Document:

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                                                                    Exhibit 10.6
                                                               EXECUTION VERSION

                                    AGREEMENT

                  THIS AGREEMENT is made as of April 22, 2003, by and between
International Steel Group Inc., a Delaware corporation ("ISG"), and the Pension
Benefit Guaranty Corporation, a United States government corporation and agency
of the United States ("PBGC").

                                    RECITALS

                  WHEREAS, Bethlehem Steel Corporation ("BSC") and certain of
its Affiliates (collectively, the "DEBTORS") on October 15, 2001 filed voluntary
cases for reorganization (the "BANKRUPTCY CASES") under Chapter 11 of the
Bankruptcy Code, 11 U.S.C. Sections 101-1330 (the "BANKRUPTCY CODE"); and

                  WHEREAS, the PBGC has filed an action seeking termination of
the Pension Plan of Bethlehem Steel Corp. & Subsidiary Companies (the "PENSION
PLAN"); and

                  WHEREAS, each member of the Bethlehem Group, including the
Non-Debtor Sellers, is jointly and severally liable for the Pension Plan's
unfunded benefit liabilities under Title IV of ERISA; and

                  WHEREAS, Bethlehem and certain Affiliates, including the
Non-Debtor Sellers, have agreed to sell the Acquired Assets specified in the
Asset Purchase Agreement to ISG Acquisition Inc. ("BUYER"); and

                  WHEREAS, the PBGC filed an objection (the "OBJECTION") to the
consummation of the transactions contemplated by the Asset Purchase Agreement
(the "ISG SALE"); and

                  WHEREAS, the Consideration Shares may constitute part of the
consideration paid by Buyer for the Acquired Assets as specified in the Asset
Purchase Agreement; and

                  WHEREAS, the Asset Purchase Agreement provides as a condition
to the closing of the purchase of the Acquired Assets by Buyer that the PBGC
shall have given a release of certain claims; and

                  WHEREAS, ISG has offered the PBGC the Note in consideration
for the ISG Release and BSC Release; and

                  WHEREAS, the PBGC has concluded that, by agreeing to receive
the Note in consideration for the ISG Release and BSC Release, the amount
realizable by the PBGC from the assets covered by the ISG Release and BSC
Release will be increased and the ultimate collection of the amounts owed under
Title IV of ERISA with respect to the Pension Plan will be facilitated;

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:

         I.       DEFINITIONS

                  As used in this Agreement, the following terms shall have the
meaning set forth below:

                                                            Settlement Agreement
<PAGE>

                  A.       "ACQUIRED ASSETS" means the assets of BSC and certain
Affiliates, as set forth in Section 1.1 of the Asset Purchase Agreement, which
are to be purchased, sold, conveyed, assigned or otherwise transferred pursuant
to the Asset Purchase Agreement.

                  B.       "AFFILIATE" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under direct
or indirect common control with such Person.

                  C.       "AGREEMENT" shall mean this Agreement and all of its
Exhibits, by and between ISG and the PBGC.

                  D.       "ASSET PURCHASE AGREEMENT" means the agreement, dated
as of March 12, 2003, by and among BSC, certain Affiliates of BSC, Buyer and
ISG. A copy of the Asset Purchase Agreement is attached hereto as Exhibit E.

                  E.       "BETHLEHEM GROUP" shall mean each Person that is a
member of the Controlled Group of which BSC is a member as of the date the
Bankruptcy Cases were filed.

                  F.       "BSC RELEASE" means a duly executed release
substantially in the form of Exhibit B attached hereto.

                  G.       "CLAIM" means all rights, claims, causes of action,
defenses, debts, demands, damages, obligations, and liabilities of any kind or
nature under contract, at law or in equity, known or unknown, contingent or
matured, liquidated or unliquidated, and all rights and remedies with respect
thereto, including, without limitation, causes of action arising under chapter 5
of the Bankruptcy Code or similar state statutes.

                  H.       "CONSIDERATION SHARES" shall mean shares of ISG Class
B Common Stock (as defined in the Asset Purchase Agreement) that constitute a
portion of the consideration for the Acquired Assets, as specified in Section
2.2(d) of the Asset Purchase Agreement.

                  I.       "CONTROLLED GROUP" shall have the meaning ascribed
thereto under Section 4001(a)(14) of ERISA.

                  J.       "EFFECTIVE DATE" shall mean the Closing Date as
defined in Section 3.1 of the Asset Purchase Agreement.

                  K.       "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. Sections 1001 et seq., and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of ERISA
shall be construed to refer to any successor sections.

                  L.       "INTERNAL REVENUE CODE" means the Internal Revenue
Code of 1986, as amended, 26 U.S.C. Sections 1, et seq., and any successor
statute of similar import, together with regulations thereunder, in each case as
in effect from time to time. References to sections of the Internal Revenue Code
shall be construed to refer also to any successor sections of similar import.

                  M.       "ISG RELEASE" means a duly executed release
substantially in the form of Exhibit A attached hereto.

                  N.       "JOINT VENTURES" means the Persons so defined in
Section 12.1 of the Asset Purchase Agreement.

                                                            Settlement Agreement

                                      -2-
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                  O.       "LIEN" means any mortgage, pledge, security interest,
encumbrance, lien (statutory or other), conditional sale agreement, claim or
liability.

                  P.       "NON-DEBTOR SELLERS" means Persons defined as Sellers
in Section 12.1 of the Asset Purchase Agreement that are not Debtors under the
Bankruptcy Cases.

                  Q.       "NOTE" means a duly executed promissory note
substantially in the form of Exhibit C attached hereto.

                  R.       "PERSON" means any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or Governmental entity.

                  S.       "REGISTRATION RIGHTS AGREEMENT" means a duly executed
agreement substantially in the form of Exhibit D attached hereto.

         II.      ISG'S OBLIGATIONS

                  A.       On the Effective Date, ISG shall deliver the Note and
the Registration Rights Agreement to the PBGC.

                  B.       If the Consideration Shares are not delivered to the
general unsecured prepetition creditors of BSC prior to July 1, 2004, or if an
Alternative Plan (as defined in Section 5.7(d) of the Asset Purchase Agreement)
(the "ALTERNATIVE PLAN") is confirmed, then, not later than July 10, 2004 or
within 10 days after the confirmation of the Alternative Plan, as the case may
be, ISG shall deliver to the PBGC the number of shares of ISG Class B Common
Stock having an aggregate value of $11,250,000, which represents 75% of the
aggregate value of the Consideration Shares to be delivered to BSC in connection
with the consummation of the transactions contemplated by the Asset Purchase
Agreement (the "REPLACEMENT SHARES").

         III.     PBGC'S OBLIGATIONS

                  A.       The PBGC shall immediately withdraw its Objection to
the ISG Sale.

                  B.       On the Effective Date, the PBGC shall deliver the ISG
Release to ISG.

                  C.       On the Effective Date, the PBGC shall deliver the BSC
Release to BSC.

                  D.       If the PBGC receives any distribution in respect of
any Claims against any member of the Bethlehem Group, other than any
Consideration Shares or any Replacement Shares and the Note and Registration
Rights Agreement, the PBGC shall deliver such distribution to BSC to be held for
payment of all Claims that are or will be entitled to secured or priority
treatment under Sections 506 or 507 of the Bankruptcy Code or payment to Buyer
as provided in Section 2.3 of the Asset Purchase Agreement. In the event it is
not possible to deliver such distribution to BSC, the PBGC shall deliver it to
ISG. The PBGC may reduce any amount deliverable by it pursuant to this Section
by the amount of any out-of-pocket expenses actually paid by the PBGC after the
date hereof in connection with such distribution.

                                                            Settlement Agreement

                                      -3-
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                  E.       The PBGC shall not without the prior written consent
of ISG and BSC assign, compromise, waive or release any of its claims or rights
against any member of the Bethlehem Group. The PBGC shall use commercially
reasonable efforts to assist BSC in obtaining confirmation of a plan of
liquidation.

                  F.       The PBGC's obligations under Sections III.B.-E.
hereof shall be contingent on the occurrence of the Effective Date.

         IV.      REPRESENTATIONS AND WARRANTIES

                  A.       The PBGC represents and warrants to ISG as follows:

                           (1)      Authorizations. The PBGC possesses full
         corporate power and authority to execute, deliver and perform this
         Agreement. The officer of the PBGC executing this Agreement has been
         duly authorized to execute and deliver this Agreement.

