Term Sheet (the "Term Sheet") for Modification of certain terms of the Pellet Sale and Purchase Agreements by and between Cliffs and Severstal

Parties and Pellet Agreements:                         

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 Group ”), and Northshore Mining Company (“ Northshore ” and together with Cliffs Group, “ Cliffs ”) have agreed to sell iron ore pellets and other related products to Severstal North America, Inc. (“ SNA ”), Severstal Warren Inc., as assignee of WCI Steel, Inc., (“ Severstal Warren ”), and Severstal Wheeling Inc., as assignee of Wheeling-Pittsburgh Steel Corporation (“ Severstal Wheeling ” and together with SNA and Severstal Warren, “ Severstal ”) and Severstal has agreed to purchase such iron ore pellets and related products from Cliffs pursuant to the various agreements described herein.

Dearborn Agreement : Specifically, in connection therewith, Cliffs Group 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 ” and together with the Dearborn Pellet Agreement, the “ Dearborn Agreement ”) related to the sale and purchase of Flux Pellets ¹ 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 (the “ Sparrows Agreement ”) related to the sale and purchase of Iron Units to and for Severstal’s Sparrows Point, Maryland facility (“ Sparrows ”).

Warren Agreement : Cliffs and Severstal Warren are parties to that certain Amended and Restated Pellet Sale and Purchase Agreement dated October 14, 2004, as amended (the “ Warren Agreement ”) related to the sale and purchase of pellets to and for Severstal Warren’s Warren, Ohio facility (“ Warren ”).

¹

All capitalized terms not herein defined shall have the same meaning as set forth in the relevant Pellet Agreement (as defined herein).

Wheeling Agreement : Cliffs Group and Severstal Wheeling are parties to that certain Pellet Sale and Purchase Agreement dated November 1, 2006, as amended (the “ Wheeling Agreement ” and together with the Dearborn Agreement, the Sparrows Agreement, and the Warren Agreement, the “ Agreements ”) related to the sale and purchase of pellets to and for Severstal Wheeling’s Wheeling, West Virginia facility (“ Wheeling ”).

Purpose:

By virtue of this Term Sheet, the Pellet Agreements are hereby modified, but only to the extent that terms of this Term Sheet are inconsistent with the applicable Pellet Agreements.

Dearborn Agreement:

To satisfy the **** Pellets purchase obligations for 2008 under the Dearborn Agreement, SNA shall have a remaining obligation to purchase **** tons of **** Pellets for an approximate purchase price of $****. The first such invoice shall be due and payable on or before December 15, 2008 for **** tons at a purchase price of approximately $****. The final such invoice shall be due and payable on or before December 30, 2008 for **** tons (“Stockpile Tonnage”) at a purchase price of $****. Such tonnage of **** Pellets shall remain in stockpile for SNA at Cliffs’ facilities pending SNA making arrangements to transport such **** Pellets in accordance with the Dearborn Agreement.

For the year 2009, Cliffs Group and SNA hereby agree that the 2009 Annual Nomination for Dearborn shall be reduced to **** tons of **** Pellets. SNA shall retain the right to modify the 2009 Annual Nomination for Flux Pellets in accordance with Section 4 of the Dearborn Agreement, as amended by the April Term Sheet.

SNA has agreed to purchase and pay for no less than **** tons of the 2009 Annual Nomination in four (4) consecutive monthly installment payments as set forth below due and payable on the last Friday of the month (unless otherwise indicated) as further set forth below:

Sparrows Point:

Severstal Sparrows Point hereby agrees to satisfy its payment obligations under the Sparrows Agreement by purchasing the remaining **** tons and paying an amount of approximately $**** in installment payments as set forth below due and payable on or before the 10 ^th day of each month or the first business day after the 10 ^th day of each month as is further set forth below: