EXHIBIT 10.1
 
INVESTOR RIGHTS AGREEMENT
 
THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of September 2,
2010, by and among Toshiba Corporation, a Japanese corporation (“Toshiba”),
Babcock & Wilcox Investment Company, a Delaware corporation (“B&W”, and together
with Toshiba, the “Investors”), and USEC Inc., a Delaware corporation (the
“Company”).  The Investors and the Company are referred to herein collectively
as the “Parties”, and each individually as a “Party”.
 
 
RECITALS
 
WHEREAS, the Investors and the Company are parties to a Securities Purchase
Agreement, dated as of May 25, 2010 (the “SPA”), providing for the Company’s
issuance and sale to the Investors of shares of Series B-1 12.75% Convertible
Preferred Stock of the Company, par value $1.00 per share and the Series B-2
11.5% Convertible Preferred Stock of the Company, par value $1.00 per share
(together, the “Preferred Stock”), and certain other transactions, in each case
on the terms set forth therein (collectively, the “Transaction”); and
 
WHEREAS, the Parties are entering into this Agreement concurrently with the
consummation of the First Closing under the SPA, in accordance therewith.
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the
Parties agree as follows:
 
ARTICLE I                      
 

 
INVESTOR DIRECTORS
 
1.1 Information Rights.  For so long as an Investor Director continues to serve
as a Director, the Company shall provide such Investor Director with all
information made available to other Directors, as and when so made available to
such other Directors; provided, however, that the Company shall not provide to
(a) any Investor Director that is or is appointed or elected by a non-U.S.
Person, any Classified Information or Export Controlled Information, except as
permitted by an approved Negation Plan or applicable Laws, or (b) any Investor
Director, any Competitively Sensitive Information.
 
1.2 Indemnification and Insurance.
 
 
(a) For so long as an Investor Director continues to serve as a Director, and
for a period of six (6) years thereafter:
 
(i) (x) The Company shall, to the extent permitted by applicable Laws, indemnify
and hold harmless all current and former Directors on terms that are no less
favorable than the provisions contained in the Certificate of Incorporation and
Bylaws of the Company as of the date hereof, and (y) such provisions shall not,
except as required to comply with changes in applicable Laws, be amended,
repealed or otherwise modified in any manner that would adversely affect the
rights of such Directors; and
 
(ii) The Company shall maintain in full force and effect Directors’ and
officers’ liability insurance (“D&O Insurance”) in reasonable amounts from
established and reputable insurers on terms no less favorable in the aggregate
than those now applicable to Directors and officers of the Company, to the
extent commercially reasonably available.
 
 
(b) In all D&O Insurance policies, each Investor Director shall be covered as an
insured in such a manner as to provide the Investor Director with rights and
benefits no less favorable than provided to the other Directors.
 
 
(c) Notwithstanding the foregoing, the Company shall not be obligated to make
annual premium payments for D&O Insurance to the extent that such premiums
exceed three hundred percent (300%) of the annual premiums paid as of the date
hereof by the Company for such insurance (such three hundred percent (300%)
amount, the “Maximum Premium”).  If such insurance coverage cannot be obtained
at all, or can only be obtained at an annual premium in excess of the Maximum
Premium, the Company shall maintain the most advantageous policies of D&O
Insurance obtainable for an annual premium equal to the Maximum Premium;
provided, that in all events the coverage for the Investor Directors shall be no
less favorable than that accorded to any other Director of the Company.
 
1.3 Qualified Directors.
 
(a) Notwithstanding the right of the Investors to elect the Investor Directors,
no Investor Director shall be, and no Investor shall have the right to elect an
Investor Director who is a director, officer or employee of, works for or on, or
is assigned to any Competitor Affiliate (as defined in the Strategic
Relationship Agreement dated as of May 25, 2010, by and among the Parties) of an
Investor (any such Person engaged in such activities or having such position or
capacity shall be considered “Unqualified”).
 
(b) Each Investor hereby covenants that for a period of eighteen (18) months
after such Investor Director no longer serves as a Director, such former
Investor Director will not be permitted to serve as a director, officer or
employee of, or work for, or be assigned to any Competitor Affiliate of such
Investor.
 
(c) For the avoidance of doubt, the Parties agree that Westinghouse Electric
Company, LLC, is not a Competitor Affiliate of Toshiba.
 
(d) If at any time an Investor Director becomes Unqualified, the Investors
hereby agree to promptly cause such Investor Director to resign from the Board
and take all other actions necessary to effect such removal, including acting by
written consent, to remove such Investor Director from the Board.
 
ARTICLE II                                
 

 
APPROVAL RIGHTS
 
2.1 Special Approval Rights.  Following the Third Closing, for so long as either
Investor maintains its Minimum Equity Holdings, the Company shall not (and shall
not permit any of its Subsidiaries to) adopt a plan of complete or partial
dissolution or liquidation of the Company (other than in connection with a
merger, sale of substantially all of the Company’s assets or other business
combination transaction) without the prior written approval of the holders of a
majority of the Preferred Stock then outstanding (voting together as a single
class).
 
2.2 Minimum Equity Holdings.  An Investor will be deemed to maintain its
“Minimum Equity Holdings”:
 
(a) (1) from the date of the First Closing until December 31, 2016, so long as,
at any time and from time to time, (1) the Original Issue Value (as defined
below) of all of the then-outstanding shares of the Preferred Stock acquired by
such Investor in the Closings (excluding PIK Shares and shares acquired upon
exercise of the Warrants), plus (2) for each share of Series C Preferred Stock
then held by such Investor, excluding those shares of Series C Preferred Stock
issued upon exercise of the Warrants, the Base Price upon which such Investor’s
acquisition of such shares was calculated, plus (3) the aggregate Base Price for
each share of the Class B Common Stock received upon conversion of the Preferred
Stock then held by such Investor, plus (4) the aggregate amount of accrued and
unpaid Dividends on such Investor’s outstanding shares of Series B Preferred
Stock which have been added to the Liquidation Preference pursuant to Section
5(a) of the Series B-1 Certificate of Designation or the Series B-2 Certificate
of Designation, as applicable (collectively, such Investor’s “Aggregate
Outstanding Value”) exceeds seventy-five percent (75%) of the aggregate Initial
Liquidation Preference of all of the shares of the Preferred Stock issued in the
Closings to such Investor, excluding PIK Shares and shares of Class B Common
Stock and Series C Preferred Stock acquired on the exercise of Warrants (such
Investor’s “Original Issue Value”); and
 
(b) after December 31, 2016, so long as such Investor’s Aggregate Outstanding
Value exceeds fifty percent (50%) of such Investor’s Original Issue Value.
 
In each case, for purposes of determining Aggregate Outstanding Value and
Original Issue Value, if there has been an automatic redemption pursuant to
Section 7(g) of the Series B-1 Certificate of Designation, subsequent to a
Conversion Election, Section 8(c) of the Series B-1 Certificate of Designation
or Section 8(c) of the Series B-2 Certificate of Designation (each, an
“Automatic Redemption”), the aggregate amount of the Liquidation Preference as
of the date of redemption of such Investor’s Securities (excluding PIK Shares
and shares acquired upon exercise of the Warrants) so redeemed shall be added to
such Investor’s Aggregate Outstanding Value and the aggregate amount of the
Liquidation Preference as of the date of redemption of such Investor’s
Securities so redeemed shall be added to such Investor’s Original Issue Value;
provided, however, that, if at any time after any Automatic Redemption, such
Investor’s Deemed Holder Percentage is less than eight percent (8%), then such
adjustment to Aggregate Outstanding Value and Original Issue Value shall not be
made for purposes of determining such Investor’s Investor Director appointment
rights under the Transaction Documents; for the avoidance of doubt, such
adjustment shall continue to be made for purposes of determining any other
rights of such Investor, including any rights of such Investor under Article II
of the Strategic Relationship Agreement.
 
ARTICLE III                                
 

 
SUBSCRIPTION RIGHTS
 
3.1 Subscription Rights.
 
(a) If the Company proposes to sell shares of any preferred stock (other than
Preferred Stock or in exchange therefore) (“Additional Securities”), including
in a private placement, a public offering, as part of an acquisition, share
exchange or otherwise, the Company shall, at least thirty (30) days prior to
issuing such Additional Securities, notify each Investor in writing of such
proposed issuance specifying the material terms and conditions thereof,
including: (i) the number and description of such Additional Securities proposed
to be issued and the percentage of the Company’s outstanding equity interests
that such issuance would represent; (ii) the proposed issuance date; and (iii)
the form of consideration and the proposed purchase price per share (such
notice, the “Subscription Right Notice”), and shall, subject to the receipt by
the Company of any required Nuclear and National Security Approvals (and to the
Company’s compliance with Section 3.7 in respect thereof), offer to sell such
Additional Securities to the Investors in the amounts set forth in
Section 3.1(c), upon the terms and subject to the conditions set forth in the
Subscription Right Notice and at the Purchase Price as set forth in
Section 3.1(d) (the “Subscription Rights”); provided, that, if the purchase
price for, or any of the other material terms and conditions of, the proposed
issuance change or are not known at the time of provision of the Subscription
Right Notice, the Company shall provide the Subscription Right Notice specifying
that the price or other such terms and conditions are not yet available, and
shall provide a supplemental notice (the “Additional Notice”), adding the
missing terms, to the Investors as soon as they are known to the Company, and in
no event later than ten (10) Business Days prior to such issuance.
 
(b) If an Investor wishes to subscribe for a number of Additional Securities
less than the number to which it is entitled under this Section 3.1, such
Investor may do so (but not less than 10% of the number to which it is entitled)
and shall, in the notice of exercise of the offer, specify the number of
Additional Securities that it wishes to purchase, which shall not be less than
10% of the shares to which it is entitled.
 
(c) The Company shall offer each Investor all, or any portion specified by the
Investor in accordance with Section 3.1(b), of an amount of such Additional
Securities such that, after giving effect to the proposed issuance (including
the issuance to the Investor pursuant to the Subscription Rights and including
any related issuance resulting from the exercise of preemptive or similar rights
by any unrelated Person with respect to the same issuance that gave rise to the
exercise of the Subscription Rights by the Investor), the Investor’s Equity
Interest after such issuance would equal the Investor’s Equity Interest
immediately prior to such issuance, such number of Additional Securities to
constitute the “Subscription Share Amount”.  If, at the time of the
determination of any Subscription Share Amount under this Section 3.1(c), any
other Person has subscription or other equity purchase rights similar to the
Subscription Rights, such Subscription Share Amount shall be recalculated to
take into account the amount of Additional Securities such Persons have
committed to purchase, rounding up such Subscription Share Amount to the nearest
whole Additional Security.
 
(d) The “Purchase Price” for the Additional Securities to be issued pursuant to
the exercise of Subscription Rights shall be payable to the extent practicable,
in the same form of consideration set forth in the Subscription Right Notice
(unless otherwise agreed by the Company and the applicable Investor) and, except
as otherwise set forth below, shall equal per Additional Security the per
Security issuance price for the Additional Securities giving rise to such
Subscription Right.  In the case of any issuance of Additional Securities other
than solely for cash, the Company and each Investor making a non-cash payment
shall in good faith seek to agree upon the value of the non-cash consideration;
provided, that the value of any publicly traded securities shall be deemed to be
the closing price of such securities on the applicable national securities
exchange as of the Trading Day immediately prior to the consummation of such
issuance.  If the Company and such Investor fail to agree on the value of such
non-cash consideration during the period contemplated by the first sentence of
Section 3.2, then the Company shall refer the items in dispute to a nationally
recognized investment banking firm that is selected by the Board and acceptable
to the Investor and that shall be instructed to make a final and binding
determination of the fair market value of such items within ten (10) Business
Days.  If such a determination is required, the deadline for an Investor’s
exercise of its Subscription Rights with respect to such issuance pursuant to
Section 3.1(b) shall be extended until the fifth (5th) Business Day following
the date of such determination.  Whichever of the Company or the Investor whose
last estimate communicated in writing to the other party differed in dollar
value the most from that finally determined by such investment banking firm
shall be responsible for and pay all of the fees and expenses of such investment
banking firm.  All determinations made by such investment banking firm shall be
final and binding on the Company and the Investor.
 
3.2 Exercise Period.  The Subscription Rights set forth in Section 3.1 must be
exercised by acceptance in writing of an offer referred to in Section 3.1(a)
deliverable to the Company within ten (10) Business Days of receiving notice
from the Company of its intention to sell Additional Securities, or, if
applicable and later, within ten (10) days of any Additional Notice.  The
closing of any purchase of Additional Securities pursuant to the exercise by the
Investor of Subscription Rights hereunder shall occur on the closing of the
transaction triggering such Subscription Rights, subject to the receipt of any
necessary Governmental Approvals to which the issuance of Additional Securities
is subject (and the Company shall use its commercially reasonable efforts to
obtain such Governmental Approvals).
 
3.3 Sales to the Prospective Buyer.  If an Investor fails to elect to purchase
all or part of its allotment of the Additional Securities described in the
Subscription Right Notice within the time period described in Section 3.2, the
Company shall be free to complete the proposed issuance or sale of Securities
described in the Subscription Right Notice at a price and on other terms no less
favorable to the Company than those set forth in the Subscription Right
Notice.  If the Company does not enter into such an agreement for the sale of
such Securities within thirty (30) Business Days after the expiration of the
time period described in Section 3.2, or if such agreement is not consummated
within ninety (90) days after the execution thereof, such Subscription Rights
shall be deemed to be revived and such Additional Securities shall not be issued
or sold unless first reoffered to the Investors in accordance with this
Article III.
 
3.4 Survival of Rights.  The rights of an Investor set forth in this Article III
shall continue for so long as such Investor maintains its Minimum Preferred
Holdings.
 
3.5 No Subscription Rights for Third Party Financing.  Notwithstanding anything
to the contrary set forth herein, the Investors shall not be entitled to their
respective Subscription Rights with respect to issuances of securities in a
Third Party Financing.
 
3.6 No Additional Funding Obligations.  For the avoidance of doubt, the
Investors shall not have any obligation to fund or provide financial support of
any kind (whether fixed, contingent, conditional or otherwise) to the Company
beyond their respective obligations as to the Closings as set forth in the SPA.
 