                           (2)      Binding Effect. This Agreement has been duly
         executed and delivered by the PBGC and constitutes a legal, valid and
         binding obligation of the PBGC and is enforceable against it in
         accordance with its terms, subject to general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing.

                           (3)      Reliance. The PBGC recognizes and
         acknowledges that ISG has relied on the representations and warranties
         contained herein in entering into this Agreement and that these
         representations and warranties shall survive the execution and delivery
         of this Agreement.

                           (4)      Securities Law Matters.

                               (a) The PBGC acknowledges that the shares of ISG
                      Class B Common Stock that may be issued hereunder have not
                      been and will not be registered under the Securities Act
                      or any applicable state securities laws and that the
                      contemplated sale is being made in reliance on a private
                      placement exemption to accredited investors (as such term
                      is defined in Rule 501(a) promulgated under the Securities
                      Act of 1933 (the "SECURITIES ACT")); provided, however,
                      that nothing in this Section is in denigration of the
                      PBGC's rights under the Note or the Registration Rights
                      Agreement.

                               (b) The PBGC has such knowledge and experience in
                      financial and business matters as to be capable of
                      evaluating the merits and risks of its investment in the
                      ISG Class B Common Stock and is able to bear the economic
                      risks of such investment.

                               (c) The PBGC is an "accredited investor" as
                      defined in Rule 501(a) promulgated under the Securities
                      Act.

                               (d) The PBGC acknowledges that upon the original
                      issuance thereof, and until such time as the same is no
                      longer required under applicable requirements of the
                      Securities Act or applicable state securities laws (at
                      which time ISG shall remove such legends promptly upon
                      request of PBGC), certificates representing the ISG Class
                      B Common Stock, and all certificates issued in exchange
                      therefor or in substitution thereof, shall bear the
                      following legend:

                                                            Settlement Agreement

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                           THE SECURITIES REPRESENTED BY THIS
                           CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
                           THE SECURITIES ACT OF 1933, AS AMENDED (THE
                           "SECURITIES ACT"), OR ANY STATE SECURITIES
                           OR BLUE SKY LAWS. SUCH SHARES HAVE BEEN
                           ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
                           TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
                           ABSENCE OF AN EFFECTIVE REGISTRATION
                           STATEMENT FOR SUCH SHARES UNDER THE
                           SECURITIES ACT AND ANY APPLICABLE STATE
                           SECURITIES OR BLUE SKY LAWS, UNLESS, IN THE
                           OPINION (WHICH SHALL BE IN FORM AND
                           SUBSTANCE REASONABLY SATISFACTORY TO THE
                           ISSUER) OF REPUTABLE SECURITIES LAW COUNSEL,
                           SUCH REGISTRATION IS NOT REQUIRED.

                      In addition, such certificates shall also bear such other
                      legends as counsel for ISG reasonably determines are
                      required under the applicable laws of any state until such
                      time as the same is no longer required (at which time ISG
                      shall remove such legends promptly upon request of the
                      PBGC).

                  B.       ISG represents and warrants to the PBGC as follows:

                           (1)      Authorization. ISG is a corporation duly
         organized, existing and in good standing under the laws of Delaware.
         ISG possesses full corporate power and authority to execute, deliver
         and perform this Agreement. The officer executing this Agreement on
         behalf of ISG has been duly authorized to do so.

                           (2)      Binding Effect. This Agreement has been duly
         executed and delivered by ISG and constitutes a legal, valid and
         binding obligation of ISG and is enforceable against ISG in accordance
         with its terms, subject to the effects of applicable bankruptcy,
         insolvency, fraudulent conveyance, moratorium and other similar laws
         relating to or affecting creditors' rights generally, general equitable
         principles (whether considered in a proceeding in equity or at law) and
         an implied covenant of good faith and fair dealing.

                           (3)      No Conflict. The execution, delivery and
         performance of this Agreement by ISG is not in contravention of, and
         does not constitute a default under, the terms of any of ISG's articles
         of incorporation, by-laws or other organizational documentation, or any
         law, regulation, decree, order, judgment, indenture, agreement or
         undertaking to which ISG is a party or by which ISG or any of its
         properties are bound or result in the creation of imposition of any
         lien on any of the respective properties of ISG.

                           (4)      Validity of Replacement Shares. The
         Replacement Shares issuable hereunder have been duly authorized for
         issuance and, when issued and delivered in accordance with the
         provisions of this Agreement, will be validly issued and fully paid and
         non-assessable, and the issuance of such shares will not be subject to
         preemptive or other similar rights. The shares of ISG Common Stock (as
         defined in the Asset Purchase Agreement) to be issued upon the
         conversion of the Replacement Shares if issued and delivered in
         accordance with the terms of the Replacement Shares will be validly
         issued and fully paid and nonassessable and the issuance of such shares
         will not be subject to preemptive or similar rights.

                                                            Settlement Agreement

                                      -5-
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                           (5)      No Consents Required. No consent, approval,
         authorization, filing, registration or other similar formality of or
         with any governmental authority, agency or instrumentality, or any
         other person or entity is required in connection with the execution,
         delivery or performance by ISG of this Agreement, except in connection
         with any filing that has been or will be made by ISG to the extent
         required under (a) state securities or "blue sky" laws or (b) the
         Securities Act.

                           (6)      Reliance. ISG recognizes and acknowledges
         that the PBGC has relied on the representations and warranties
         contained herein in entering into this Agreement and that these
         representations and warranties shall survive the execution and delivery
         of this Agreement.

         V.       GENERAL PROVISIONS

                  A.       Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of New York and by ERISA, the Internal
Revenue Code, and other laws of the United States to the extent they preempt the
laws of the State of New York. Except as otherwise provided in Section II.B.
hereof, the parties hereto shall submit to the jurisdiction of the bankruptcy
court overseeing the Bankruptcy Cases in connection with any claim or dispute
arising under this Agreement.

                  B.       Entire Agreement. This Agreement and any instruments
or documents delivered or to be delivered in connection herewith represent the
entire agreement and understanding concerning the subject matter between the
parties hereto, and supersedes the term sheet and all other prior agreements,
understandings, negotiations, discussions, proposals and offers concerning the
subject matter hereof, whether oral or written.

                  C.       Severability. If any provision of this Agreement
shall be rendered invalid, inoperative, or unenforceable as applied in any
particular case, such action shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance. If any provision of this Agreement shall be rendered invalid,
inoperative, or unenforceable in all cases, such action shall not have the
effect of rendering any other provisions of the Agreement invalid, inoperative,
or unenforceable. The invalidity of any portion of this Agreement shall not
affect the remaining portions of the Agreement.

                  D.       Limitation of Rights. BSC is an intended third party
beneficiary of this Agreement. Except as provided in the preceding sentence,
this Agreement is intended to be and is for the sole and exclusive benefit of
ISG, its Affiliates, the PBGC, and their assigns under Section IV.E. hereof.
Nothing expressed or mentioned in or to be implied from the Agreement gives any
person other than the ISG Group and the PBGC any legal or equitable right,
remedy, or claim against the ISG Group or the PBGC under or in respect of this
Agreement.

                  E.       Assignment. This Agreement may not be assigned in
whole or in part by either party without the express written consent of the
other party.

                  F.       Notices. All notices, requests, or other
communications shall be in writing and shall be deemed to have been given (1) if
by courier, when receipted for, (2) if by certified mail, return receipt
requested, when the return receipt has been received, or (3) if by telex,
facsimile or similar electronic transfer, when sent, with receipt confirmed,
address as follows:

                                                            Settlement Agreement

                                      -6-
<PAGE>

                  ISG:

                                    Mr. Rodney B. Mott
                                    President & CEO
                                    3250 Interstate Drive, 2nd Floor
                                    Richfield, OH 44286-9000
                                    Facsimile: (330) 659-9132

                                    With copy to:
                                    Mr. Wilbur L. Ross, Jr.
                                    Chairman and Chief Executive Officer
                                    WL Ross & Co. LLC
                                    101 East 52nd Street - 19th Floor
                                    New York, NY 10022
                                    Facsimile: (212) 317-4891

                                    and to

                                    David Watson, Esq.
                                    Jones Day
                                    901 Lakeside Avenue
                                    Cleveland, OH 44114
                                    Facsimile: (216) 579-0212

                  PBGC:             Director, Corporate Finance and Negotiations
                                    Department
                                    Pension Benefit Guaranty Corporation
                                    1200 K Street, NW, Suite 270
                                    Washington, DC 20005-4026
                                    Facsimile: (202) 842-2643

                                    With copy to:

                                    General Counsel
                                    Pension Benefit Guaranty Corporation
                                    1200 K Street, NW, Suite 340
                                    Washington, DC 20005-4026
                                    Facsimile: (202) 326-4112

                  G.       Captions and Headings. The titles and captions used
in the Section headings of this Agreement are solely for the convenience of the
parties and shall not be controlling for purposes of the interpretation of this
Agreement.

