowledgment or other form or
other document used by the parties in relation to the rights and obligation
hereunder shall be null and void and of no force and effect, and this Agreement
will take precedence over and supersede any such terms.

       

      12.  ENTIRE
AGREEMENT

       

      This
Agreement and all the schedules attached hereto, including all the documents
incorporate by reference under section 9 above, shall constitute the entire
understanding of the parties concerning the subject matter hereof and cancels
and supersedes all previous agreements and understandings, oral or written,
between the parties with respect to the subject matter hereof.

       

      13.  COUNTERPARTS

       

      This
Agreement may be executed in any number of counterpart facsimiles. Each executed
counterpart shall be deemed to be an original. All executed counterparts taken
together shall constitute one agreement.

       

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized respective officers as of the day and year first above
written.

       

      NOVAMERICAN
STEEL
INC.                                                                                ARCELORMITTAL
DOFASCO INC.

       

      By: /s/ Corrado De
Gasperis                                                                                    
By: /s/ Brad
Davey

      Title:
Chief Executive
Officer                                                                                  
Title: Vice President – Sales & Marketing

       


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      SCHEDULE
A

      


      PRODUCT
SCHEDULE FOR HR PLATE GRADE ASTM A36 AND

      CSA
G40.21 44W & 55W

      


      
        
          	
                  Gauge

                	
                  Width

                	
                  Grade

                	
                  Weekly Sales

                	
                  Annual Sales

                
	
                  0.5

                	
                  48

                	
                  A36

                	
                  78,699

                	
                  2046.164

                
	
                  0.5

                	
                  60

                	
                  A36

                	
                  53,778

                	
                  1398.228

                
	
                  0.375

                	
                  48

                	
                  A36

                	
                  71,770

                	
                  1866.012

                
	
                  0.375

                	
                  60

                	
                  A36

                	
                  82,809

                	
                  2153.034

                
	
                  0.3125

                	
                  48

                	
                  A36

                	
                  24,333

                	
                  632.658

                
	
                  0.3125

                	
                  60

                	
                  A36

                	
                  36,091

                	
                  938.366

                
	
                  0.25

                	
                  48

                	
                  A36

                	
                  140,390

                	
                  3650.14

                
	
                  0.25

                	
                  60

                	
                  A36

                	
                  100,101

                	
                  2602.622

                
	
                  0.1875

                	
                  48

                	
                  A36

                	
                  33,263

                	
                  864.838

                
	
                  0.1875

                	
                  60

                	
                  A36

                	
                  29,922

                	
                  777.963

                
	 
      	 
      	
                  Total

                	
                  651,155

                	 
      
	 
      	 
      	
                  Weekly
      Tons

                	
                  326

                	 
      
	 
      	 
      	
                  Annual
      Tons

                	
                  16,930

                	 
      


        

      

      



      
        
          
             

          

           


        

        
          Schedule A - 1

          
            

          

        

        
           


        

      


      


      
        
          	
                  Gauge

                	
                  Width

                	
                  Grade

                	
                  Weekly Sales

                	
                  Annual Sales

                
	
                  0.1875

                	
                  48.000

                	
                  CSA
      G40.21 44/50W

                	
                  79,097

                	
                  2,057

                
	
                  0.2500

                	
                  48.000

                	
                  CSA
      G40.21 44/50W

                	
                  128,235

                	
                  3,334

                
	
                  0.3125

                	
                  48.000

                	
                  CSA
      G40.21 44/50W

                	
                  114,966

                	
                  2,989

                
	
                  0.3750

                	
                  48.000

                	
                  CSA
      G40.21 44/50W

                	
                  102,933

                	
                  2,676

                
	
                  0.5000

                	
                  48.000

                	
                  CSA
      G40.21 44/50W

                	
                  110,700

                	
                  2,878

                
	
                  0.1875

                	
                  60.000

                	
                  CSA
      G40.21 44/50W

                	
                  149,386

                	
                  3,884

                
	
                  0.2500

                	
                  60.000

                	
                  CSA
      G40.21 44/50W

                	
                  140,893

                	
                  3,663

                
	
                  0.3125

                	
                  60.000

                	
                  CSA
      G40.21 44/50W

                	
                  88,298

                	
                  2,296

                
	
                  0.3750

                	
                  60.000

                	
                  CSA
      G40.21 44/50W

                	
                  131,758

                	
                  3,426

                
	
                  0.5000

                	
                  60.000

                	
                  CSA
      G40.21 44/50W

                	
                  136,171

                	
                  3,540

                
	 
      	 
      	
                  Total

                	
                  1,182,438

                	 
      
	 
      	 
      	
                  Weekly
      Tons

                	
                  591

                	 
      
	 
      	 
      	
                  Annual
      Tons

                	
                  30,743

                	 
      


        

      

      



      
        
          
          

           


        

        
          Schedule A - 2

          
            

          

        

        
           


        

      


      SCHEDULE
B

      


      PRODUCT
SCHEDULE FOR HSS TUBE AND

      INITIAL
CONTROL CHART FOR HSS TUBE

      


      
        
          
            
              
                	