3.7 Nuclear and National Security Approvals.  The Company shall use all
commercially reasonable efforts to obtain any Nuclear and National Security
Approvals required with respect to the Investors’ exercise of their respective
rights under this Agreement, and each Investor shall reasonably cooperate with
the Company in such efforts.
 

 
ARTICLE IV                                
 

 
REGISTRATION RIGHTS
 
4.1 Shelf Registration Statement.
 
(a) The Company shall, no later than the Filing Date, file with the SEC a Shelf
Registration Statement (the “Initial Shelf”) relating to the offer and sale of
the Registrable Securities by the Investors from time to time to permit the sale
of Registrable Securities by the Investors pursuant to the Orderly Sale
Arrangement set forth in Section 9 of the SPA and, thereafter, shall use its
best efforts to cause the Initial Shelf to be declared effective under the
Securities Act no later than ninety (90) calendar days following the date first
filed with the SEC.  None of the Company’s securityholders (other than the
Investors) shall have the right to include any Securities of the Company on the
Initial Shelf.
 
(b) For so long as either Investor holds any Registrable Securities, the Company
shall use its best efforts to maintain an effective Shelf Registration Statement
registering all unsold Registrable Securities.  Subject to Section 4.3, the
Company shall use its best efforts to keep a Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 4.3(i), in order to permit the Prospectus forming a part thereof to
be usable by the Investors until the date that the Investors no longer hold
Registrable Securities (such period, the “Resale Period”).  The Company shall be
deemed not to have used its best efforts to keep a Shelf Registration Statement
effective during the Resale Period if the Company voluntarily takes any action
that would result in the Investors’ not being able to offer and sell any of such
Registrable Securities under such Shelf Registration Statement during that
period, unless such action is (x) required by applicable Laws and the Company
thereafter promptly complies with the requirements of Section 4.3 or (y)
permitted pursuant to Section 4.3.
 
(c) For the avoidance of doubt, nothing in this Agreement shall require the
Company to undertake or otherwise support an underwritten offering of
Registrable Securities unless the Company determines to do so in its sole
discretion.
 
(d) For the avoidance of doubt, any sale made pursuant to the Initial Shelf
shall be subject to the Orderly Sale Arrangement set forth in Section 9 of the
SPA.
 
4.2 Piggyback Rights.
 
(a) If at any time an Investor is in possession of Registrable Securities and
the Company proposes to effect an underwritten registration of any of its
securities (other than in a Third Party Financing) under the Securities Act
(other than any registration of Securities on Form S-4 or Form S-8 or any
successor forms), for its own account, or for the account of one or more
stockholders of the Company (other than pursuant to the Initial Shelf) (each, a
“Proposed Registration”), the Company shall give prompt written notice to the
Investors of the Company’s intention to do so.  If an Investor’s Registrable
Securities have not been included in the Proposed Registration, and within ten
(10) Business Days of the receipt of any such notice such Investor delivers to
the Company a written notice requesting to have any or all of its Registrable
Securities included in such Proposed Registration (such notice to include the
number of Registrable Securities that the Investor wishes to be included in the
Proposed Registration), the Company shall use its commercially reasonable
efforts to cause such shares to be registered as requested in such
notice.  Notwithstanding any other provision of this Section 4.2(a), if the
managing underwriter advises the Company that marketing factors require a
limitation of the number of shares to be underwritten, the Company may limit the
number of shares of Registrable Securities to be included in the Proposed
Registration without requiring any limitation in the number of shares to be
registered on behalf of the Company; provided, however, that the number of
Registrable Securities included in the Proposed Registration pursuant to this
Section 4.2(a) may not be reduced to less than twenty-five percent (25%) of the
total number of shares requested by the Investors to be included in the Proposed
Registration (the “Cut Back Limit”), and any such cut back will be implemented
on a pro rata basis according to the number of shares requested by each Investor
to be included in the Proposed Registration; provided, further, that nothing
herein shall prevent the Company from canceling or withdrawing any Proposed
Registration prior to the filing or effectiveness thereof.  Registrable
Securities held by the Investors proposed to be included on a Proposed
Registration shall have priority over all securities proposed to be included on
such Registration Statement other than (i) securities to be sold by the Company
unless the following clause (ii) applies, or (ii) if the Proposed Registration
is pursuant to contractual demand rights of another Person, securities proposed
to be included by such Person, which shall, subject to the Cut Back Limit, have
priority over the Registrable Securities on such Registration Statement.
 
(b) No Investor’s Registrable Securities shall be registered unless such
Investor accepts the terms of the underwriting as approved by the Company for
the offering; provided that the Investor may independently negotiate with the
underwriters for the offering any representations and warranties that the
Investor shall give to such underwriters in connection with the offering.  In
the event that an Investor is unable to agree with such underwriters on such
representations and warranties or does not accept the terms of such
underwriting, then the Company may proceed with the Proposed Registration
without the participation of such Investor or the inclusion of any of such
Investor’s Registrable Securities.
 
4.3 Registration Procedures.  In connection with the Registration Statements,
the following provisions shall apply:
 
(a) The Company shall furnish to each Investor, prior to the Effective Time, a
copy of any Registration Statement filed with the SEC (or to be filed in the
case of an automatically effective Registration Statement), and shall furnish to
each Investor, prior to filing with the SEC, copies of each amendment thereto
and each amendment or supplement, if any, to the Prospectus included therein,
and shall in good faith consider the reasonable comments suggested by such
counsel, including consideration of inclusion thereof in the Registration
Statement or Prospectus.  The Company shall deliver promptly to counsel to the
Investors and to each underwriter, if any, participating in the offering of the
Registrable Securities, copies of all correspondence between the SEC and the
Company, its counsel or its auditors with respect to such Registration
Statement.
 
(b) The Company shall promptly take such action as may be necessary so that (i)
each of the Registration Statements and any amendment thereto and the Prospectus
forming a part thereof and any amendment or supplement thereto (and each report
or other document incorporated therein by reference in each case) complies in
all material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, as in effect at any relevant time,
(ii) each of the Registration Statements and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (iii) each Prospectus forming a part
of any Registration Statement, and any amendment or supplement to such
Prospectus, in the form delivered to purchasers of the Registrable Securities
during the Resale Period, does not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
 
(c) The Company shall promptly advise each Investor, and shall confirm such
advice in writing if requested by either Investor:
 
(i) when any Registration Statement has been filed with the SEC and when any
Registration Statement has become effective;
 
(ii) when any supplement to the Prospectus, Registration Statement or
post-effective amendment to a Registration Statement has been filed with the SEC
and, with respect to a Registration Statement or any post-effective amendment
thereto, when the same has been declared effective by the SEC;
 
(iii) of any SEC comments on, or request by the SEC for amendments or
supplements to, any Registration Statement or the Prospectus included therein or
for additional information;
 
(iv) of the issuance by the SEC of any stop order suspending the effectiveness
of any Registration Statement or the initiation of any proceedings for such
purpose;
 
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the securities included in any Registration
Statement for sale in any jurisdiction or the initiation of any proceeding for
such purpose; and
 
(vi) of the happening of any event or the existence of any state of facts that
requires the making of any changes in any Registration Statement or the
Prospectus included therein so that, as of such date, such Registration
Statement and Prospectus do not contain an untrue statement of a material fact
and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to the Investors to suspend the
use of the Prospectus until the requisite changes have been made).
 
(d) The Company shall use its commercially reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal at the earliest possible time,
of any order suspending the effectiveness of any Registration Statement.
 
(e) As promptly as reasonably practicable, the Company shall furnish to each
Investor, upon their request and without charge, one (1) conformed copy of any
Registration Statement and any amendment thereto, including financial statements
but excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless reasonably requested in writing to
the Company by such Investor).
 
(f) The Company shall, during the period that any Registration Statement is
effective, deliver to each Investor, without charge, as many copies of each
Prospectus included in the applicable Registration Statement and any amendment
or supplement thereto as such Investor may reasonably request; and the Company
consents (except during a Suspension Period or during the continuance of any
event described in Section 4.3(c)(iii)-(vi)) to the use of the Prospectus and
any amendment or supplement thereto by each of the Investors in connection with
the offering and sale of the Registrable Securities covered by the Prospectus
and any amendment or supplement thereto during the period that any Registration
Statement is effective.
 
(g) Prior to any offering of Registrable Securities pursuant to a Registration
Statement, the Company shall use commercially reasonable efforts to (i) register
or qualify or cooperate with the Investors and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or “blue sky” laws of such jurisdictions within the United
States as any Investor may reasonably request in writing, (ii) keep such
registrations or qualifications or exemption therefrom in effect and comply with
such Laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Investor or
underwriter, if any, to complete its distribution of Registrable Securities
pursuant to such Registration Statement, and (iii) take any and all other
actions reasonably necessary to enable the disposition in such jurisdictions of
such Registrable Securities; provided, however, that in no event shall the
Company be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 4.3(g) or (B) subject itself or its Affiliates to
general or unlimited service of process or to taxation in any such jurisdiction
if they are not now so subject.
 
(h) Unless any Registrable Securities shall be in book-entry only form, if
requested, the Company shall cooperate with the Investors to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to any Registration Statement, which
certificates, if so required by any Approved Market upon which any Registrable
Securities are listed, shall be free of any restrictive legends other than those
required by Article ELEVENTH of the Certificate of Incorporation, and in such
permitted denominations and registered in such names as the Investors may
request in connection with the sale of Registrable Securities pursuant to such
Registration Statement.
 
(i) Upon the occurrence of any fact or event contemplated by Section 4.3(c)(vi),
subject to Section 4.3(j), the Company shall use its best efforts to promptly,
but in any event within ten (10) Business Days following such occurrence,
prepare and file (and have declared effective) a post-effective amendment to any
Registration Statement or an amendment or supplement to the related Prospectus
included therein or file any other document with the SEC so that, as thereafter
delivered to purchasers of the Registrable Securities, the Prospectus will not
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.  If the Company notifies the
Investors of the occurrence of any fact or event contemplated by
Section 4.3(c)(vi), the Investors shall suspend the use of the Prospectus until
the requisite changes to the Prospectus have been made, and shall thereafter
distribute the updated Prospectus to purchasers of Registrable Securities to
ensure that the Prospectus received by such purchaser does not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
 
(j) After the Effective Time of any Registration Statement, the Company may
suspend the use of any Prospectus by written notice to the Investors for a
period not to exceed an aggregate of forty-five (45) calendar days in any ninety
(90) calendar day period (each such period, a “Suspension Period”) if:
 
(i) an event has occurred and is continuing as a result of which the
Registration Statement would, in the Company’s judgment, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
 
(ii) the Company determines in good faith that the disclosure of such event at
such time would have a material adverse effect on the Company and its
Subsidiaries taken as a whole;
 
provided, that in the event that such disclosure relates to a previously
undisclosed proposed or pending material business transaction, the disclosure of
which would impede the Company’s ability to consummate such transaction, the
Company may extend the applicable Suspension Period from forty-five (45)
calendar days to ninety (90) calendar days; provided, however, that Suspension
Periods (including, without limitation, any such extension of a Suspension
Period) shall not exceed an aggregate of one hundred twenty (120) calendar days
in any three hundred sixty (360) calendar day period.  Each Investor shall keep
confidential any communications received by it from the Company regarding the
suspension of the use of the Prospectus, except as required by applicable Laws.
 
(k) The Company shall enter into such customary agreements and take all such
other necessary actions in connection therewith (including those reasonably
requested by any Investor) in order to expedite or facilitate disposition of
such Registrable Securities; provided, that the Company shall not be required to
take any action in connection with an underwritten offering without the
Company’s consent (such consent not to be unreasonably withheld, conditioned or
delayed).
 
(l) To the extent permitted by Law, the Company shall (i) make reasonably
available for inspection by any Investor and by any underwriter participating in
any disposition pursuant to any Registration Statement, and by any attorney,
accountant or other agent retained by such Investor or any such underwriter, all
relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and (ii) cause the Company’s
officers, Directors and employees to make reasonably available for inspection
all information reasonably requested by any Investor or any such underwriter,
attorney, accountant or agent in connection with such Registration Statement, in
each case, as is customary for similar due diligence examinations; provided,
however, that such Persons shall, at the Company’s request, first enter into the
Company’s standard confidentiality agreement, which, among other things,
requires that confidential information shall be used solely for the purposes of
exercising rights under this Agreement, unless such disclosure is made in
connection with a court proceeding or required by Law, or such records,
information or documents become available to the public generally or through a
third party without an accompanying obligation of confidentiality; provided,
further, that, if the foregoing inspection and information gathering would
otherwise disrupt the Company’s conduct of its business, such inspection and
information gathering shall, to the greatest extent possible, be coordinated on
behalf of the Investors and the other parties entitled thereto by one counsel
designated by and on behalf of the Investors and other such parties.
 
(m) The Company shall use its best efforts to furnish to each Investor and, in
any underwritten offering, each underwriter, a signed counterpart of (i) an
opinion of counsel for the Company and (ii) a “comfort” letter signed by the
independent public accountants who have certified the Company’s financial
statements included or incorporated by reference in such Registration Statement,
in each case addressed to each Investor and, if applicable, each underwriter,
covering matters with respect to such Registration Statement (and the Prospectus
included therein) as the managing underwriter, if any, and the Investors shall
request.
 
(n) The Company shall use its best efforts to cause the Registrable Securities
to be listed on the NYSE or other market or stock exchange on which the Ordinary
Common Stock primarily trades on or prior to the Effective Time of each
Registration Statement hereunder.
 
(o) The Company shall cooperate and assist in any filings required to be made
with Financial Industry Regulatory Authority, Inc.
 
(p) The Company shall use its best efforts to take all other steps necessary to
effect the registration, offering and sale of the Registrable Securities covered
by each Registration Statement contemplated hereby, including by taking all
appropriate steps with respect to the marketing of an offering of Registrable
Securities and making its management available to participate in road shows and
other marketing activities in connection therewith.
 
(q) Notwithstanding anything to the contrary set forth herein, the Initial Shelf
and any subsequent Shelf Registration Statement shall be filed as an
automatically effective registration statement if the Company is eligible to do
so.
 
