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LOCK-UP AGREEMENT STRICTLY CONFIDENTIAL

Lockup Agreement

LOCK-UP AGREEMENT STRICTLY CONFIDENTIAL | Document Parties: Harris Steel Group Inc | Nucor Corporation You are currently viewing:
This Lockup Agreement involves

Harris Steel Group Inc | Nucor Corporation

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Title: LOCK-UP AGREEMENT STRICTLY CONFIDENTIAL
Governing Law: Ontario     Date: 2/28/2007
Industry: Iron and Steel     Law Firm: Moore Van     Sector: Basic Materials

LOCK-UP AGREEMENT STRICTLY CONFIDENTIAL, Parties: harris steel group inc , nucor corporation
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Exhibit 2(i)

LOCK-UP AGREEMENT

STRICTLY CONFIDENTIAL

December 29, 2006

 

TO:

THE PERSONS LISTED ON SCHEDULE "A" HERETO (each such person a "Subject Person" and collectively the "Subject Persons")

This agreement (the "Agreement") sets out the terms and conditions upon which Nucor Corporation ("Nucor") will cause a corporation to be designated by it (the "Offeror") to make an offer (the "Offer") to purchase all of the outstanding common shares ("Shares") of Harris Steel Group Inc. (the "Company").

This Agreement also sets out the terms and conditions of the several and not joint agreements of each Subject Person to: (i) support the Offer; and (ii) to deposit or cause to be deposited the Shares owned or controlled by such Subject Person under the Offer (collectively referred to as the "Subject Shares").

Each Subject Person enters into this Agreement upon the basis that he or she intends to both (i) engage in a re-organization of certain of the holdings of the Shares in which it has a beneficial interest prior to the take-up of the Shares by the Offeror under the Offer; and (ii) use the Holdco Alternative to tender to the offer all or some of their Subject Shares; and Nucor and the Offeror acknowledge and agree that each Subject Person enters into this Agreement upon this basis.

In connection with the Offer, Nucor has entered into a support agreement with the Company dated the date hereof (the "Support Agreement") pursuant to which, among other things, the Company has agreed to support the Offer. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Support Agreement.

 

1

THE OFFER

 

1.1

Subject to the provisions of the Support Agreement, not later than the Latest Mailing Time, Nucor shall cause the Offeror to mail the Offer in accordance with the terms of the Support Agreement. The Offer shall: (i) offer not less than Cdn.$46.25 in cash for each Share; and (ii) expire not earlier than midnight (Toronto time) on the 35 th day after the date of mailing of the Offer, subject to the right of the Offeror to extend the period during which Shares may be deposited under the Offer (as it may be amended, the "Expiry Time"). Notwithstanding any other provision hereof, but subject to the conditions of Section 2.1(2) of the Support Agreement, the Offer will permit the Subject Persons to tender to the Offer through the use of the Holdco Alternative and the Subject Persons shall be permitted to effect all transactions required to reorganize in order to accept the

 

Holdco Alternative. Subject to the satisfaction of the conditions of the Offer as contemplated in Section 1.2 below, Nucor shall abide by and perform its obligations under this agreement, the Support Agreement and the Offer, including, but not limited to, causing the Offeror to take-up and pay for Subject Shares deposited under the Offer (or, if applicable, acquire any Holdco Shares pursuant to and in accordance with the terms and conditions of the Holdco Agreements) as soon as reasonably possible and, in any event, not later than three (3) business days following the time at which the Offeror becomes obligated to take up such Shares under the Offer pursuant to the Securities Act (Ontario) and the regulations thereunder and other applicable securities laws (collectively, "Applicable Securities Laws").

 

1.2

The obligation of Nucor to cause the Offeror to make the Offer and to take up and pay for the Subject Shares under the Offer (or, if applicable, acquire any Holdco Shares pursuant to a Holdco Agreement) shall not be subject to any conditions, save and except for those conditions set out in the Support Agreement (and, in the case of any Holdco Shares, pursuant to the Holdco Agreement with the Subject Person). The conditions to the making of the Offer and of the Offer itself are for the sole benefit of Nucor or the Offeror and may be waived in whole or in part in their sole discretion.

 

1.3

Each Subject Person acknowledges and agrees that the Offeror may, in its sole discretion, modify or waive any term or condition of the Offer; provided that, and the Offeror hereby covenants that, it shall not, without the prior written consent of the Subject Persons and the Company, increase the Minimum Condition, impose additional conditions to the Offer, decrease the consideration per Share, decrease the number of Shares in respect of which the Offer is made or change the form of consideration payable under the Offer (other than to add additional forms of consideration) or in any other respect that is material and adverse to the interests (including economic benefits) of the Subject Persons. It is further understood and agreed that the Offeror may, in its sole discretion, waive any conditions of the Offer in whole or in part at any time that are for the benefit of Nucor or the Offeror.