                        Gauge

                      	
                        Width

                      	
                        Grade

                      	
                        Weekly Sales

                      
	
                        0.0840

                      	
                        48.000

                      	
                        Nova
      Tube Mill (C1018)

                      	
                        129,899

                      
	
                        0.1100

                      	
                        60.000

                      	
                        Nova
      Tube Mill (C1018)

                      	
                        150,747

                      
	
                        0.1210

                      	
                        60.000

                      	
                        Nova
      Tube Mill (C1018)

                      	
                        100,000

                      
	
                        0.0840

                      	
                        49.600

                      	
                        Structural
      Tube (C1021)

                      	
                        162,350

                      
	
                        0.1100

                      	
                        54.250

                      	
                        Structural
      Tube (C1021)

                      	
                        262,178

                      
	
                        0.1100

                      	
                        47.250

                      	
                        Structural
      Tube (C1021)

                      	
                        377,280

                      
	
                        0.1210

                      	
                        57.250

                      	
                        Structural
      Tube (C1021)

                      	
                        134,247

                      
	
                        0.1210

                      	
                        52.000

                      	
                        Structural
      Tube (C1021)

                      	
                        318,168

                      
	
                        0.166

                      	
                        58.25

                      	
                        Structural
      Tube (C1021)

                      	
                        717,707

                      
	
                        0.166

                      	
                        52.6

                      	
                        Structural
      Tube (C1021)

                      	
                        226,644

                      
	
                        0.221

                      	
                        59.57

                      	
                        Structural
      Tube (C1021)

                      	
                        748,946

                      
	
                        0.221

                      	
                        58.56

                      	
                        Structural
      Tube (C1021)

                      	
                        132,167

                      
	
                        0.337

                      	
                        60

                      	
                        Structural
      Tube (C1021)

                      	
                        154,847

                      
	 
      	 
      	
                        Total

                      	
                        3,615,179

                      
	 
      	 
      	
                        Weekly
      Tons

                      	
                        1808

                      
	 
      	 
      	
                        Annualized
      Tons

                      	
                        93,995

                      


              

            

          

        

      

      



      
        
          
          

           


        

        
          Schedule B - 1

          
            

          

        

        
           


        

      

       

      


      

      


      

        
          
            
            

             


          

          
            Schedule B - 2

            
              

            

          

          
             


          

        

      

      

      


      

      


      

      
        
          
          

           


        

        
          Schedule B - 3

          
            

          

        

        
           


        

      

      

      


      

      


      

      
        
          
          

           


        

        
          Schedule B - 4

          
            

          

        

        
           


        

      


      SCHEDULE
C

      


      AGGREGATE
USAGE CONTROL CHART

      


      

      



      
        
          
          

           


        

        
          Schedule C - 1  

          
            

          

        

        
           


        

      


      SCHEDULE
D

      


      INITIAL
COIL CONTROL CHART FOR CSA G40.21 44W & 55W

      


      

      



      
        
          
             

          

           


        

        
          Schedule D - 1

          
            

          

        

        
           


        

      

      

      


      

      


      

      
        
          
            
            

             


          

          
            Schedule D - 2

            
              

            

          

          
             


          

        

      

      

      


      

      



      
        
          
             

          

           


        

        
          Schedule D - 3

          
            

          

        

        
           


        

      


      


      

      


      

      


      

      



      
        
          
             

          

           


        

        
          Schedule D - 4

          
            

          

        

        
           


        

      


      

      


      

      



      
        
          
             

          

           


        

        
          Schedule D - 5

          
            

          

        

        
           


        

      


      SCHEDULE
E

      


      INITIAL
COIL CONTROL CHART FOR HR PLATE GRADE ASTM A 36

      


      

      


      

      


      


      
        
          
             

          

           


        

        
          Schedule E - 1

          
            

          

        

        
           


        

      

      

      


      

       

      

      

        
          
            
               

            

             


          

          
            Schedule E - 2

            
              

            

          

          
             


          

        



      


       

       

      
        
          
            
               

            

             


          

          
            Schedule E - 3

            
              

            

          

          
             


          

        

      

      


      

      


      

       

      
 


      
        
          
             

          

           


        

        
          Schedule E - 4

          
            

          

        

        
           


        

      


      SCHEDULE
F

      


      Pricing
Extras

      


      
        


        
          
            
              
                	
                        GRADE

                      	 
      	
                        Cdn$/cwt

                      
	 
      	 
      	 
      
	
                        Commercial
      Steel (CS Types A, B or C)

                      	
                        $0.00

                      
	 
      	 
      	 
      
	 
      	
                        1006
      – 1009

                      	
                        $0.00

                      
	 
      	 
      	 
      
	 
      	
                        1010
      – 1016

                      	
                        $1.50

                      
	 
      	 
      	 
      
	 
      	
                        1017
      – 1023

                      	
                        $0.50

                      
	 
      	 
      	 
      
	
                        Drawing
      Steel (DS Type A or B)

                      	
                        $0.60

                      
	 
      	 
      
	
                        Deep
      Drawing Steel (DDS Type A or B)

                      	
                        $2.25

                      
	 
      	 
      
	
                        Structural
      Steel (SS Grade 33,3 6, 40)

