Exhibit 10(b)
Confidential
treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed
separately with the Securities and Exchange
Commission.
Term Sheet (the
“Term Sheet”) for Modification of certain terms of the
Pellet Sale and
Purchase
Agreements by and between Cliffs and Severstal
Dated and
Effective June 15, 2009
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1. Parties and
Pellet
Agreements:
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Cliffs Sales
Company (“ Cliffs Sales ”), The Cleveland-Cliffs
Iron Company (“ Cliffs Iron ”), Cliffs Mining
Company (“ Cliffs Mining ” and together with
Cliff Sales and Cliffs Iron, “ Cliffs ”), have
agreed to sell iron ore pellets and other related products to
Severstal North America, Inc. (“ SNA ” or
“ Severstal ”) and Severstal has agreed to
purchase such iron ore pellets and related products from Cliffs
pursuant to the various agreements.
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Dearborn
Agreement : Specifically, in connection
therewith, Cliffs and SNA are parties to that certain Amended and
Restated Pellet Sale and Purchase Agreement dated January 1,
2006 (the “ Dearborn Pellet Agreement ”), as
amended by the April 29, 2008 Term Sheet for Amendment and
Extension of the Amended and Restated Pellet Sale and Purchase
Agreement (the “ April Term Sheet ”), Term Sheet
for Modification of Certain Terms of Pellet Sale and Purchase
Agreement by and between Cliffs and Severstal dated and effective
December 15, 2008 (the “ December 2008 Term Sheet
”) and together with the April Term Sheet and the Dearborn
Pellet Agreement, the “ Dearborn Agreement ”)
related to the sale and purchase of Flux Pellets
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to and for
SNA’s Dearborn, Michigan facility (“ Dearborn
”).
Sparrows
Agreement : SNA and Cliffs Sales are
parties to that certain Agreement for Sale of Reclaimed Iron Ore
Units dated May 21, 2008 as modified by the December 2008 Term
Sheet (the “ Sparrows Agreement ”) related to
the sale and purchase of Iron Units to and for Severstal’s
Sparrows Point, Maryland facility (“ Sparrows
”).
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2.
Purpose:
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By virtue of this
Term Sheet, the Dearborn Agreement and the Sparrows Agreement are
hereby modified, but only to the extent that terms of this Term
Sheet are inconsistent with the terms of the Dearborn Agreement and
the Sparrows Agreement. All other terms and conditions as detailed
in these Agreements remain in full force and effect.
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All capitalized
terms not herein defined shall have the same meaning as set forth
in the relevant Dearborn Agreement or Sparrows Agreement, as the
case may be.
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Confidential
treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed
separately with the Securities and Exchange
Commission.
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3. Dearborn
Agreement:
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For the year
2009, Cliffs and SNA hereby agree that the 2009 Annual Nomination
for Dearborn shall be reduced by **** tons (the “Waived
Tonnage”) to **** tons from **** tons of **** Pellets
provided that SNA timely complies with all of SNA’s
obligations to Cliffs under this Term Sheet and the Dearborn
Agreement and the Sparrows Agreement. Such tonnage to be purchased
hereunder shall be priced at $**** per gross ton (U.S. $**** per
gross ton iron unit at an expected natural iron content of ****%)
f.o.b. Port of Marquette, Michigan and shall be paid for by wire
transfer of immediately available funds as follows:
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Tonnage
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Payment
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Pre-paid
Credit
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Net
Payment
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Payment
Date
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****
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****
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****
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****
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****
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SNA maintains the
same remedies if Flux Pellets fail to meet the required iron
content as set forth Dearborn Agreement. The remaining tonnage of
the 2009 Annual Nomination is to be priced in accordance with
Paragraph 4A of this Term Sheet. SNA shall have no further right to
modify the 2009 Annual Nomination.
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4.
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SNA hereby agrees
to satisfy its payment obligations under the Sparrows Agreement
by:
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A. Purchasing ****
tons of **** Pellets at $**** per gross ton f.o.b. **** Mine for
consumption at Dearborn and paying for such pellets as
follows:
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Payment
Amount
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Payment
Date
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