 

1.4

Nucor hereby covenants to pay to the Subject Person the highest price per Share paid to any other shareholder of the Company pursuant to the Offer, as the same may be extended or varied from time to time.

 

2

COVENANTS OF THE SUBJECT PERSONS

 

2.1

Each Subject Person hereby agrees that he, she or it shall not, from the date hereof until the earlier of: (i) the termination of this Agreement pursuant to Section 5; and (ii) the Expiry Time, except in accordance with the terms of this Agreement:

 

 

(a)

acquire direct or indirect beneficial ownership or holding of or control or direction over any additional Shares or obtain or enter into any right to do so;

 

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(b)

grant or agree to grant any proxy or other right to the Shares, or enter into any voting trust or pooling agreement or arrangement or enter into or subject any of such Shares to any other agreement, arrangement, understanding or commitment, formal or informal, with respect to or relating to the voting thereof;

 

 

(c)

directly or indirectly, through any officer, director, employee, advisor, representative, agent or otherwise (as applicable), make, solicit, assist, initiate, encourage, or otherwise facilitate any inquiries, the submission of proposals or offers from any other person, corporation, partnership or other business organization whatsoever regarding an Acquisition Proposal, participate in any discussions or negotiations regarding any Acquisition Proposal, or otherwise cooperate in any way with, or assist or participate in, knowingly facilitate or encourage, any effort or attempt by any other person to do or seek to do any of the foregoing; provided, however, that the foregoing shall not prevent a Subject Person who is a member of the board of directors of the Company or is a senior officer of the Company (but not any other Subject Person) from responding (solely in his capacity as such) to any bona fide Acquisition Proposal in the circumstances expressly permitted by and in accordance with Section 3.2 of the Support Agreement; provided always that, for greater certainty the Subject Person acknowledges and agrees that nothing in this subsection 2.1(c) or subsection 2.1(f) shall affect the Subject Person’s obligation to tender (and, except as permitted by this Agreement, not withdraw) the Subject Shares to the Offer in accordance with the terms and conditions of this Agreement (or, if applicable, to transfer the Subject Person’s Holdco Shares to the Offeror in accordance with the terms and conditions of the Holdco Agreement between the Subject Person and the Offeror);

 

 

(d)

option, dispose of, pledge, encumber, grant a security interest in or otherwise convey any Shares or any right or interest therein, or agree to do any of the foregoing except pursuant to the Offer or in connection with any internal re-organization in preparation for using the Holdco Alternative;

 

 

(e)

except as required by applicable law, prior to the public announcement by Nucor and the Company of the Offer, directly or indirectly, disclose to any person, firm or corporation (other than the Company and the financial and legal advisors of the Company) the existence of the terms and conditions of this Agreement, or any terms or conditions or other information concerning the Offer; and

 

 

 

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(f)

not take any action to encourage or assist any other person to do any of the prohibited acts referred to in foregoing provisions of this Section 2.1, provided however, that the foregoing shall not prevent a Subject Person who is a director or officer of the Company from performing his, her or its duties or obligations as a director or officer of the Company.

 

2.2

Each Subject Person hereby agrees that he, she or it shall, from the date hereof until the earlier of: (i) the termination of this Agreement pursuant to Section 5; and (ii) the Expiry Time, except in accordance with the terms of this Agreement:

 

 

(a)

immediately cease any existing discussions or negotiations it is engaged in with any parties other than Nucor with respect to any potential Acquisition Proposal; provided, however, that the foregoing shall not prevent a Subject Person who is a member of the board of directors of the Company or is a senior officer of the Company (but not any other Subject Person) from responding (solely in his capacity as such) in the circumstances expressly permitted by and in accordance with Section 3.2 of the Support Agreement; provided always that, for greater certainty the Subject Person acknowledges and agrees that nothing in this subsection 2.2(a) shall affect the Subject Person’s obligation to tender (and, except as permitted by this Agreement, not withdraw) the Subject Shares to the Offer in accordance with the terms and conditions of this Agreement (or, if applicable, to transfer the Subject Person’s Holdco Shares to the Offeror in accordance with the terms and conditions of the Holdco Agreement between the Subject Person and the Offeror).