                      	
                        $0.50

                      
	 
      	 
      
	
                        Conversion
      to Plate A36, 44W, 50W

                      	
                        $0.50

                      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                        HSS Tubing

                      	 
      
	 
      	 
      
	
                        CSA
      350W and A500 specs

                      	
                        $0.50

                      


              

            

          

        

        


      

      


       


      
        
          
             

          

           


        

        
          Schedule
F - 1

          
            

          

        

        
           


        

      


      SCHEDULE
G

       

      ADDITIONAL TERMS &
CONDITIONS

       

      1.           Payment
shall be due 1⁄2% - 10 days or net 30 days from the Delivery Date.  All
payments shall be made in Canadian dollars at Hamilton, Ontario,
Canada.  Unless otherwise restricted by applicable law, Supplier shall
be entitled to charge interest at a rate per annum equal to the Bank of Nova
Scotia prime lending rate (being the variable per annum reference rate of
interest, as announced and adjusted by that bank from time to time, for loans
made by that bank in Canada in Canadian dollars) in effect from time to time
plus 1%, payable on demand, if Novamerican is in default in payment for any
prior invoice; provided, however, that payments received within 35 days of the
Delivery Date will not be considered in default of these payment
terms.

       

      2.           In
addition to the purchase price, Novamerican shall pay Supplier the amount of all
taxes, excises or other governmental charges (except taxes on or measured by net
income) that Supplier may be required to pay with respect to the production,
sale or transportation of any products delivered under this Agreement, except
where the law otherwise provides.

       

      3.           The
amount of credit required under this Agreement is subject to review by
Supplier’s credit department on a quarterly/semi-annual/annual
basis.  Novamerican shall provide to Supplier its financial statements
as may be requested from time to time in order for Supplier to determine the
credit worthiness of Novamerican.  Supplier reserves the right to
determine, in its sole discretion, the amount of credit that it will extend
under this Agreement; provided, however, that Supplier provides Novamerican with
14 days prior notice of any reduction in credit.

       

      4.           Title
to and risk of loss of or damage to products sold, FOB Supplier’s plant, shall
pass to Novamerican upon delivery by Supplier to a carrier for transportation to
Novamerican.  Title to and risk of loss of or damage to products sold,
FOB destination, shall pass to Novamerican upon arrival at the destination
specified and charges at destination for spotting, switching, handling, storage,
demurrage and other accessory services shall be of Novamerican’s
account.

       

      5.           All
products priced at point of shipment must be accepted for shipment within a
specified period of time after the Delivery Date.  The specified
period of time for each product and the rates of storage charges which may be
imposed on any such products not accepted for shipment within such period will
be those from time to time shown on Supplier’s price lists or otherwise
communicated to Novamerican.

       

      6.           For
all products priced at point of shipment, the placement, securing and covering
of loads is the responsibility of Novamerican and its carrier.  For
such products, unless Supplier also acts as carrier (in which case Supplier’s
liability is limited to, at Supplier’s option, replacement of lost or damaged
products or refund of the invoice price and transportation charges paid to
Supplier), Supplier shall not be responsible for any liability, loss, costs,
damages, claims or expenses resulting from the failure to properly secure and
place a load or the failure to keep all products clean, dry and covered during
shipment and Novamerican agrees to indemnity and save harmless Supplier from and
against any such liability, loss, costs damages, claims and
expenses.

       


      
        
          
             

          

           


        

        
          Schedule G - 1

          
            

          

        

        
           


        

      


      7.           (a)
Supplier warrants that the products delivered hereunder will conform to the
applicable ASTM or CSA standards and specifications for such type and grade of
Coil, subject to the conditions of clause (b) below, and will be adequately
contained, packaged and labeled.

       

      (b) Unless otherwise specified herein,
any dimensions referred to herein are nominal and Supplier will furnish products
within its standard tolerances.

       

      (c )  THERE ARE NO EXPRESS WARRANTIES BY
SUPPLIER OTHER THAN THOSE SPECIFIED IN THIS PARAGRAPH 7.  NO
WARRANTIES BY SELLER (OTHER THAN WARRANTY OF TITLE) SHALL BE IMPLIED OR
OTHERWISE CREATED AT LAW OR IN EQUITY, INCLUDING, BUT NOT LIMITED TO, WARRANTY
OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.

       

      Without
limiting the generality of the foregoing, Novamerican assumes all risk and
liability for the results obtained by the use of any products delivered
hereunder in combination with other articles or materials or in the practice of
any process, in each case whether or not the products sold hereunder were
selected or used in accordance with any recommendations assistance or
instructions of Supplier.

       

      8.           Supplier
will, at its option, repair or replace (at the delivery point specified) any
product sold hereunder which fails to conform to any specifications expressly
agreed to in writing by Supplier, or refund to Novamerican the invoice price
(including transportation charges forming part of the invoice price) paid by
Novamerican for such product.

       

      EXCEPT
AS AFORESAID, SUPPLIER SHALL NOT BE LIABLE IN CONTRACT, TORT OR OTHERWISE FOR
ANY LOSS, DAMAGES, COSTS, CLAIMS, EXPENSES OR REPAIRS RESULTING FROM ANY SUCH
DEFECT OR FAILURE TO CONFORM TO SPECIFICATIONS OR ANY BREACH HEREOF RELATING TO
THE QUALITY OF THE PRODUCT WHETHER SUCH DAMAGES ARE DIRECT, INDIRECT OR
CONSEQUENTIAL. SUPPLIER’S LIABILITY HEREUNDER SHALL BE LIMITED, IN ALL
CIRCUMSTANCES, TO THE INVOICE PRICE PAID BY NOVAMERICAN FOR THE PRODUCTS
PURCHASED HEREUNDER. THE FOREGOING LIMITATION OF LIABILITY IS A CONDITION OF
SALE OF THE PRODUCTS AT THE PRICE OR PRICES PAID AND SHALL APPLY NOTWITHSTANDING
ANY DEFECT IN OR FAILURE OF, INCLUDING TOTAL FAILURE OF, ANY
PRODUCT.  SUPPLIER SHALL NOT IN ANY CIRCUMSTANCES BE LIABLE FOR ANY
CLAIM UNLESS (A) SUCH CLAIM IS MADE PROMPTLY FOLLOWING DELIVERY OF THE PRODUCT
AND, IN ANY EVENT, NOT LATER THAN 6 MONTHS AFTER DELIVERY, AND (B) SUPPLIER IS
GIVEN A REASONABLE OPPORTUNITY TO INVESTIGATE SUCH CLAIM AND SUCH
PRODUCT.

       

      Products
shall not be returned without Supplier’s permission.

       

      


       


      
        
          
          

           


        

        
          Schedule G - 2

          
            

          

        

        
           


        

      


      9.           Any
and all claims issued hereunder, by either party, shall be subject to the
ArcelorMittal Dofasco Management Claims Policy, attached hereto as Schedule
H.

       

      10.           Neither
party shall be liable for its delay or failure in performing hereunder due to
contingencies beyond its reasonable control, including, without limitation, acts
of God, fires, floods, war, sabotage, accidents, labor disputes or shortages,
governmental laws, ordinances, rules and regulations, whether valid or invalid
(and including, but not limited to, import or export prohibitions or
limitations, priorities, requisitions, allocations and price adjustment
restrictions) and inability to obtain material, equipment or transportation, and
any other similar or dissimilar contingency. The party whose performance is
prevented by any such contingency shall give written notice to that effect to
the other party within ten (10) days after such contingency shall have commenced
together with a statement setting forth reasonably full particulars concerning
the contingency and shall use all possible diligence to remedy the contingency
as quickly as possible.  The party whose performance is prevented by
any such contingency shall have the right to omit during the period of such
contingency, all or any portion of the quantity deliverable during such period,
whereupon the total quantity delivered to Novamerican hereunder shall be reduced
by the quantity so omitted.  In the event of any such contingency,
Supplier has the right to allocate its available supply among its customers in
such manner as the Supplier deems fair and equitable.  In no event
shall Supplier be obligated to purchase material from other than its regular
sources of supply in order to enable Supplier to supply products to
Novamerican.  The requirement that the contingency be remedied with
all possible diligence shall not require the settlement of strikes, lockouts or
other labor difficulties.

       

      


      11.           ALL CONTRACTS BETWEEN NOVAMERICAN AND
SUPPLIER FOR THE SALE AND PURCHASE OF ANY PRODUCTS SHALL BE DEEMED TO HAVE BEEN
MADE IN HAMILTON, ONTARIO, CANADA AND THE VALIDITY, INTERPRETATION AND
PERFORMANCE OF THE TERMS OF THIS AGREEMENT WITH RESPECT TO ANY PRODUCT DELIVERED
HEREUNDER SHALL BE GOVERNED BY THE LAWS IN EFFECT IN THE PROVINCE OF
ONTARIO.

       

      In case
of any ambiguity or difference between the English and French versions of these
Terms and Conditions, the English version shall govern.

       

      12.           The
United Nations Convention on Contracts for the International Sale of Goods shall
not apply to this Agreement.

       

      13.           This
Agreement shall be binding upon, and inure to the benefit of, the parties and
their respective successors and permitted assigns. Nothing contained herein
shall be deemed to create any third party beneficiary rights in any person or
entity not a party to this Agreement, other than subsidiaries and affiliates of
the parties as expressly provided herein.  No assignment or transfer
of this Agreement, or of any rights or obligations hereunder, may be made by
either party without the prior written consent of the other party; provided,
however, that either party may assign its rights and obligations under this
Agreement to any parent company or controlled subsidiary of any parent company
upon 60 days’ written notice to the other party.  For purposes of this
paragraph, “control” shall be defined to mean ownership in excess of fifty
percent (50%).  Any attempted assignment without the required consent,
if any, shall be void.

       


      
        
          
          

           


        

        
          Schedule G - 3

          
            

          

        

        
           


        

      


      14.           The
provisions of this Agreement will be enforceable to the fullest extent
permissible under applicable law, and the unenforceability (or modification to
conform to law) of any provision will not render unenforceable or impair the
remainder of this Agreement.  If any provision will be found invalid
or unenforceable, in whole or in part, this Agreement will be considered amended
to delete or modify, as necessary, the offending provision or provisions and to
alter its bounds to render it valid and enforceable.

       

      15.           All
notices permitted or required to be given hereunder shall be in writing and sent
by reputable overnight carrier or registered or certified mail, return receipt
requested, postage prepaid, addressed to the receiving party at its address set
forth below.  Any party may change its address for such purpose by
giving written notice to the other party of such change.

       

      If to
Novamerican:              
Novamerican Steel Inc.

      1050 University Avenue

      Norwood,
MA  02062

      Attention:  General
Counsel

      Fax:  781-486-9120

      


      If to
Supplier:                       ArcelorMittal
Dofasco Inc.

      P.O. Box 2460

      1330
Burlington Street East

      Hamilton, Ontario

      L8N 3J5

      Attention: Legal Counsel

      Fax: 905-548-3426

      


       

      16.           Any
waiver of, or consent to depart from, the requirements of any provision of this
Agreement shall be effective only if it is in writing and signed by the party
giving it, and only in the specific instance and for the specific purpose for
which it has been given.

      


      No
failure on the part of any party to exercise, and no delay in exercising, any
right under this Agreement shall operate as a waiver of such right. No single or
partial exercise of any such right shall preclude any other or further exercise
of such right or the exercise of any other right.

      


      Either
party may waive in writing, in whole or in part, performance by the other party
of any of the other party’s obligations, undertakings, covenants or warranties
contained herein.  No such waiver shall in any way affect the right of
the party granting the waiver from subsequently enforcing the same obligations,
undertakings, covenants or warranties nor shall any such waiver be taken or held
to be a waiver of any further breach of any obligations, undertakings,
covenants, or warranties.

       

      17.           The
terms of paragraphs 7, 8 and 18 shall survive any termination or cancellation of
this Agreement, whether mutual or by either party and whether express or implied
(including without limitation as a result of breach of a fundamental term of
this Agreement).

       


      
        
          
          

           


        

        
          Schedule G - 4

          
            

          

        

        
           


        

      


      18.           For
purposes of this Agreement, an Event of Default in relation to a party means the
occurrence of one or more of the following circumstances:

       

      a.      failure
to perform or fulfill any obligation or condition of this Agreement to be
performed or fulfilled by such party, and such failure is not cured within
thirty (30) business days (or such longer period of time as is agreed by the
parties to be reasonably necessary to allow such party to perform or observe
such obligation) after written notice thereof is given by the other party;
or

       

      b.      failure
to make any payment when due hereunder, if such failure continues for thirty
(30) days after such payment was due, unless such payment is being actively
contested in good faith by the party; or

       

      c.      the
making of any general assignment or arrangement for the benefit of creditors,
the filing of voluntary or involuntary petition in bankruptcy by or against such
party under any bankruptcy law or similar proceeding, the appointment of a
trustee or receiver or the commencement of a similar proceeding to take
possession of, or the attachment or other judicial seizure of, substantially all
of such party’s assets, or the taking by such party of any action in furtherance
of the foregoing; or

       

      d.      an
order is made or a resolution is passed or a petition is filed by such party for
the liquidation, dissolution or winding –up of such party (other than a
corporate reorganization, recapitalization, realignment or restructuring
pursuant to Section 368 of the Internal Revenue code of 1986, as amended);
or

       

      e.      a
final, non-appealable, decision of any judicial, administrative, governmental
authority or other authority or arbitrator is made which enjoins or restrains,
or renders illegal or unenforceable, the performance or observance by such party
of this Agreement.

       

      19.           Each
party (the “INDEMNITOR”)
hereto shall defend, indemnify and hold harmless the other party and its
respective partners, and parents, subsidiaries, and affiliates and its
directors, officers and employees, (an “Indemnified Party”), from and
against any and all claims, demands, actions, cause of actions, losses, damage,
suits, liability and expenses (including, but not limited to, the cost of
defense, settlement and reasonable investigation and legal expenses), by
whomsoever and wherever made, connected with, caused by, relating to or arising
out of any and all claims for loss of or damages to property, injuries to or
death of any and all persons, caused by or resulting from:  any
misrepresentation or breach of this agreement; any breach or violation of any
applicable law; any negligence or willful misconduct of the Indemnitor, its
employees, contractors, subcontractors and/or agents.

      


      Neither
party shall be liable to the other for any special, incidental or consequential
damages, whether arising in contract, tort, strict liability, or in any other
cause of action whatsoever.  Said duties to indemnify, defend and hold
harmless shall survive the termination of this Agreement.

      



      
        
          
          

           


        

        
          Schedule G - 5

          
            

          

        

        
           


        

      


      Schedule
H

      


      
        	
                ArcelorMittal
      Dofasco

                Flat
      Carbon Steel

              	
                

              


      

      


      ARCELORMITTAL DOFASCO CLAIMS
MANAGEMENT POLICY

       

      INTRODUCTION

      


      This
general claims policy covers light flat rolled sheet products produced at alt
ArcelorMittal Dofasco flat rolled facilities, it covers the major points of a
claim policy but it does not intend to cover all circumstances that may arise.
ArcelorMittal Dofasco reserves the right to handle each claim individually,
based on the circumstances surrounding the claim in question. Customer order
information requirements, as listed below, including dimensions, flatness,
surface, coating weight, surface texture, and chemistry will be according to
customer specifications accepted by ArcelorMittal Dofasco in advance in writing,
and/or consistent with applicable ASTM specifications.