4.4 Registration Expenses.  The Company shall bear all fees and expenses
incurred in connection with the performance by the Company of its obligations
under this Article IV whether or not any of the Registration Statements are
declared effective.  Such fees and expenses shall include, without limitation,
(i) all registration and filing fees (including fees and expenses (x) with
respect to filings required to be made with the Financial Industry Regulatory
Authority, Inc. and (y) of compliance with United States federal and state
securities or “blue sky” laws to the extent that such filings or compliance are
required pursuant to this Agreement (including reasonable fees and disbursements
of the counsel specified in the next sentence in connection with “blue sky”
qualifications of the Registrable Securities under the laws of such
jurisdictions as any Investor may designate)), (ii) printing expenses, (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Investor hereunder, (iv) fees and disbursements of
counsel for the Company in connection with any Registration Statement, (v)
reasonable fees and disbursements of the transfer agent for the Common Stock,
and (vi) all fees for any accountants, including in connection with any comfort
letter.  In addition, the Company shall bear or reimburse the Investors for the
reasonable fees and disbursements of legal counsel for the Investors, which
amount shall not exceed $100,000 in the aggregate.  In addition, the Company
shall pay the internal expenses of the Company (including all salaries and
expenses of officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any Person, including special experts, retained by the Company.
 
4.5 Indemnification and Contribution.
 
(a) Indemnification by the Company.  The Company shall indemnify and hold
harmless each Investor, each underwriter, if any, and each Person, if any, who
controls any such Investor or underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (for purposes of this
Section 4.5(a), each an “indemnified party”), from and against any loss, claim,
damage, liability or expense whatsoever as incurred (including reasonable
attorneys’ fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as any such
loss, claim, damage, liability or expense (or action in respect thereof) arises
out of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any amendment thereto
or any related preliminary prospectus or the Prospectus or any amendment thereto
of supplement thereof, or arises out of, or is based upon, the omission or
alleged omission to state therein any material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company shall not be liable to any such indemnified party in
any such case to the extent that any such loss, claim, damage, liability or
expense arises out of, or is based upon, (i) any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of an indemnified party specifically for use therein;
(ii) an offer or sale by an Investor of Registrable Securities during a
Suspension Period, if such indemnified party is an Investor or an Affiliate of
an Investor that, in either case, received from the Company a notice of the
commencement of such Suspension Period prior to the making of such offer or
sale; or (iii) in a case where a copy of a Prospectus required to be delivered
by such indemnified party, is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in a preliminary Prospectus and a
copy of the amended or updated Prospectus was not sent or given by or on behalf
of such indemnified party to the Person asserting an such loss, claim, damage,
liability or expense (if required by Law so to have been delivered) at or prior
to the written confirmation of the sale of Registrable Securities as required by
the Securities Act and the Prospectus would have corrected such untrue statement
or omission or alleged untrue statement or omission; provided that in clause
(iii) the Company had promptly notified the Investors of such untrue statement
or alleged untrue statement or omission or alleged omission in compliance with
Section 4.3(i).  The foregoing indemnity agreement is in addition to any
liability that the Company may otherwise have to any indemnified party.  The
Company shall not be liable under this Section 4.5(a) for any settlement of any
action effected without its written consent, which shall not be unreasonably
withheld, conditioned or delayed; provided, however, that with respect to
actions pursuant to clauses (i), (ii) and (iii) of Section 4.6(c), no such
consent shall be required.
 
(b) Indemnification by the Investors.  Each Investor, severally and not jointly,
shall indemnify and hold harmless the Company, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (for purposes of this Section 4.5(b), each an
“indemnified party”), from and against any loss, claim, damage, liability or
expense whatsoever as incurred (including reasonable attorneys’ fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as any such loss, claim, damage,
liability or expense (or action in respect thereof) arises out of, or is based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or any amendment thereto or any related
preliminary prospectus or the Prospectus or any amendment thereto or supplement
thereof, or arises out of, or is based upon, the omission or alleged omission to
state therein any material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission made therein was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Investor specifically for use therein.  In no event shall the liability of
any Investor hereunder be greater in amount than the dollar amount of the
proceeds received by such Investor upon the sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such indemnification
obligation, except in the case of fraud, willful misconduct or gross negligence
by an Investor.  The foregoing indemnity agreement is in addition to any
liability that any Investor may otherwise have to the Company and any such
controlling Person.
 
(c) Notices of Claims, Etc.  Promptly after receipt by an indemnified party
under this Section 4.5 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 4.5, notify the indemnifying party in
writing of the claim or the commencement of such action; provided, however, that
the failure to notify the indemnifying party shall not relieve it of any
liability that it may have under this Section 4.5, unless the indemnifying party
is materially prejudiced by such delay or failure.  If any such claim or action
shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party.  After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 4.5 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective directors, employees, officers
and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 4.5 if (i) employment of such counsel has
been authorized in writing by the indemnifying party, or (ii) such indemnifying
party shall not have employed counsel to have charge of the defense of such
proceeding within thirty (30) days of the receipt of notice thereof, or (iii)
such indemnified party shall have reasonably concluded, based upon written
advice of such indemnified party’s counsel, that the representation of such
indemnified party and those directors, employees, officers and controlling
persons by the same counsel representing the indemnifying party would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them or where there may be one or more
defenses available to them that are different from or in conflict with those
available to the indemnifying party, and in any such event ((i), (ii) or (iii))
the fees and expenses of such separate counsel shall be paid by the indemnifying
party as incurred.  It is understood that the indemnifying party shall not be
liable for the fees and expenses of more than one separate firm (in addition to
local counsel in each jurisdiction) for all indemnified parties in connection
with any proceeding or related proceedings.  No indemnifying party shall,
without the prior written consent of the indemnified parties (which shall not be
unreasonably withheld, conditioned or delayed), effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened claim, investigation, action or proceeding in respect of which
indemnity or contribution may be or could have been sought hereunder (whether or
not the indemnified party or parties are actual or potential parties thereto)
unless (1) such settlement, compromise or judgment (x) includes an unconditional
release of such indemnified party from all liability arising out of such claim,
action, suit or proceeding and (y) does not include a statement as to or an
admission of fault, culpability or failure to act by or on behalf of any
indemnified party, and (2) the indemnifying party confirms in writing its
indemnification obligations hereunder with respect to such settlement,
compromise or judgment.
 
(d) Contribution.  To the extent the indemnification provided for in this
Section 4.5 is unavailable to or unenforceable an indemnified party under
Section 4.5(a) or Section 4.5(b), then (i) each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages, expenses or liabilities (or actions in respect
thereof) referred to in Section 4.5(a) or Section 4.5(b) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
registration of the Registrable Securities pursuant to the applicable
Registration Statement, or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable Laws, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations.  The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or such Investor or such other indemnified party, as the case may be, on the
other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this Section 4.5(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim that is the subject of this Section 4.5(d).  The Company and the Investors
agree that it would not be just and equitable if contribution pursuant to this
Section 4.5(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to herein.  Notwithstanding any other provision of this Section 4.5(d), no
Investor of the Registrable Securities shall be required to contribute any
amount in excess of the amount by which the gross proceeds received by such
Investor from the sale of the Registrable Securities pursuant to applicable
Registration Statement exceeds the amount of damages that such Investor has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.  For purposes of this Section 4.5(d), each Person,
if any, who controls such indemnified party within the meaning of the Securities
Act or the Exchange Act shall have the same rights to contribution as such
indemnified party and each Person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.  The Investors’ respective obligations to
contribute pursuant to this Section 4.5(d) are several in proportion to the
respective amount of Registrable Securities that they have sold pursuant to a
Registration Statement and not joint.  The remedies provided for in this
Section 4.5(d) are not exclusive and shall not limit any rights or remedies that
may otherwise be available to any indemnified party at law or in equity.
 