                  H.       Counterparts. This Agreement may be executed in
identical counterparts, each of which shall be an original as against the party
that signed it, and all which together shall constitute one and the same
instrument. This Agreement will be effective as of the latest date on which it
has been signed by all the parties.

                  I.       Amendment and Waivers. No amendment of any provision
of this Agreement shall be valid unless the amendment is in writing and signed
by the parties to this Agreement. The failure

                                                            Settlement Agreement

                                      -7-
<PAGE>

of any party to the Agreement to enforce a provision of the Agreement shall not
constitute a waiver of the party's right to enforce that provision of the
Agreement.

                  J.       Reservation of Rights. Nothing in this Agreement
shall preclude the PBGC from exercising its regulatory, enforcement, litigation,
or other authority as set forth in ERISA and the Internal Revenue Code with
respect to any person, other than as expressly provided otherwise in this
Agreement.

                  K.       Rules for Interpretation. For purposes of this
Agreement, unless otherwise provided herein:

                           (1) whenever from the context it is appropriate, each
         term, whether stated in the singular or the plural, will include both
         the singular and the plural;

                           (2) unless otherwise provided in this Agreement, any
         reference in this Agreement to another agreement, contract, instrument
         or document being in a particular form or having particular terms and
         conditions means that such agreement, contract, instrument, or document
         will be substantially in such form or substantially on such terms and
         conditions;

                           (3) any reference to the PBGC and ISG includes such
         entities' permitted successors and assigns and, to the extent relevant,
         any reference to ISG includes its Affiliates; and

                           (4) the language used in this Agreement shall be
         deemed to be the language chosen by the Parties to express their mutual
         intent, and no rule of strict construction shall be applied against any
         party hereto. A reference to any statute shall be deemed also to refer
         to all rules and regulations promulgated under the statute, unless the
         context requires otherwise.

                         [SIGNATURES ON FOLLOWING PAGE]

                                                            Settlement Agreement

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<PAGE>

                  IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered as of the day and year first set forth above.

                                   INTERNATIONAL STEEL GROUP INC.

                                   By: /s/ Rodney Mott
                                       -----------------------------------------
                                   Name:  Rodney Mott
                                   Title: President

                                   PENSION BENEFIT GUARANTY CORPORATION

                                   By: /s/ Andrea E. Schneider
                                       -----------------------------------------
                                   Name:  Andrea E. Schneider
                                   Title: Director, Corporate Finance and
                                          Negotiations Department

                                                            Settlement Agreement
                                       E-1<PAGE>

                                                                    Exhibit 10.7

                                   CONFIDENTIAL TREATMENT INTERNATIONAL STEEL
                                   GROUP INC HAS REQUESTED MARKED PORTIONS OF
                                   THIS DOCUMENT BE ACCORDED CONFIDENTIAL
                                   TREATMENT PURSUANT TO RULE 406 OF REGULATION
                                   C PROMULGATED UNDER THE SECURITIES ACT OF
                                   1933

                       PELLET SALE AND PURCHASE AGREEMENT

         THIS AGREEMENT, entered into, dated and effective as of April 10, 2002
("Agreement"), by and among THE CLEVELAND-CLIFFS IRON COMPANY, an Ohio
corporation ("Iron"), CLIFFS MINING COMPANY, a Delaware corporation ("Mining"),
NORTHSHORE MINING COMPANY, a Delaware corporation ("Northshore"), NORTHSHORE
SALES COMPANY, an Ohio corporation ("Sales"; Iron, Mining, Northshore and Sales
being collectively referred to herein as "Cliffs"), INTERNATIONAL STEEL GROUP
INC., a Delaware corporation ("ISG"), ISG CLEVELAND INC., a Delaware
corporation, ("ISG Cleveland"), and ISG INDIANA HARBOR INC., a Delaware
corporation ("ISG Indiana Harbor"; ISG, ISG Cleveland and ISG Indiana Harbor
being collectively referred to herein as "Steel").

                                    RECITALS

         WHEREAS, Cliffs desires to sell to Steel and Steel desires to purchase
from Cliffs certain quantities of grades of iron ore standard pellets as
follows: (i) such grades of iron ore standard pellets being those produced at
the Empire Iron Mining Partnership iron ore pellet plant ("Empire Pellets"),
located in Palmer, Michigan ("Empire Mine"); (ii) such grades of iron ore
standard pellets being those produced at the Northshore Mining Company iron ore
pellet plant ("Northshore Pellets"), located in Silver Bay, Minnesota
("Northshore Mine"); (iii) such grades of iron ore standard pellets being those
produced at the Hibbing Taconite Company Joint Venture iron ore pellet plant
("Hibbing Pellets"), located in Hibbing, Minnesota ("Hibbing Mine"); or (iv)
such other pellet grades as may be mutually agreed to by the parties hereto
(such Empire Pellets, Northshore Pellets, Hibbing Pellets, and other mutually
agreed upon pellets collectively being referred to herein as "Cliffs Pellets"),
all on the conditions contained herein.

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, Cliffs and Steel agree as follows:

SECTION 1. DEFINITIONS.

         The terms quoted in the above parentheses of the first introductory
paragraph of this Agreement and the WHEREAS clause, other terms quoted
throughout this Agreement, and the terms defined below in this Section 1 shall
have the meanings assigned to them for purposes of

<PAGE>

this Agreement. Attached as Appendix I to this Agreement is a locator list of
all defined terms used throughout the Agreement.

         (a)      The words, "Steel's Annual Pellet Tonnage Requirements", as
used herein, shall mean for any year a tonnage amount equal to Steel's total
annual iron ore pellet tonnage requirements required for consumption in Steel's
iron and steel making facilities in any year at ISG Cleveland, located in
Cleveland, Ohio ("Cleveland Works") and at ISG Indiana Harbor, located in
Indiana Harbor, Indiana ("Indiana Harbor Works").

         (b)      The word "pellets", as used herein, shall mean iron-bearing
products obtained by the pelletizing of iron ore or iron ore concentrates,
suitable for making iron in blast furnaces.

         (c)      The word "ton", as used herein, shall mean a gross ton of
2,240 pounds avoirdupois natural weight.

         (d)      The words "net ton", as used herein, shall mean a ton of 2,000
pounds avoirdupois natural weight.

         (e)      The word "year", as used herein, shall mean a calendar year
commencing on January 1 and ending December 31.

         (f)      The words "shuttle tons", as used herein, shall mean pellets
which are destined for Cleveland Works deliveries, which are first unloaded from
vessel onto a dock which is not a Steel dock or a dock designated by Steel
pursuant to Section 8(a).

SECTION 2. SALE AND PURCHASE/TONNAGE.

         During each of the years 2002 through 2016, and each year thereafter as
long as this Agreement remains in effect, Cliffs shall sell and deliver to Steel
and Steel shall purchase and receive from Cliffs and pay for a tonnage of Cliffs
Pellets which tonnage shall be equal to Steel's Annual Pellet Tonnage
Requirements for each such year.

SECTION 3. QUALITY.

         (a)      Cliffs Pellets when loaded for shipment will be consistent
with the typical specifications and analysis limits set forth in Exhibit 1.

         (b)      In the event the monthly average vessel analysis exceeds one
standard deviation as set forth in Exhibit 1, Cliffs will take such actions as
shall be necessary to achieve specification conformity. If specification
conformity cannot be achieved, Steel and Cliffs shall negotiate in good faith to
determine what actions or remedies, if any, are appropriate. If any two vessel
shipments made during any calendar month have analysis that exceeds the analysis
limits in the specifications set forth in Exhibit 1, Steel may refuse any
subsequent vessel shipments during that calendar month, and Steel shall not be
required to accept any subsequent shipments until Cliffs has taken action to
remedy the non-conformity so that future shipments will be within the analysis
limits. If more than two vessel shipments made during any calendar month have

                                       2

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

analysis that exceeds such limits, Cliffs and Steel shall negotiate an
appropriate cost adjustment (if any) for the cargoes in excess of the first
cargo that exceeded the analysis limits, based upon the additional costs (if
any) to Steel associated with the quality specifications in the additional
vessel shipments made during that calendar month that exceeded such analysis
limits.