       

      ORDER INFORMATION AND
MEETING YOUR QUALITY NEEDS

       

      


      In our
continual effort to fully understand customers’ needs and resultant product
requirements, Customer Technical Service Managers are available to assist in
identifying the product attribute each order. ArcelorMittal Dofasco requires
specific information at the time of order placement for all products including
coils, sheets, and blanks. This helps to ensure that ArcelorMittal Dofasco
provides suitable performance in formability, weldability, flatness, surface,
and dimensions. More detailed characterization of all product attributes will
also help to reduce the number of quality rejections in your plant and
facilitate the resolution of any product claims that may arise. Clear
communication between ArcelorMittal Dofasco and our customers supports our
common goal of continuous improvement and ensures that products, as shipped from
ArcelorMittal Dofasco, meet your quality needs.

       

      In
compliance with ISO/TS 16949, we request that all orders include both end use
information and the corresponding product attribute requirements. Where multiple
end uses are involved for one order, the most critical end use should be
specified. If it is not possible to provide a specific end use, please ask the
ArcelorMittal Dofasco Customer Technical Service Manager to help assess the
appropriate product requirements for the order. Orders cannot be processed
without complete product information on the purchase order.

       

      
        The
following is a summary of information that is required on all flat rolled
purchase orders:

         

        
          
            	
                    1.

                  	
                    Customer
      sold to address

                  	
                    12.

                  	
                    Coating,
      if required

                  
	
                    2.

                  	
                    Requested
      ship to address

                  	
                    13.

                  	
                    Oiling

                  
	
                    3.

                  	
                    Product

                  	
                    14.

                  	
                    Chemical
      treatment, if required

                  
	
                    4.

                  	
                    Specification

                  	
                    15.

                  	
                    Mill
      edge or slit edge (Hot Rolled)

                  
	
                    5.

                  	
                    End
      use

                  	
                    16.

                  	
                    Requested
      coil weights

                  


          

        

      

       

      
 

      
        
          
             

          

           


        

        
          Schedule H - 1

          
            

          

        

        
           


        

      


       

      
        


        
          	
                  6.

                	
                  Size
      and gauge, including tolerances

                	
                  17.

                	
                  Testing
      requirements

                
	
                  7.

                	
                  Ordered
      quantity

                	
                  18.

                	
                  Packaging
      and loading instructions (including ID/OD)

                
	
                  8.

                	
                  Requested
      delivery date

                	
                  19.

                	
                  Carrier

                
	
                  9.

                	
                  Surface
      requirement

                	
                  20.

                	
                  Freight
      - prepaid/collect

                
	
                  10.

                	
                  Flatness
      requirement

                	
                  21.

                	
                  Tax
      exemption numbers

                
	
                  11.

                	
                  Surface
      finish, if applicable

                	 
      	 
      


        

         

      

      Similar
information is also required for non-flat rolled products.

      


      COIL QUALITY-
GENERAL

       

      ArcelorMittal
Dofasco is committed to ensuring that our products meet the quality needs of our
customers.

       

      Should
any problems arise in the use of our products, we request the
following:

       

      
        	
                1.

              	
                ArcelorMittal
      Dofasco must be provided with details of the problem and given a
      reasonable opportunity to investigate claims. Customers are advised to not
      return material to ArcelorMittal Dofasco unless authorized. Otherwise
      additional handling and freight charges could result. ArcelorMittal
      Dofasco Customer Technical Service Managers will investigate and report on
      the nature of the complaint relative to purchase order requirements and
      will recommend a suitable course of
action.

              


      

       

      Unauthorized
or unidentified deductions before a claim is dispositioned or settled
constitutes nonpayment with subsequent consequences, including, but not limited
to, credit hold, shipping hold, and loss of discount privileges.

       

      
        	
                2.

              	
                Steel
      determined to be unusable, because of mill related reasons, should be set
      aside for review with the appropriate ArcelorMittal Dofasco personnel.
      This includes blanks, cut lengths, coils or slit mults from coils. For
      coils or slit mults, a minimum of 10% of the coil must be processed before
      rejecting the entire piece.

              


      

       

      For Hot
Rolled Plain product which, by definition, is shipped without further
processing, the customer will also be expected to accept, without claim, a
maximum of 15 feet on either end of a coil that may exceed gauge or width
tolerances.

       

      If it is
confirmed that the problem is a result of faulty steel, our policy is to credit
based on the transaction price of the steel, plus freight
costs incurred in moving the steel from ArcelorMittal Dofasco to the customer’s
plant.

       

      SCRAP
CREDIT

       

      ArcelorMittal
Dofasco expects to recover the current market value for the scrap or coils if
the steel is not returnable. The market value will be based on the published
ArcelorMittal Dofasco scrap credit value for mill returns for the month in which
the claim is accepted by the ArcelorMittal Dofasco Technical Service
Manager.