(e) Survival.  The indemnity and contribution provisions contained in this
Section 4.5 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Investor or any Person controlling any Investor, or by or on
behalf of the Company, its officers or Directors or any Person controlling the
Company, and (iii) any sale of Registrable Securities pursuant to any
Registration Statement.
 
4.6 Rule 144 Reporting.  With a view to making available the benefits of certain
rules and regulations of the SEC that may at times permit the sale of
Registrable Securities to the public in the United States without registration
after the Filing Determination Date, the Company shall use its commercially
reasonable efforts to:
 
(a) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act;
 
(b) file, as and when applicable, with the SEC in a timely manner all reports
and other documents required of the Company under the Exchange Act; and
 
(c) furnish to each Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 and the
Exchange Act.
 
4.7 Lock Up.  In connection with any underwritten offering of the Company’s
securities, each Investor and Permitted Holder of Registrable Securities agrees
that upon request of the Company or the underwriters managing any underwritten
offering of the Company’s securities, that it will (a) not offer, sell, contract
to sell, loan, grant any option to purchase, make any short sale or otherwise
dispose of, hedge or transfer any of the economic interest in (or offer, agree
or commit to do any of the foregoing) any shares of Common Stock, or any options
or warrants to purchase any shares of Common Stock, or any securities
convertible into, exchangeable for or that represent the right to receive shares
of Common Stock, whether now owned or hereinafter acquired, owned directly
(including holding as a custodian) or with respect to which such Person has
beneficial ownership within the rules and regulations of the Commission (other
than those included by such Person in the offering in question, if any) without
the prior written consent of the Company or such underwriters, as the case may
be, for up to fourteen (14) days prior to, and during the ninety (90) day period
following, the effective date of the registration statement for such
underwritten offering, and (b) enter into and be bound by such form of agreement
with respect to the foregoing as the Company or such managing underwriter may
reasonably request; provided that each executive officer and director of the
Company also agrees to substantially similar restrictions.  The restrictions set
forth in this Section 4.7 shall terminate, with respect to an Investor and its
Permitted Holders, when such Investor and its Permitted Holders own less than
7.5% of the outstanding Common Stock, after giving effect to such Investor’s and
its Permitted Holders’ Preferred Stock, Series C Preferred Stock and Class B
Common Stock on an as converted basis using the Base Price on the date of the
request of the Company or the underwriters mentioned above of in calculating the
amount of outstanding Common Stock; provided that, unless the SPA is earlier
terminated, no such termination shall be effective until the later of (i) the
Third Closing and (ii) 90 days following completion of a Third Party Financing.
 
ARTICLE V                                
 

 
OTHER AGREEMENTS
 
5.1 Standstill.  From the date hereof until the later of (i) such time as it
ceases to own any Securities and (ii) nine (9) months after the Investors are no
longer entitled to appoint an Investor Director pursuant to the Certificate of
Incorporation (such period, the “Standstill Period”), each Investor agrees that
it shall not and shall cause its Affiliates not to:
 
(a) acquire, or propose to acquire, beneficial ownership of any Securities or
assets, or rights or options to acquire any Securities or assets, of the
Company, including derivative securities representing the right to vote or
economic benefits of any such Securities, other than (i) pursuant to a Permitted
Offer, (ii) the acquisition of Preferred Stock and Warrants pursuant to the
terms and conditions set forth in the SPA, (iii) upon the conversion of
Preferred Stock and Class B Common Stock pursuant to the terms and conditions
set forth in the SPA, the certificates of designation of such Preferred Stock
and the Company’s Certificate of Incorporation, (iv) upon the exercise of
Warrants, pursuant to the terms and conditions set forth in the SPA and such
Warrant, and (v) pursuant to the terms and conditions set forth in Article III
of this Agreement; provided, that the transfer of Securities among the Investors
and to or from any special purpose company formed to hold the beneficial
ownership of such Securities, to the extent in compliance with the transfer
restrictions and procedures set forth in Section 9.1 of the SPA, shall not be
deemed a violation of this Section 5.1(a), provided any such special purpose
company is owned exclusively by the Investors and their controlled Affiliates;
 
(b) make, or effect or commence, any tender or exchange offer, merger or other
business combination involving the Company, other than pursuant to a Permitted
Offer;
 
(c) commence or complete, or propose to commence or complete, any
recapitalization, restructuring, liquidation, dissolution or other extraordinary
transaction with respect to the Company, other than pursuant to a Permitted
Offer;
 
(d) make, or in any way participate in, any Solicitation of proxies to vote or
consent, or seek to advise or influence any Person with respect to the voting
of, any Securities of the Company, or to become a Participant in any Election
Contest with respect to the Company or grant a proxy to any other Person to vote
any Securities held by such Investor;
 
(e) form, join or in any way participate in a 13D Group with respect to, or
otherwise act in concert with any Person in respect of, any Securities of the
Company; provided, that the Investors’ formation of a 13D Group among themselves
and any special purpose company formed to hold the beneficial ownership of such
Securities shall not be deemed a violation of this Section 5.1(e);
 
(f) otherwise act, alone or in concert with others, to seek representation on or
to control or influence the management, the Board or the policies of the
Company, except as expressly granted pursuant to the definitive agreements for
the Transaction or by the Board;
 
(g) negotiate with or provide any information to any Person with respect to, or
make and statement or proposal to any Person with respect to, or make any public
announcement or proposal or offer with respect to, or act as a financing source
for or otherwise invest in any Person in connection with, or otherwise solicit,
seek or offer to effect any transactions or actions that are prohibited pursuant
to this Section 5.1; or
 
(h) advise, assist or encourage any other Person in connection with any
transactions or actions prohibited pursuant to the foregoing (a)-(g).
 
Notwithstanding the foregoing, nothing in this Section 5.1 shall restrict in any
way the actions of any Investor Director in such person’s capacity as a
Director.
 
5.2 Use of Proceeds from the Third Closing.  The Company shall use the proceeds
of the Third Closing in accordance with the funding plan and related provisions
set forth in or established under the definitive agreements for the DOE
Financial Closing.
 
5.3 Waiver of Appraisal and Dissenter’s Rights.  Each Investor shall waive any
appraisal or dissenter’s rights to which they may be entitled under applicable
Laws in connection with any Change of Control of the Company.
 