         (c)      Shuttle tons from the Cleveland Bulk Terminal shall be sampled
and analyzed for the - 1/4" size fraction as they are being loaded into a vessel
for delivery to Steel's dock. Shuttle tons shall not have a significant increase
in the - 1/4" size fraction versus the non-shuttle tons delivered to the
Cleveland Works pursuant to Section 8(a). In the event that two shuttle tons
vessel shipments during any month display an increase in the - 1/4" size
fraction of [* * * *] or more versus non-shuttle delivered tons, Steel and
Cliffs shall meet to determine the cause of the significant increase and the
corrective action to reduce the significant increase. If a corrective action
cannot be implemented to reduce the - 1/4" size fraction below the [* * * *]
increase, then Steel and Cliffs shall meet to work out a good faith adjustment.

SECTION 4. NOTIFICATION AND NOMINATION.

         (a)      With respect to the tonnage of Cliffs Pellets to be purchased
by Steel for the year 2002, as provided in Section 2, on or before April 30 of
the current year, Steel shall notify Cliffs in writing of Steel's preliminary
tonnage of Steel's Annual Pellet Tonnage Requirements which Steel shall purchase
from Cliffs. Such notification shall include: (i) Steel's Annual Operating Plan
for the balance of the current year detailed by months, as such Annual Operating
Plan relates to Steel's planned monthly consumption of all pellets for such
year; (ii) the tonnage of Cliffs Pellets which Steel expects to purchase in the
current year from Cliffs; and (iii) Steel's planned monthly pellet consumption
for the first four months of the year 2003.

         (b)      With respect to the tonnage of Cliffs Pellets to be purchased
by Steel for each of the years 2003 through 2016, as provided in Section 2, on
or before November 1 of each of the years prior to the years above, Steel shall
notify Cliffs in writing of Steel's preliminary tonnage of Steel's Annual Pellet
Tonnage Requirements which Steel shall purchase from Cliffs. Such notification
shall include: (i) Steel's Annual Operating Plan for the following year detailed
by months, as such Annual Operating Plan relates to Steel's planned monthly
consumption of all pellets for such year ("Steel's AOP"); (ii) the tonnage of
Cliffs Pellets which Steel expects to purchase in the following year from
Cliffs; (iii) Steel's expected total pellet inventory as of December 31 for the
then current year; (iv) Steel's planned total pellet inventory on December 31
for the following year; and (v) Steel's planned monthly pellet consumption for
the first four months of the year which succeeds the following year.

         (c)      With respect to the tonnage of Empire Pellets, Northshore
Pellets and Hibbing Pellets which Cliffs will have available for sale to Steel
in 2002, on or before May 31, 2002, and in each succeeding year on or before
December 31 of each year prior to the years in Section 4(b) above, Cliffs shall
notify Steel in writing as to the tonnage of Empire Pellets, Northshore Pellets
and Hibbing Pellets Cliffs shall sell to Steel, which tonnage shall equal
Steel's Annual Pellet Tonnage Requirements for such year.

                                        3

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

         (d)      With respect to Steel's Annual Pellet Tonnage Requirements as
provided for in Sections 4(a) and 4(b) above, Steel shall notify Cliffs by the
15th day of each month for the year in determination: (i) Steel's actual
consumption of all pellets for the previous month, and (ii) Steel's planned
monthly consumption of all pellets for the balance of the year and the first
four months of the following year. In the first month's notice of each such
year, as provided for under this Section (d), Steel shall also advise Cliffs of
Steel's actual total pellet inventory as of December 31 for the previous year.

         (e)      If during the course of the year, Steel's Annual Pellet
Tonnage Requirements decrease from Steel's preliminary nomination provided
pursuant to Section 4(b) above, then the tonnage of Cliffs Pellets which Steel
shall purchase from Cliffs shall be reduced by an amount equal to the shortfall
of the actual pellet consumption versus the nominated pellet consumption. In
addition, Steel's Annual Pellet Tonnage Requirements shall not be modified so as
to change Steel's planned total pellet inventory at the end of the then current
year unless such modification is agreed to by Cliffs.

         (f)      If, during the course of the year, Steel's Annual Pellet
Tonnage Requirements increase from Steel's preliminary nomination provided
pursuant to Section 4(b) above, then Steel shall notify Cliffs in writing of any
such increase in Steel's Annual Pellet Tonnage Requirements. Cliffs shall advise
Steel in writing within fifteen (15) days of receipt of Steel's notice as to
Cliffs' ability to supply all or any portion of such increased tonnage, which
Cliffs shall sell and Steel shall purchase as provided for in Cliffs notice at
the contract prices provided for in this Agreement. In the event Cliffs cannot
supply any portion of such increased tonnage, Steel and Cliffs shall work
together to attempt to procure such additional tonnage for Steel.

         (g)      In each year after 2004, upon reasonable notification and by
mutual agreement, Steel may, for trial purposes, substitute up to 5% of Steel's
Annual Pellet Tonnage Requirements for Northshore Pellets and/or Empire Pellets
with another grade of Cliffs' produced pellets ("Substitute Pellets"). In the
event an additional cost is incurred by Cliffs in producing or delivering the
Substitute Pellets, then an appropriate price adjustment shall be made to the
contract price for the tonnage of Substitute Pellets.

SECTION 5. PRICE, ADJUSTMENTS AND [****].

         (a)      The price for the Cliffs Pellets, either currently at or to be
delivered to Steel's Cleveland Works or other dock area designated by Steel
pursuant to Section 8(a), shall be as follows: (i) for the year 2002, the
[* * * *] Northshore Pellets and Hibbing Pellets (which are currently located at
Steel's Cleveland Works blast furnace ore yard) sold by Cliffs and purchased by
Steel shall be [* * * *] per ton; (ii) the price for the [* * * *] Northshore
Pellets and Hibbing Pellets (which are currently located at the Lorain Pellet
Terminal, Lorain, Ohio) sold by Cliffs and purchased by Steel shall be [* * * *]
per ton; and (iii) except for the price [* * * *] as provided for the specific
Cliffs Pellets as described in Sections 5(a)(i) and 5(a)(ii) above, all other
Cliffs Pellets sold by Cliffs and purchased by Steel in the year 2002 shall have
a final year 2002 price of [* * * *] per iron unit (which at the expected
natural iron content of [* * * *] for Northshore pellets equals [* * * *] per
ton).

                                       4

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

         (b)      The price for the Cliffs Pellets, either currently at or to be
delivered to Steel's Indiana Harbor Works shall be as follows: (i) for the year
2002, the [* * * *] Empire Pellets (which are currently located at Steel's
Indiana Harbor Works blast furnace ore yard) sold by Cliffs and purchased by
Steel shall be [* * * *] per ton; and (ii) except for the price [* * * *] for
the specific Cliffs Pellets described in Section 5(b)(i) above, all other Cliffs
Pellets sold by Cliffs and purchased by Steel in the year 2002, shall have a
final year 2002 price of [* * * *] per iron unit (which at the expected natural
iron content of [* * * *] for Empire pellets equals [* * * *] per ton).

         (c)      The prices for the specific grades of Cliffs Pellets sold and
purchased in each of the years 2003 and thereafter for the Cleveland Works or
other dock area designated by Steel pursuant to Section 8(a), and the Indiana
Harbor Works shall be based on the 2002 base prices per iron unit as described
in Section 5(a) (iii) and 5(b)(ii) above ("2002 base prices per iron unit for
each of the Cleveland Works and the Indiana Harbor Works"), which 2002 base
prices per iron unit for each of the Cleveland Works and the Indiana Harbor
Works shall then be adjusted, up or down, in the year 2003 and each year
thereafter by an amount as determined in accordance with Section 5(d) below.