 

 

(b)

as soon as reasonably practicable notify Nucor of: (i) any proposal, inquiry, offer or request that the Subject Person receives, or of which the Subject Person becomes aware, that the Subject Person reasonably believes constitutes a bona fide Acquisition Proposal; or (ii) any request that the Subject Person receives for discussions or negotiations, or any request for non-public information relating to the Company or any of its subsidiaries or for access to the properties, books or records of the Company or any of its subsidiaries by any person or entity that informs him, her or it that it is considering making, or has made, an Acquisition Proposal. Such notice to Nucor shall be made, from time to time, orally and in writing and shall include a description of the terms and conditions of, and the identity of the person making, any proposal, inquiry, offer or request and shall include copies of any such proposal, inquiry, offer or request or any amendment to any of the foregoing; and

 

 

 

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(c)

exercise the voting rights attaching to the Subject Shares, solely in its capacity as a shareholder, to oppose any proposed action by the Company, its shareholders, any of its subsidiaries or any other person: (i) in respect of any amalgamation, merger, sale of the Company’s or its affiliates’ or associates’ assets, take-over bid, plan of arrangement, reorganization, recapitalization, or other business combination or similar transaction involving the Company or any of its subsidiaries other than the Offer; (ii) which would reasonably be regarded as being directed towards or likely to prevent or delay the take-up and payment of the Subject Shares deposited under the Offer, the implementation of or entering into a Holdco Alternative or the successful completion of the Offer, including without limitation any amendment to the articles or by-laws of the Company or its corporate structure; or (iii) which would reasonably be expected to result in a Material Adverse Effect in respect of the Company. In connection therewith, the Subject Person hereby appoints and Nucor as attorney in fact (which appointment is unconditional, irrevocable (subject to Section 5), and is coupled with an interest) for and on his behalf to execute a proxy appointing such person designated by Nucor to attend and act on behalf of the Subject Person at any meeting of the Company in respect of any of the matters referred to in this subsection 2.2(c), and if, pursuant to this power of attorney, Nucor has executed and not revoked a proxy in respect of such a meeting, which proxy has been accepted by the Company, then in such circumstances the Subject Person shall not be responsible for voting under this subsection 2.2(c). Nucor shall advise the Subject Person upon executing any proxies in respect of the Subject Person.

 

2.3

Each Subject Person, in its capacity as a shareholder, covenants to use reasonably commercial efforts to co-operate with Nucor and the Offeror in making all requisite regulatory filings under applicable competition Laws and Securities Laws.

 

3

AGREEMENT TO TENDER

 

3.1

Subject to the terms and conditions herein, each Subject Person agrees to accept the Offer and to cause to be deposited and cause all acts and things to be done to deposit all of the Subject Shares owned or controlled by such Subject Person and, in any event, not less than the number of Shares set forth opposite such Subject Person’s name on Schedule A hereto, together with a duly completed and executed letter of transmittal, under the Offer on the terms and conditions set out herein.

 

3.2

Each Subject Person agrees that if the Offeror makes the Offer in compliance with Section 1.1 and Section 1.2, such Subject Person shall, unless the Subject Person

 

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properly makes a Holdco Election in which case Section 3.3 shall apply, deposit or cause to be deposited with the depositary under the Offer, prior to the Holdco Election Deadline, all of the Subject Shares in accordance with the terms of the Offer, and thereafter, except as may be permitted by this Agreement, such Subject Person shall not withdraw or take any action to withdraw any of such Subject Person’s Subject Shares deposited under the Offer (notwithstanding any statutory rights or other rights under the terms of the Offer or otherwise which such Subject Person might have). In the event such Subject Person does not make a Holdco Election, such Subject Person nevertheless hereby agrees to comply with and be bound by the covenants set forth in section (c) ‘Bump Covenants’ in Schedule "D" of the Support Agreement and agrees to execute an agreement to that effect.

 

3.3

If the Offeror makes the Offer in compliance with Section 1.1 and Section 1.2 hereof, the Subject Person shall be entitled to make a Holdco Election prior to the Holdco Election Deadline in compliance with Section 2.1(2) of the Support Agreement, in which case Nucor, the Offeror and the Subject Person will be required to enter into a Holdco Agreement and Holdco Indemnity Agreement providing for the acquisition by the Offeror of the Holdco Shares that are the subject of the Holdco Election. The Subject Person shall tender or deposit or cause to be deposited with the depositary under the Offer, prior to the Holdco Election Deadline, all of the Shares held and, on the date immediately prior to the Expiry Date, all Holdco Shares. The Holdco Shares that are the subject of the Holdco Agreement will be acquired by the Offeror in accordance with the terms and conditions of such Holdco Agreement, and the certificates representing the Subject Shares that were tendered to the depositary and acquired by the Offe


 
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