5.4 Voting Agreement.
 
(a) At any time at which the holders of Series C Preferred Stock and Class B
Common Stock shall be entitled to vote together with the holders of Common Stock
(and any other class or series of capital stock entitled to vote on the matter
with the Common Stock) as a single class with respect to any transactions
involving a merger of the Corporation or sale of all or substantially all of the
Corporation’s assets which must be submitted to the Corporation’s stockholders
pursuant to the Delaware General Corporation Law (a “Transaction Approval”), to
the extent any Investor and its Affiliates in the aggregate beneficially own
shares entitled to exercise voting power exceeding 10% of the aggregate voting
power of such class (“Excess Voting Share”) on such matter, the Investor agrees
to vote (or exercise a written consent in favor of), and to cause any of its
Affiliates to vote (or exercise a written consent in favor of), all such Excess
Voting Shares on such matter as recommended by the Board to stockholders
generally.
 
(b) Each Investor hereby grants to the Company, and each officer of the Company
holding the office of Vice President or Secretary, with full power of
substitution, an irrevocable proxy (the “Proxy”) from the date hereof until the
termination of this Agreement to act as the Investors’ proxy to vote the Excess
Voting Shares, and to exercise all voting, consent and similar rights of the
undersigned with respect to the Excess Voting Shares (including, without
limitation, the power to execute and deliver written consents), at every annual,
special, adjourned or postponed meeting of the stockholders of the Company and
in every written consent in lieu of such a meeting, in each case as and to the
extent provided in Section 5.4(a) in connection with a Transaction Approval.
Each  Investor hereby affirms that the Proxy is given in connection with the
Securities Purchase Agreement and this Agreement and that such Proxy is given to
secure the performance of the duties of Investor under Section 5.4(a).  Each
Investor hereby further affirms that the Proxy is coupled with an interest and
may under no circumstances be revoked.  Each Investor hereby ratifies and
confirms all that such Proxy may lawfully do or cause to be done by virtue
hereof.  Without limiting the generality of the foregoing, such Proxy is
executed and intended to be irrevocable in accordance with the provisions of
Section 212 of the Delaware General Corporation Law.  If for any reason the
Proxy granted herein is not irrevocable, Investor agrees to vote the Excess
Voting Shares in accordance with Section 5.4(a) hereof and to cause any of its
Affiliates to vote any Excess Voting Shares in accordance with Section 5.4(a)
hereof.  To the extent necessary to comply with the terms hereof, each Investor
agrees to cause its Affiliates to execute irrevocable proxies consistent with
the irrevocable Proxies given by each Investor pursuant to this Section 5.4(b).
 
ARTICLE VI                                
 

 
TERM
 
This Agreement is effective as of the date hereof.  Except as otherwise
expressly provided herein with respect to specific provisions of this Agreement,
this Agreement may be terminated only upon the mutual written agreement of the
Parties; provided, however that the rights of an Investor pursuant to Article II
hereof shall terminate at any time that such Investor fails to satisfy the
Minimum Equity Holdings.  If this Agreement is terminated pursuant to this
Article VI, all further obligations of each Party shall terminate without
further liability or obligation of such Party to any other Party, including
liability for damages; provided, however, that no such termination shall relieve
any Party from any liability for any breach of this Agreement arising prior to
the termination date; provided, further, that Section 3.6 and Section 7.4 shall
survive any termination of this Agreement.
 
ARTICLE VII                                
 

 
MISCELLANEOUS
 
7.1 Certain Definitions.  Capitalized terms used herein, but not otherwise
defined, in the body of this Agreement have the meanings set forth in Schedule 1
or, if not defined therein, the meanings set forth in the SPA.
 
7.2 Titles and Subtitles; Interpretation.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.  When a reference is made in this
Agreement to an Article, Section, Schedule or Exhibit, such reference shall be
to an Article, Section, Schedule or Exhibit of this Agreement unless otherwise
indicated.  Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.”  The definitions contained in Schedule 1 to this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such term.  Any
agreement, instrument or statute defined or referred to in this Agreement means
such agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes.  Each of the Parties has participated in the drafting and negotiation
of this Agreement.  If an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if it is drafted by each of the
Parties, and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of authorship of any of the provisions of this
Agreement.
 
7.3 Reasonable Efforts.   When used in this Agreement (including in any
amendment to this Agreement), the terms “best efforts,” “reasonable efforts,”
“commercially reasonable efforts” and “reasonable best efforts” shall mean
efforts that are considered to be commercially reasonable under the
circumstances prevailing at the time, taking into account the economic condition
of the Party making such efforts, the information actually available to such
Party at the time the efforts are made, and the internal resources and employees
available to such Party to make such efforts. In no event shall it require a
Party to undertake measures, which in its reasonable judgment, could materially
jeopardize its ability to perform its other legal or contractual obligations to
others (including to the other Parties) or to comply with applicable Laws or
could adversely impact the licenses, permits or regulatory status of the Company
or its Subsidiaries.  In all cases, such efforts shall be exercised diligently
and in good faith and, in the case of the Company’s efforts to receive approvals
that may be required under applicable Laws, consistent with its own efforts to
obtain its most critical such approvals, on its own behalf, from time to time.
 
7.4 Confidentiality.  All Confidential Information (as defined in the Strategic
Relationship Agreement) disclosed by a Party to another Party pursuant to this
Agreement will be subject to the terms of Section 4.4 of the Strategic
Relationship Agreement.  For clarity, (a) each Investor Director is a
Representative (as defined in the Strategic Relationship Agreement) of the
Investor appointing the Investor Director and (b) nothing herein shall be deemed
to reduce or waive the fiduciary duties of a director of Company.
 
7.5 Representations and Warranties of Toshiba.  Toshiba represents and warrants
to the Company as follows:
 
(a) Toshiba is a corporation duly organized and validly existing under the laws
of Japan.
 
(b) Toshiba has all requisite corporate power, authority and capacity to execute
and deliver this Agreement and to consummate the transactions contemplated to be
performed by it hereby.  The execution, delivery and performance by Toshiba of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
Toshiba.  No approval of Toshiba’s stockholders is required in connection with
Toshiba’s execution, delivery and performance of this Agreement and the
consummation by Toshiba of the transactions contemplated hereby.  This Agreement
has been duly executed and delivered by Toshiba and, assuming the due
authorization, execution and delivery of this Agreement by B&W and the Company,
constitutes the legal, valid and binding agreement of Toshiba enforceable
against it in accordance with its terms, except as may be limited by the
Enforceability Exceptions.
 
7.6 Representations and Warranties of B&W.  B&W represents and warrants to the
Company as follows:
 
(a) B&W is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
 
(b) B&W has all requisite corporate power, authority and capacity to execute and
deliver this Agreement and to consummate the transactions contemplated to be
performed by it hereby.  The execution, delivery and performance by B&W of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of B&W.  This
Agreement has been duly executed and delivered by B&W and, assuming the due
authorization, execution and delivery of this Agreement by Toshiba and the
Company, constitutes the legal, valid and binding agreement of B&W enforceable
against it in accordance with its terms, except as may be limited by the
Enforceability Exceptions.
 
7.7 Representations and Warranties of the Company.  The Company represents and
warrants to the Investors as follows:
 
(a) The Company is a corporation organized, validly existing and in good
standing under the laws of the State of Delaware.
 
(b) The Company has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated to be
performed by it hereby.  The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Company other than the Stockholder Approvals.  This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery of this Agreement by Investor, constitutes the legal,
valid and binding agreement of the Company enforceable against it in accordance
with its terms, except as may be limited by the Enforceability Exceptions.
 