         (d)      In order to determine the adjusted prices to be paid each year
for the Cliffs Pellets, as provided for under Section 5(c), the 2002 base prices
per iron unit for each of the Cleveland Works and the Indiana Harbor Works and
each of the following respective year's then adjusted prices per iron unit for
each of the Cleveland Works and the Indiana Harbor Works shall be further
adjusted, up or down, each year for the year in determination as follows:

                  (1)      Divide (x) the numerator, which is the amount by
                           which the [* * * *] for the calendar year in
                           determination changes (up or down) from the
                           immediately preceding calendar year's [* * * *]; by
                           (y) the denominator, which is the immediately
                           preceding calendar year's [* * * *], and multiply the
                           result obtained by [* * * *]; and

                  (2)      Multiply the results determined in (1) above by the
                           preceding year's adjusted prices per iron unit for
                           each of the Cleveland Works and the Indiana Harbor
                           Works which will then equal the current year's price
                           adjustment per iron unit for each of the Cleveland
                           Works and the Indiana Harbor Works; and

                  (3)      Add the result determined in (2) above to the
                           preceding year's adjusted price per iron unit for
                           each of the Cleveland Works and the Indiana Harbor
                           Works, which then will equal the current year's
                           adjusted prices per iron unit for each of the
                           Cleveland Works and the Indiana Harbor Works.

         Those adjusted prices per iron unit for each of the Cleveland Works and
the Indiana Harbor Works shall then become the contract's year final price for
the Cliffs Pellets delivered to the Cleveland Works and the Indiana Harbor Works
for the year in determination, and shall be the starting base for determining
the following year's adjusted prices per iron unit for the Cleveland Works and
the Indiana Harbor Works.

                                        5

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

         (e)      The price for all tons sold by Cliffs to Steel shall be based
on actual natural iron content shipped. Notwithstanding the previous sentence,
payments for the years 2002 through 2004, as described in Section 6(a), shall be
based on actual natural iron content consumed by Steel.

         (f)      Attached as Exhibit 2 is an example of the adjustment formula
applying the provisions of Sections 5(c) and 5(d).

         (g)      (i) Beginning in 2003, an [* * * *] shall be made in each
year, wherein Cliffs shall pay Steel or Steel shall pay Cliffs, as the case may
be, if [* * * *] average annual [* * * *] for actual [* * * *] in any contract
year is [* * * *] or [* * * *]. The amount of the [* * * *] shall be determined
as follows:

                  (1)      In any contract year in which [* * * *] average
                           [* * * *] for actual [* * * *] is [* * * *], Cliffs
                           shall pay Steel an amount equal to: (w) the amount
                           [* * * *], (x) multiplied by [* * * *], (y)
                           multiplied by the contract year's average weighted
                           pellet price per ton for the Cliffs Pellets consumed
                           by Steel, (z) multiplied by the total tons of Cliffs
                           Pellets which Steel consumed in the contract year.

                  (2)      In any contract year in which [* * * *] average
                           [* * * *] for actual [* * * *] is [* * * *], Steel
                           shall pay Cliffs an amount equal to: (w) the amount
                           [* * * *] (x) multiplied by [* * * *], (y) multiplied
                           by the contract year's average weighted pellet price
                           per ton for the Cliffs Pellets consumed by Steel, (z)
                           multiplied by the total tons of Cliffs Pellets which
                           Steel consumed in the contract year.

                  (3)      For the purpose of estimating the [* * * *], a
                           [* * * *] payment calculation shall be made by
                           [* * * *] following the end of each quarter, using
                           the formula provided for in Sections 5(g)(i)(1) and
                           5(g)(i)(2) above for each quarter. This calculation
                           (and payment, if any) shall be based on [* * * *]
                           average [* * * *] for actual [* * * *] for the
                           quarter and the pellet tonnage consumed by Steel in
                           that quarter. Within 30 days following each quarter
                           [* * * *] shall notify [* * * *] in writing of the
                           amount (if any) payable by Cliffs to Steel or Steel
                           to Cliffs, and a quarterly payment, if any, shall be
                           made by Cliffs to Steel or Steel to Cliffs, as the
                           case may be, within 45 days after the end of each
                           quarter.

                  (4)      The final [* * * *] calculation shall be made after
                           the end of the year in accordance with Sections
                           5(g)(i)(1) and 5(g)(i)(2) above which will reflect
                           [* * * *] actual average annual [* * * *] for actual
                           [* * * *] for the full calendar year, and an
                           adjustment will be made to reflect any difference
                           between the actual year's [* * * *] and the quarterly
                           estimated payments that were made during the year.
                           Payment due, from either party, as a result of the
                           actual annual calculation shall be made by February
                           15 of the year following the contract year.

                                       6

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                  (5)      Attached as Exhibits 3 and 4 are examples of the
                           calculations applying the provisions of Sections
                           5(g)(i) and 5(g)(ii).

                  (ii) In the event that in any year [* * * *] annual total
                  [* * * *] are less than [* * * *] of [* * * *] total annual
                  [* * * *], then Cliffs and Steel agree to substitute another
                  [* * * *] for the [* * * *] which substituted [* * * *]
                  comprises an amount in excess of [* * * *] of [* * * *] total
                  annual [* * * *] in order to determine the [* * * *]. The
                  [* * * *] and [* * * *] which are used for the [* * * *], as
                  provided for in Section 5(g)(i) above, shall be adjusted as
                  follows: (i) the actual average [* * * *] of [* * * *]
                  substituted [* * * *] from the previous year, less (ii) the
                  [* * * *] from the previous year, (iii) with the difference
                  between (i) and (ii) above being added to both the [* * * *]
                  and the [* * * *] to determine the revised [* * * *] for the
                  substituted [* * * *] in order to determine the [* * * *].

SECTION 6. PAYMENTS AND ADJUSTMENTS.

         (a)      For the years 2002 through 2004 and for all tonnage delivered
through March 31, 2005, Steel shall pay Cliffs [* * * *], via wire transfer, an
amount to be equal to the result of: (i) Steel's planned pellet consumption for
the [* * * *] period beginning with the [* * * *], less (ii) the pellets which
Steel has in its inventory on [* * * *] for both the Cleveland Works and the
Indiana Harbor Works, (iii) with the difference between (i) and (ii) above being
multiplied by the appropriate estimated price per ton. The appropriate estimated
price per ton shall be calculated by multiplying the contract year's estimated
price per iron unit with Steel's estimated iron content of the Cliffs Pellets
being consumed during the following [* * * *] period.

         (b)      Beginning with vessel deliveries on April 1, 2005, Cliffs
shall invoice Steel for an amount based on the estimated prices per ton for the
contract year for [* * * *] pellet shipment deliveries [* * * *] to Steel's
Cleveland Works and Indiana Harbor Works with payment to be made by Steel to
Cliffs via wire transfer on the [* * * *] following the [* * * *] pellet
deliveries.

         (c)      Following each contract year, final adjustments and payments
shall be determined as follows:

                  (1)      The adjustment for the actual average natural iron
                           content of Cliffs Pellets shall be determined by
                           Cliffs and verified in detail in writing to Steel by
                           an officer of Cliffs, such verification due no later
                           than January 31 of the year following a contract
                           year, and the payment from Cliffs to Steel or Steel
                           to Cliffs, as the case may be, shall be made by
                           February 15 of that year;

                  (2)      The final [* * * *] shall be determined by [* * * *]
                           and verified in detail in writing to [* * * *] by an
                           officer of [* * * *], such verification due no later
                           than January 31 of the year following a contract
                           year, and payment from Cliffs to Steel or Steel to
                           Cliffs, as the case may be, shall be made by February
                           15 of that year; and

                                       7

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                  (3)      The adjustment to the contract year's price
                           identified pursuant to Section 5(d) shall be made by
                           [* * * *] by March 15 of the following year (using
                           the most recent final estimate of the [* * * *] which
                           shall be verified in writing by an officer of
                           [* * * *]. Cliffs shall issue an invoice or credit
                           memo, as the case may be, to Steel, and payment from
                           Cliffs to Steel or Steel to Cliffs, as the case may
                           be, shall be made by April 15 of that year.