       


      
        
          
          

           


        

        
          Schedule H - 2

          
            

          

        

        
           


        

      


      CONSEQUENTIAL
COSTS

       

      For
claims with merit, ArcelorMittal Dofasco will assume responsibility for the
value of the weight of the material involved, address other costs as outlined
below, and will not be liable for further consequential damages or other costs.
ArcelorMittal Dofasco will not honor sorting, sampling, storage, freight,
additional processing, consequential costs, administrative or replacement cost
unless pre-approved and allowed by ArcelorMittal Dofasco prior to incurring the
expense.

       

      COIL QUALITY - SPECIFIC
PRODUCT ATTRIBUTE POLICIES

       

      Following
are policies for the resolution of claims related to specific product
attributes. ArcelorMittal Dofasco’s Customer Technical Service Managers will
follow these policies in assessing the nature of the complaint and in
recommending a suitable course of action.

       

      PRODUCT SURFACE - GENERAL
SURFACE DESCRIPTORS

       

      ArcelorMittal
Dofasco employs state of the art manufacturing facilities and best in class
practices to produce products that meet the needs of our customers’ end use.
Understanding that some applications are more demanding than others, the typical
surface defects that may be encountered with each product (hot rolled, cold
rolled or coated) and surface category (standard, semi critical and critical)
are available for review through your Customer Technical Service
Manager.

       

      Definitions
of product surface have been classified into four categories:

       

      Standard - May contain,
surface defects that can be seen and felt but are not detrimental to the
structural integrity or manufacturability of the part. Should only be ordered
where appearance is not critical. Some Hot Rolled and Coated products may
contain break marks.

       

      Standard
surface pickled hot rolled products may contain stains that are the result of an
unplanned pickle line stoppage. Unplanned stops are inherent in continuous
Pickling operations and occur on less than 2% of all coils produced. When a line
stop happens, the stain will be isolated to a single section representing less
than 2% of the coil length (to a maximum of 50 feet). ArcelorMittal Dofasco will
accept a claim foi~ the length of material affected by the stain.

       

      If the
appearance of pickle line stop stains are not acceptable for the end use
application and if they cannot be isolated during the usage of the steel in the
stamping, blanking, cutting, tubing, rollforming or other steel consuming
processes, then we advise that Semi-Critical surface be ordered as this product
is free from pickle line stop stains. Please consult the ArcelorMittal Dofasco
Price Book for the applicable price extra for semi-critical
surface.

       

      Semi Critical - May contain
surface defects that do not affect formability or the application of surface
coatings. Some surface defects that can be seen are allowed. Defects may show
through paint as highlights.

       


      
        
          
             

          

           


        

        
          Schedule H - 3

          
            

          

        

        
           


        

      


      Critical - Surface should be
free of defects that might affect the uniform appearance of a
quality paint or an electrolytic coating. Defects may be seen but will not show
through paint.

       

      Auto Exposed - Auto exposed
criteria, developed with each OEM for each application.

       

      Please be
aware that price extras apply to the semi critical, critical and auto exposed
categories.

      


      FLATNESS

      


      The
ArcelorMittal Dofasco Flat Rolled Price Book offers a number of flatness options
according to product and price extra.

       

      The
flatness tolerance quoted is the maximum deviation from a horizontal flat
surface, as defined in the flatness tolerance tables of appropriate ASTM
specifications.

       

      For hot
rolled product, two exceptions exist - claims Will not be accepted for flatness
for non-tempered non-pickled hot rolled or heavy gauge pickled hot rolled over
025 inches in thickness. In both of these cases, the product is as produced from
the Hot Mill and no shape correction has been applied.

       

      MINIMUM CLAIM - SURFACE
DEFECTS (SEAMS, SLIVERS. HOLES, STAINS. ETC)

       

      When
coils or coil inspected cut lengths are ordered, it is to be expected that they
may contain some abnormal major surface imperfections and also more minor
imperfections than sheet inspected cut lengths. Coils and coil inspected cut
lengths may also contain pickle line welds and inner and outer coil wraps may be
damaged in handling.

       

      The
customer will be expected to accept, without claim:

       

      
        	
                 
      

              	
                •

              	
                The
      inside and outside wraps

              


      

       

      
        	
                 
      

              	
                •

              	
                Pickle
      Line welds unless specified ‘to be without
  welds’

              


      

       

      When
surface imperfections are encountered in parts, blanks or cut lengths from
inspected coils, the customer is expected to accept up to 2% by weight without
claim. It is the usual practice of customers to shear, blank or process at least 10% of any given coil
or bundle before rejecting an order to ensure that the condition is prevalent
throughout.

       

      For Hot
Rolled Plain product which, by definition, is shipped without further
processing, the customer will be expected to accept without claim, a maximum of
15 feet on either end of a coil that may exceed thickness or width
tolerances.