         (d)      During each of the years 2002 through 2005, Cliffs shall have
the right to conduct a minimum of two pellet stockpile surveys each year at each
of the Cleveland Works and Indiana Harbor Works to verify (i) the tonnage of [*
* * *] which Steel has [* * * *] and (ii) the tonnage of [* * * *] currently [*
* * *] in stockpile at the Cleveland Works and the Indiana Harbor Works. In the
event that the pellet stockpile survey results vary by more than [* * * *]
(above or below) from [* * * *] (after taking into account actual iron units
shipped versus actual iron units consumed), then Cliffs shall issue an invoice
or credit memo, as the case may be, to Steel, for the amount of the difference
in the stockpile survey results that vary by more than [* * * *] above or below
[* * * *], and payment from Cliffs to Steel or Steel to Cliffs, as the case may
be, shall be made within 30 days following the pellet stockpile survey. If the
pellet stockpile survey results vary by [* * * *] or more (above or below) from
[* * * *] (after taking into account actual iron units shipped versus actual
iron units consumed), then Cliffs and Steel shall have an independent third
party conduct another pellet stockpile survey. The results of the independent
third party survey shall be final and Cliffs shall issue an invoice or credit
memo, as the case may be, to Steel, and payment from Cliffs to Steel or Steel to
Cliffs, as the case may be, shall be made within 30 days following the
independent third party's pellet stockpile survey.

         (e)      At their own expense, Cliffs and/or Steel shall have an annual
right to have the information and calculations relating to the contract price,
[* * * *], and adjustments verified by an independent third party auditor. In
the event Steel shall fail to make payment when due of all amounts, Cliffs, in
addition to all other remedies available to Cliffs in law or in equity, shall
have the right, but not the obligation, to withhold further performance by
Cliffs under this Agreement until all claims Cliffs may have against Steel under
this Agreement are fully satisfied.

         (f)      All payments shall be made in U.S. dollars.

SECTION 7. SAMPLING AND ANALYSES.

         All pellet sampling procedures and analytical tests conducted on Cliffs
Pellets sold to Steel to demonstrate compliance with typical specifications and
analysis limits shall be performed on each pellet vessel shipment. Test methods
to be used shall be the appropriate ASTM or ISO standard methods published at
the time of testing or the customary procedures and practices, or any other
procedures and practices that may be mutually agreed to by Cliffs and Steel.
Steel may, at any time and from time to time through one or more authorized
representatives, and with prior notice to Cliffs be present during production,
loading, or to observe sampling and analysis of pellets being processed for
shipment to Steel.

                                       8

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

SECTION 8. DELIVERY, STORAGE AND TRANSFER OF OWNERSHIP.

         (a)      Cliffs shall deliver to Steel the annual tonnage of Cliffs
Pellets for the Cleveland Works to the Cleveland Work's blast furnace ore yard
or other vessel dock in the Cleveland, Ohio area that Steel designates. Steel
shall make dock storage space available so that Cliffs can deliver and have in
inventory in [* * * *] name up to [* * * *] tons of pellets at any time and
Steel will work to make more dock storage space available if practicable.

         (b)      Cliffs shall deliver to Steel the annual tonnage of Cliffs
Pellets for the Indiana Harbor Works to the Indiana Harbor Works' blast furnace
ore yard and Steel shall make dock storage space available so that Cliffs can
deliver and have in inventory in [* * * *] up to [* * * *] tons of pellets at
any time.

         (c)      Title, and all risk of loss, damage or destruction of Cliffs
Pellets shall transfer to Steel upon [* * * *] or upon [* * * *], as the case
may be.

SECTION 9. SHIPMENTS.

Shipments of Cliffs Pellets shall be in approximately equal amounts over the
nine month period of April through December each year during the term of this
Agreement to ensure an adequate amount of inventory to allow a working pellet
pile at Steel's blast furnace ore docks. Cliffs shall work to annually direct
ship a minimum of [* * * *] of Steel's pellet requirements for Steel's Cleveland
Works.

SECTION 10. WEIGHTS.

         (a)      Except as set forth in Section 10(b) below, vessel bill of
lading weight determined by certified railroad scale weights, certified belt
scale weights, or certified bin scale weights in accordance with the procedures
in effect from time to time at each of the loading ports shall be accepted by
the parties as finally determining the amount of Cliffs Pellets delivered to
Steel pursuant to this Agreement.

         (b)      Steel shall have the right to have a draft survey performed on
vessels by an independent third party contractor at the loading port (where the
pellets are first loaded into a vessel for shipment) at Steel's expense and
Steel shall afford Cliffs an opportunity to have a representative present by
providing Cliffs a minimum of two days' notice prior to having any draft survey
performed. If the vessel bill of lading weight is more than [* * * *] higher or
more than [* * * *] lower than the draft survey weight, then the draft survey
weight shall be the weight used in calculating the value of the cargo. In the
event that the variance is greater than [* * * *], Cliffs and Steel will
investigate and remedy the cause of the variance.

SECTION 11. EMPLOYMENT OF VESSELS.

         Cliffs assumes the obligation for arranging and providing appropriate
vessels for the transportation of the Cliffs Pellets delivered by Cliffs to
Steel hereunder. Steel shall arrange for

                                       9

<PAGE>

suitable pellet unloading facilities at the Cleveland Works and Indiana Harbor
Works blast furnace ore yards ports.

SECTION 12. WARRANTIES.

         THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, WHICH EXTEND BEYOND THE
PROVISIONS OF THIS AGREEMENT, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR INTENDED PURPOSE. All notices for substantial variance in
specifications of the Cliffs Pellets from the specifications and analysis limits
described in Exhibit 1 shall be given in writing delivered to Cliffs within
sixty (60) calendar days after completion of discharge of the Cliffs Pellets at
the Cleveland Works or Indiana Harbor Works blast furnace ore yards, or any
claim arising from any substantial variance shall be deemed waived by Steel.
Each party shall afford the other party prompt and reasonable opportunity to
inspect the Cliffs Pellets as to which any notice is given as above stated. No
claim will be entertained after the Cliffs Pellets have been consumed. The
Cliffs Pellets shall not be returned to Cliffs without prior written consent of
Cliffs. In no event shall Cliffs be liable for Steel's cost of processing, lost
profits, injury to good will or any other special or consequential damages.

SECTION 13. FORCE MAJEURE.

         No party hereto shall be liable for damages resulting from failure to
produce, deliver or accept all or any of the Cliffs Pellets as described herein,
if and to the extent that such production, delivery or acceptance would be
contrary to or would constitute a violation of any regulation, order or
requirement of a recognized governmental body or agency, or if such failure is
caused by or results directly or indirectly from acts of God, war,
insurrections, interference by foreign powers, strikes, labor disputes, fires,
floods, embargoes, accidents, acts of terrorism, or uncontrollable delays at the
mines or either steel plant, on the railroads, docks or in transit, shortage of
transportation facilities, disasters of navigation, or other causes, similar or
dissimilar, that are beyond the control of the party charged with a failure to
deliver or to accept the Cliffs Pellets. A party claiming a force majeure shall
give the other party prompt notice of the force majeure, including the
particulars thereof and, insofar as known, the probable extent and duration of
the force majeure. To the extent a force majeure is claimed hereunder by a party
hereto, such shall relieve the other party from fulfilling its corresponding
agreement hereunder to the party claiming such force majeure, but only for the
period affected by and to the extent of the claimed force majeure, unless
otherwise mutually agreed to by the parties. The party that is subject to a
force majeure shall use commercially reasonable efforts to cure or remove the
force majeure event as promptly as possible to resume performance of its
obligations under this Agreement.

SECTION 14. NOTICES.

         All notices, consents, reports and other documents authorized and
required to be given pursuant to this Agreement shall be given in writing and
either personally served on an officer of the parties hereto to whom it is given
or mailed, postage prepaid, or sent by telegram or facsimile addressed as
follows:

                                       10

<PAGE>

         If to Cliffs:
                  1100 Superior Avenue - 15th Floor
                  Cleveland, Ohio  44114-2589
                  Attention:        Secretary
                  cc:  Vice President-Sales
                  Facsimile:  (216) 694-5385

         If to Steel:
                  3100 East 45th Street
                  Cleveland, Ohio  44127
                  Attention:        Vice President, Finance
                                    and Administration
                  Facsimile:  (216) 429-6003

provided, however, that any party may change the address to which notices or
other communications to it shall be sent by giving to the other party written
notice of such change, in which case notices and other communications to the
party giving the notice of the change of address shall not be deemed to have
been sufficiently given or delivered unless addressed to it at the new address
as stated in said notice.

SECTION 15. TERM.

         (a)      The term of this Agreement shall commence as of April 10, 2002
and continue through December 31, 2016. Unless either party has given written
notice of termination to the other party by December 31, 2014 (two years prior
to termination), this Agreement shall continue on an annual basis after December
31, 2016 (original termination year) subject to subsequent termination by either
party upon not less than two years' prior written notification to the other
party, in which case the Agreement shall terminate at the end of the second
succeeding year.

         (b)      This Agreement shall remain valid and fully enforceable for
the fulfillment of obligations incurred prior to termination.

SECTION 16. AMENDMENT.

         This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

SECTION 17. MERGER, TRANSFER AND ASSIGNMENT.

         (a)      Steel shall not merge, consolidate or reorganize with any
person, partnership, corporation or other entity unless the surviving or
resulting person, partnership, corporation or other entity assumes in writing
all of Steel's obligations under this Agreement. Any obligations required to be
assumed by a surviving or resulting person, partnership, corporation or entity
in accordance with this Section 17(a) shall be limited to the Steel obligations
under this Agreement, and this Section 17(a) is not intended (i) to impose and
shall not be deemed to impose upon any

                                       11

<PAGE>

such surviving or resulting person, partnership, corporation or entity,
including Steel, any obligation with respect to any pellet requirements it may
have for any facility or facilities it owns or operates other than the Cleveland
Works and the Indiana Harbor Works, nor (ii) to allow the surviving or resulting
person, partnership, corporation or other entity to substitute any other pellet
tonnage available from any other pellet purchase or pellet equity commitment of
such surviving or resulting person, partnership, corporation or other entity in
order to satisfy the assumed obligations under this Agreement for the Cleveland
Works and Indiana Harbor Works.

         (b)      Steel shall not sell or transfer all or any of the blast
furnace operations at (i) the Cleveland Works, (ii) the Indiana Harbor Works, or
(iii) both the Cleveland Works and the Indiana Harbor Works to any other person,
partnership, corporation, joint venture or other entity ("Transferee") unless
the Transferee assumes in writing all of Steel's obligations under this
Agreement, as such obligations relate to the Cleveland Works and/or the Indiana
Harbor Works being sold or transferred. Any obligations required to be assumed
by a Transferee in accordance with this Section 17(b) shall be limited to the
Steel obligations under this Agreement relating to the particular facility or
facilities sold or transferred. This Section 17(b) is not intended (i) to impose
and shall not be deemed to impose upon any such Transferee any obligation with
respect to any pellet requirements such Transferee may have for any facility or
facilities such Transferee owns or operates other than the Cleveland Works
and/or the Indiana Harbor Works, nor (ii) to allow such Transferee to substitute
any other pellet tonnage available from any other pellet purchase or pellet
equity commitment of such Transferee in order to satisfy the assumed obligations
under this Agreement.

         (c)      Steel shall not assign its rights or delegate its obligations
under this Agreement except as provided in Section 17(a) or 17(b).

         (d)      Cliffs shall not merge, consolidate or reorganize with any
person, partnership, corporation or other entity unless the surviving or
resulting person, partnership, corporation or other entity assumes in writing
all of Cliffs' obligations under this Agreement. Cliffs shall not sell or
transfer all or substantially all of its iron ore business to any other person,
partnership, corporation, joint venture or other entity ("Cliffs Transferee")
unless the Cliffs Transferee assumes in writing all of Cliffs' obligations under
this Agreement.

         (e)      Cliffs shall not assign its rights or delegate its obligations
under this Agreement except as provided in Section 17(d).

         (f)      All the covenants, stipulations and agreements herein
contained shall inure to the benefit of and bind the parties hereto and their
respective successors, transferees and permitted assigns, and any of the
latter's subsequent successors, transferees and permitted assigns.

SECTION 18. WAIVER.

         No waiver of any of the terms of this Agreement shall be valid unless
in writing. No waiver or any breach of any provision hereof or default under any
provisions hereof shall be deemed a waiver of any subsequent breach or default
of any kind whatsoever.

                                       12

<PAGE>

SECTION 19. CONFIDENTIALITY.

         (a)      Cliffs and Steel acknowledge that this Agreement contains
certain pricing, adjustment and term provisions which are confidential,
proprietary or of a sensitive commercial nature and which would put Cliffs or
Steel at a competitive disadvantage if disclosed to the public, including
without limitation, Sections 3(b) and (c), Section 5, Section 6 and all of the
Schedules and Exhibits hereto ("Confidential Information"). Cliffs and Steel
agree that all provisions of this Agreement shall be kept confidential and,
without the prior written consent of the other party, shall not be disclosed to
any party not a party to this Agreement except as required by law or
governmental or judicial order and except that disclosure of the existence of
this Agreement shall not be precluded by this Section 19.

         (b)      If either party is required by law or governmental or judicial
order or receives legal process or court or agency directive requesting or
requiring disclosure of any of the Confidential Information contained in this
Agreement, such party will promptly notify the other party prior to disclosure
to permit such party to seek a protective order or take other appropriate action
to preserve the confidentiality of such Confidential Information. If either
party determines to file this Agreement with the Securities and Exchange
Commission ("Commission") or any other federal, state or local governmental or
regulatory authority, or with any stock exchange or similar body, such
determining party will use its best efforts to obtain confidential treatment of
such Confidential Information pursuant to any applicable rule, regulation or
procedure of the Commission and any applicable rule, regulation or procedure
relating to confidential filings made with any such other authority or exchange.
If the Commission (or any such other authority or exchange) denies such party's
request for confidential treatment of such Confidential Information, such party
will use its best efforts to obtain confidential treatment of the portions
thereof that the other party designates. Each party will allow the other party
to participate in seeking to obtain such confidential treatment for Confidential
Information.

SECTION 20. GOVERNING LAW.

         This Agreement shall in all respects, including matters of
construction, validity and performance, be governed by and be construed in
accordance with the laws of the State of Ohio.

SECTION 21. REPRESENTATIONS AND WARRANTIES.

         (a)      Steel represents and warrants to Cliffs that (i) the execution
and delivery of this Agreement by Steel and the performance of its obligations
hereunder have been duly authorized by all requisite corporate action, (ii)
neither the execution and delivery of this Agreement, nor the performance of its
obligations hereunder by Steel shall, or after the lapse of time or giving of
notice shall, conflict with, violate or result in a breach of, or constitute a
default under the certificate of incorporation or bylaws of Steel or any law,
statute, rule or regulation applicable to it, or conflict with, violate or
result in a breach of or constitute a default under the material agreement to
which it is a party or by which it or any of its properties is bound, or any
judgment, order, award or decree to which Steel is a party or by which it is
bound, or require any approval, consent, authorization or other action by any
court, governmental authority or regulatory body or

                                       13

<PAGE>

any creditor of Steel or any other person or entity, and (iii) this Agreement
constitutes a valid and binding obligation of Steel and is enforceable against
Steel in accordance with its terms.

         (b)      Cliffs represents and warrants to Steel that: (i) the
execution and delivery of this Agreement by Cliffs and the performance of its
obligations hereunder have been duly authorized by all requisite corporate
actions, (ii) neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder by Cliffs shall, or after the lapse of
time or giving of notice shall, conflict with, violate or result in a breach of,
or constitute a default under the certificate of incorporation or bylaws of
Cliffs or any law, statute, rule or regulation applicable to it, or conflict
with, violate or result in the breach of or constitute a default under any
material agreement to which it is a party or by which it or any of its
properties is bound, or any judgment, order, award or decree to which Cliffs is
a party or by which it is bound, or require any approval, consent, authorization
or other action by any court, governmental authority or regulatory body or any
creditor of Cliffs or any other person or entity, and (iii) this Agreement
constitutes a valid and binding obligation of Cliffs and is enforceable against
Cliffs in accordance with its terms.

SECTION 22. COUNTERPARTS.

         This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                                       14

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of April 10th, 2002.

THE CLEVELAND-CLIFFS IRON COMPANY   INTERNATIONAL STEEL GROUP INC

/s/ Donald J. Gallagher             /s/ Rodney Mott
---------------------------         --------------------------------------------
Vice President                      Vice President

CLIFFS MINING COMPANY               ISG CLEVELAND INC.