       

      RUST & STORAGE
STAINS

       

      It is
ArcelorMittal Dofasco’s standard practice to oil or chemically treat coiled
product. If required, ArcelorMittal Dofasco will produce dry product (no oil),
which can include Hot Roll pickled dry, Cold Roll dry and Coated unpassivated
dry. Prompt shipment when ready is particularly critical when material is
ordered dry. When the purchaser delays the shipment,

       


      
        
          
             

          

           


        

        
          Schedule H - 4

          
            

          

        

        
           


        

      


      ArcelorMittal
Dofasco assumes no responsibility for rusting or other surface contamination
resulting from such delay.

       

      The
following time limitations apply to all products delivered to and accepted by
the customer:

       

      
        	
                 
      

              	
                •

              	
                Dry
      - non oiled (Hot Roll, Cold Roll & Unpassivated Coated) - claims will
      not be accepted

              


      

       

      
        	
                 
      

              	
                •

              	
                Oiled
      - claims will
      not be accepted after 30 days of
shipment

              


      

       

      
        	
                 
      

              	
                •

              	
                Storage
      Stains - claims will not be accepted, after 3 months of
      shipment

              


      

       

      ArcelorMittal
Dofasco will not accept any rust claim for material shipped beyond the original
ship to destination.

       

      AGING

      


      For
Commercial Steel (CS) and Drawing Steel (DS), the aging phenomenon may exist,
especially on continuous annealed product. Over time, the effect of aging shows
up in two ways:

       

      
        	
                 
      

              	
                •

              	
                Higher
      hardness/poorer ductility on Commercial and Drawing type
      steels

              


      

       

      
        	
                 
      

              	
                •

              	
                Fluting
      or stretcher strain

              


      

       

      A certain
amount of cold work (roller leveling or temper rolling) will prevent these
conditions from occurring, but the effect is only temporary. It is necessary for
the user to effectively roller level immediately before use to eliminate the
straining or fluting effects of aging.

       

      Beyond 45
days from the shipment date, the effects of aging on product as shipped from
ArcelorMittal Dofasco, including loss of ductility and increased hardness, must
be accepted ‘by the customer. If necessary, ArcelorMittal Dofasco will examine
samples to verify that the appropriate steel was applied and properly
processed.

       

      TIME LIMITATION FOR
CLAIMS

       

      ArcelorMittal
..Dofasco will not accept claims after 6 months from the delivery
date.

       

      TRANSPORTATION
ISSUES

       

      For all
shipments, consignee is responsible for inspection and documentation of material
condition during receipt and unloading.

       

      Freight
damage that occurs when a load is shipped FOB “Mill” (Prepaid or Collect) to
the customer is not
the responsibility of ArcelorMittal Dofasco. Claims for product damaged in
transit must be processed through the carrier by the customer.

       

      Freight
damage that occurs when a load is shipped “FOB Customer” must be reported to
ArcelorMittal Dofasco within 24 hours of delivery.

       


      
        
          
             

          

           


        

        
          Schedule H - 5

          
            

          

        

        
           


        

      


      Consignee
is responsible for storing and protecting material from further deterioration
while claim is being resolved.

       

      SECONDARY
PRODUCT

       

      Secondary
product is sold on an “As Is” basis only, with no warranty whatsoever expressed
or implied. Furthermore, the stated specific reason a certain product or
material is classified as secondary may not always include all of the existing
imperfections in the product.

       

      CUSTOMER RESPONSIBILITIES
FOR PRODUCT RETURNS

       

      In order
to process claims efficiently, unauthorized returns will not be accepted. The
ArcelorMittal Dofasco Claim number, provided by your Technical Service Manager,
is your return authorization number.

       

      Returned
material should be repackaged in a manner to prevent damage and allow for safe
handling.

       

      ArcelorMittal
Dofasco’s minimum banding and packaging requirements are found in the Packaging
and Loading Manual on ArcelorMittal Dofasco’s website (link below).

       

      http://www.dofasco.ca/bins/content_page.asp?cid502-847-854

       

      Please
note that the Claim Number must be written clearly on the Bill of Lading
accompanying the return. As well, it must be clearly written on the outer wrap
or packaging of each returned coil, or on the top sheet of each returned
bundle.

       

      Product
that is rejected before receipt on the customer floor is classified as a
‘Customer Rejection’. Example reasons for customer rejections are wrong coil
shipments and customer-requested delivery error. For customer rejections, the
load will be received back at ArcelorMittal Dofasco with the original
ArcelorMittal Dofasco Bill of Lading. If the rejection was due to a customer
error, we require that the Bill of Lading be signed by an approved customer
representative before the load is returned to ArcelorMittal Dofasco. Without
this signature, the truck driver will be required to sign a liability waiver in
order to unload back at ArcelorMittal Dofasco. in cases where customer
rejections are due to transit damage, the truck driver will be required to sign
a waiver in order to unload the material at ArcelorMittal Dofasco.

       

      Customer
rejections or returns that are the result of a customer error will result in
charges by ArcelorMittal Dofasco to cover incurred freight costs.

       

      ArcelorMittal
Dofasco is only able to accept sheet product returns on Tuesdays and
Wednesdays.

       

      Any
challenges to this policy or its interpretation will be addressed with the
appropriate level of management by the Technical Service Manager, on behalf of
the customer.

       


      
        
          
             

          

           


        

        
          Schedule H - 6