/s/ Donald J. Gallagher             /s/ Rodney Mott
---------------------------         --------------------------------------------
Vice President                      Vice President

NORTHSHORE MINING COMPANY           ISG INDIANA HARBOR INC

/s/ Donald J. Gallagher             /s/ Rodney Mott
---------------------------         --------------------------------------------
Vice President                      Vice President

NORTHSHORE SALES COMPANY

/s/ Donald J. Gallagher
---------------------------
Vice President

                                       15

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                                   APPENDIX 1

<TABLE>
<CAPTION>
                                                                                                                   PAGE
<S>                                                                                                                <C>
2002 base prices per iron unit for each of the Cleveland Works and the Indiana Harbor Works....................     5
Agreement......................................................................................................     1
Cleveland Works................................................................................................     2
Cliffs.........................................................................................................     1
Cliffs Pellets.................................................................................................     1
Cliffs Transferee..............................................................................................    12
Commission.....................................................................................................    13
Confidential Information.......................................................................................    13
Empire Mine....................................................................................................     1
Empire Pellets.................................................................................................     1
Hibbing Mine...................................................................................................     1
Hibbing Pellets................................................................................................     1
Indiana Harbor Works...........................................................................................     2
Iron...........................................................................................................     1
ISG............................................................................................................     1
ISG Cleveland..................................................................................................     1
ISG Indiana Harbor.............................................................................................     1
Mining.........................................................................................................     1
net ton........................................................................................................     2
Northshore.....................................................................................................     1
Northshore Pellets.............................................................................................     1
pellets........................................................................................................     2
[* * * *]......................................................................................................     3
Sales..........................................................................................................     1
shuttle tons...................................................................................................     2
[* * * *]......................................................................................................     6
Steel..........................................................................................................     1
Steel's Annual Pellet Tonnage Requirements.....................................................................     2
Steel's AOP....................................................................................................     3
Substitute Pellets.............................................................................................     4
ton............................................................................................................     2
Transferee.....................................................................................................    12
year...........................................................................................................     2
</TABLE>

                                        i

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                                    EXHIBIT 1

             CLEVELAND-CLIFFS STANDARD ACID PELLET TYPICAL ANALYSIS
                        AS LOADED TO VESSEL FOR SHIPMENT

<TABLE>
<CAPTION>
                                                           EMPIRE MINE                             NORTHSHORE MINE
                                          Report                              [* * * *]
                                         Frequency     Typical    [* * * *]   [* * * *]    Typical    [* * * *]   [* * * *]
<S>                                      <C>          <C>         <C>         <C>         <C>         <C>         <C>
MOISTURE                                     V        [* * * *]                           [* * * *]
A.       DRY CHEMICAL ANALYSIS
         Total Iron                          V        [* * * *]                           [* * * *]
         SiO2                                V        [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]
         AI2O3                               V        [* * * *]                           [* * * *]
         CaO                                 V        [* * * *]                           [* * * *]
         MgO                                 V        [* * * *]                           [* * * *]
         Mn                                  V        [* * * *]                           [* * * *]
         Phos                                V        [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]
         S                                  SA        [* * * *]                           [* * * *]
         TiO2                               SA        [* * * *]                           [* * * *]
         Na2O                                V        [* * * *]                           [* * * *]
         K2O                                 V        [* * * *]                           [* * * *]

B.       SIZING, WT. %
         % + 1/2"                            V        [* * * *]                           [* * * *]
         % - 1/2" x + 3/8"                   V        [* * * *]                           [* * * *]
         % - 3/8" x + 1/4"                   V        [* * * *]                           [* * * *]
         % - 1/4"                            V        [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]
         % - 28 mesh

C.       TUMBLE TEST
         % + 1/4" before tumble              V        [* * * *]                           [* * * *]
         % + 1/4" after tumble               V        [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]   [* * * *]
         Q Index                             V        [* * * *]                           [* * * *]
         Tumble Index - 28 mesh              V        [* * * *]                           [* * * *]

D.       COMPRESSION TEST (1)
         Minus 1/2" by plus 7/16"
         Minus 1/2" by plus 3/8"            SA        [* * * *]                           V[* * * *]
         % -300 lbs.                                                                      V[* * * *]
</TABLE>

<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

<TABLE>
<CAPTION>
                                                                  HIBBING TACONITE
                                                                                              [Analysis
                                                                     Typical     [* * * *]     Limits]
<S>                                                <C>         <C>  <C>          <C>          <C>            <C>          <C>
MOISTURE                                                            [* * * *]
A.       DRY CHEMICAL ANALYSIS
         Total Iron                                                 [* * * *]
         SiO2                                                       [* * * *]    [* * * *]    [* * * *]
         AI2O3                                                      [* * * *]
         CaO                                                        [* * * *]
         MgO                                                        [* * * *]
         Mn                                                         [* * * *]
         Phos                                                  SA   [* * * *]
         S                                                          [* * * *]
         TiO2                                                       [* * * *]
         Na2O                                                       [* * * *]
         K2O                                                        [* * * *]

B.       SIZING, WT. %
         % + 1/2"                                                   [* * * *]
         % - 1/2" x + 3/8"                                          [* * * *]
         % - 3/8" x + 1/4"                                          [* * * *]
         % - 1/4"                                                   [* * * *]    [* * * *]    [* * * *]
         % - 28 mesh

C.       TUMBLE TEST
         % + 1/4" before tumble                                     [* * * *]
         % + 1/4" after tumble                     [* * * *]        [* * * *]    [* * * *]     Q Index       [* * * *]    Tumble
         Index - 28 mesh [* * * *]

D.       COMPRESSION TEST (1)
         Minus 1/2" by plus 7/16"                              V    [* * * *]
         Minus 1/2" by plus 3/8"
         % -300 lbs.                                           V    [* * * *]
</TABLE>

<TABLE>
<S>                       <C>     <C>
TYPICAL ANALYSIS          -       2002 EXPECTED AVERAGE CARGO ANALYSIS
[* * * *]                 -       [* * * *]
[* * * *]                 -       [* * * *]
LETTER "V" DENOTES        -       ANALYSIS TO BE PROVIDED ON EACH VESSEL SHIPMENT OF PELLETS
LETTER "SA" DENOTES       -       ANALYSIS TO BE DONE ON A COMPOSITE SAMPLE OF SEMI-ANNUAL
                                  VESSEL SHIPMENTS
</TABLE>
<PAGE>

                              CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                   SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                    COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                                    EXHIBIT 2

                            PRICE ADJUSTMENT FORMULA

                     EMPIRE, HIBBING, AND NORTHSHORE PELLETS

                           FOR YEARS 2003 THROUGH 2016

CURRENT YEAR'S PRICE ADJUSTMENT CALCULATION
    1.       SECTION 5(d)

    [* * * *]                                       X   [* * * *] =   A

                               [* * * *]

             A    X    Preceding Year's Adjusted    =   Current Year's Price
                       Price Per Iron Unit              Adjustment Per Iron Unit

CURRENT YEAR'S ADJUSTED PRICE PER IRON UNIT

Current Year's Price     +  Preceding Year's        =  Current Year's Adjusted
Adjustment Per Iron Unit    Adjusted Price Per Iron    Price Per Iron Unit
                            Unit

CURRENT YEAR'S ESTIMATED PELLET PRICE PER TON

Current Year's Adjusted  X   Current Year's Expected  = Current Year's Estimated
Price Per Iron Unit          Natural Iron Content       Pellet Price Per Ton

<PAGE>
                              CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                   SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                    COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                                    EXHIBIT 3

                                [* * * *] FORMULA

                     EMPIRE, HIBBING, AND NORTHSHORE PELLETS

                           FOR YEARS 2003 THROUGH 2016

<TABLE>
<CAPTION>
           EXAMPLE 1   EXAMPLE 2    EXAMPLE 3   EXAMPLE 4   EXAMPLE 5   EXAMPLE 6
<S>        <C>         <C>          <C>         <C>         <C>         <C>
[* * * *]  [* * * *]   [* * * *]    [* * * *]   [* * * *]   [* * * *]   [* * * *]
</TABLE>
<PAGE>

                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.

                                    EXHIBIT 4

                          SUBSTITUTE [* * * *] EXAMPLE
                                    [* * * *]
                           FOR YEARS 2002 THROUGH 2016

Contract [* * * *]

Contract [* * * *]

In The Event That [* * * *] Annual Total [* * * *] Are Less Than [* * * *], Then
Steel And Cliffs Agree To Substitute Another [* * * *]

- Substitute [* * * *]

DETERMINE SUBSTITUTE [* * * *]

         (1)      Current Year's Actual Average [* * * *] of Substituted
[* * * *] - Prior Year's [* * * *] = A

         (2)      A + [* * * *] = [* * * *]

         (3)      A + [* * * *] = [* * * *]

RESULTS FROM (2) AND (3) ABOVE DETERMINE SUBSTITUTE[* * * *]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]