7.8 Further Assurances.  Each Party shall execute and deliver such additional
instruments and other documents and shall take such further actions as may be
necessary or appropriate to effectuate, carry out and comply with all of its
obligations under this Agreement.
 
7.9 No Assignment or Transfer.  No Party shall assign this Agreement or its
rights hereunder to any Person without the written consent of each other Party;
provided, that (a) each Investor may assign its rights hereunder to any
permitted transferee of its Securities in accordance with Section 9.1 of the
SPA, and (b) the registration rights under Article IV shall be exercisable by
any Permitted Holder of Registrable Securities, including after transfers of
Registrable Shares provided such Permitted Holder becomes a party to and bound
by this Agreement.  Except as expressly provided herein, any purported
assignment by any Party shall be null and void.
 
7.10 Injunctive Relief.  The Parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or was otherwise breached.  It
is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court without the necessity of posting
any bond or other security, this being in addition to any other remedy to which
they are entitled at Law or in equity.  Additionally, each Party hereto
irrevocably waives any defenses based on adequacy of any other remedy, whether
at Law or in equity, that might be asserted as a bar to the remedy of specific
performance of any of the terms or provisions hereof or injunctive relief in any
action brought therefor.
 
7.11 Severability.  If any provision of this Agreement, or the application
thereof to any Person, place or circumstance, is held by a court of competent
jurisdiction or in an arbitration under Section 7.16 to be invalid, void or
otherwise unenforceable, such provision shall be enforced to the maximum extent
possible so as to effect the intent of the Parties, or, if incapable of such
enforcement, shall be deemed to be deleted from this Agreement, and the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect and, in such
event, the Parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
Parties’ intentions hereunder.
 
7.12 Waivers.  The waiver by a Party of a breach of or a default under any
provision of this Agreement (a) shall not be effective unless such waiver is in
writing, expressly states that it is a waiver hereunder, and identifies the
breach or default to be waived and (b) shall not be construed as effective
against or with respect to any other Party.  No waiver hereunder shall, in any
event, be construed as a waiver of any subsequent breach of, or default under,
the same or any other provision of this Agreement, nor shall any delay or
omission on the part of a Party in exercising or availing itself of any right or
remedy, or any course of dealing hereunder, operate as a waiver of any right or
remedy.
 
7.13 Amendments.  This Agreement may be amended only by written document,
expressly stating that it is an amendment to this Agreement, identifying the
provisions of this Agreement to be amended, and duly executed on behalf of each
of the Parties.  No delay or omission on the part of a Party in exercising or
availing itself of any right or remedy, or any course of dealing hereunder,
shall operate as an amendment with respect to any provision hereof.
 
7.14 Governing Law.  This Agreement is to be construed in accordance with and
governed by the internal laws of the State of New York without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of New York to the rights
and duties of the Parties.
 
7.15 Conversion or Redemption Dispute.
 
(a) Resolution of Conversion or Redemption Dispute.   If a dispute between the
Company and an Investor shall arise as to the appropriate Factor under Section 7
of the Series B-1 Certificate of Designation, upon a Final Determination (as
defined in the Series B-1 Certificate of Designation) of the Factor, the
obligations of the Parties shall be as follows:
 
(i) If the Factor is determined to be 1.1, the Corporation shall, within 20
Business Days, provide to the Investor, but only in respect of Series B-1
Preferred Stock redeemed or converted prior to such payments, (i) in the case of
a redemption effected pursuant to Section 7(g) of Series B-1 Certificate of
Designation, subject to the provisions of the Delaware General Corporation Law,
cash in an amount equal to the difference between the amount that would have
been paid to such Investor had such final Factor been applied at the time of
redemption and the amount previously paid to such Investor pursuant to Section
7(h) of the Series B-1 Certificate of Designation, (ii) in the case of a
Conversion Election, (x) the difference between the number of shares of Class B
Common Stock or Series C  Preferred Stock (as applicable) as would have been
issued to such Investor pursuant to Sections 7(b) of the Series B-1 Certificate
of Designation had such final Factor been applied at the time of conversion and
the number of shares previously issued to such Investor pursuant to Section 7(h)
of the Series B-1 Certificate of Designation, or (y) subject to the Delaware
General Corporation Law, in the sole discretion of the Company, cash in an
amount equal to the value of the shares as would have been issued under clause
(x) based upon the Base Price as of the date of payment, or (iii) in the case of
a Sale Election (as defined in the Series B-1 Certificate of Designation), an
amount in cash equal to the difference between (A) the product of the final
Factor and the amount calculated pursuant to clause (2)(x)(A) of Section 7.2 of
the Series B-1 Certificate of Designation and (B) the amount calculated pursuant
to clause (2)(x)(A) of Section 7.2 of the Series B-1 Certificate of Designation,
in accordance with Section 7(h) of the Series B-1 Certificate of Designation.
 
(ii) If the Factor is determined to be 0.9, such Investor shall, within 20
Business Days, provide to the Company, but only in respect of Series B-1
Preferred Stock redeemed or converted prior to such payments, (i) in the case of
a redemption effected pursuant to Section 7(g) of the Series B-1 Certificate of
Designation, cash in an amount equal to the difference between the amount
previously paid to such Investor pursuant to Section 7(h) of the Series B-1
Certificate of Designation and the amount that would have been paid to such
Investor thereunder had such Factor been applied,  (ii) in the case of a
Conversion Election, either (x) cash in an amount equal to the value of the
shares issuable under Clause (y) hereof (based upon the Base Price at date of
payment, or (y) a number of shares of Class B Common Stock or Series C Preferred
Stock (as applicable) equal to, the difference between the number of shares of
Class B Common Stock or Series C  Preferred Stock (as applicable) as were issued
to such Investor pursuant to Section 7(h) of the Series B-1 Certificate of
Designation) at such conversion and the number of shares which have been issued
had  such final Factor been applied at such time, or (iii) in the case of a Sale
Election, an amount in cash equal to the difference between the (A) the amount
previously calculated pursuant to clause (2)(x)(A) of Section 7.2 of the Series
B-1 Certificate of Designation and (B) the product of the final Factor and the
amount calculated pursuant to clause (2)(x)(A) of Section 7.2 of the Series B-1
Certificate of Designation; or
 
(iii) if the Factor is determined to be 1.0, then no transfers of cash or shares
need be made.
 
7.16 Dispute Resolution.
 
(a) Executive Meetings.  Prior to submitting any dispute or controversy arising
from or in connection with this Agreement, including the breach, termination or
invalidity thereof (a “Dispute”), to arbitration pursuant to Section 7.16(b),
upon written request of any Party, each Party shall appoint a designated
representative whose task it will be to meet promptly for the purpose of
endeavoring to resolve such Dispute.  The designated representatives shall meet,
in person or by telephone or video conference as deemed appropriate by the
Parties, as often as the Parties reasonably deem necessary to discuss the
Dispute in an effort to resolve the Dispute without the necessity of any further
proceeding.  The Parties agree to negotiate, in good faith, in an attempt to
resolve the Dispute for a period of not greater than thirty (30) days after
notice of the Dispute is received by the Parties.
 
(b) Arbitration; Rules; Location.  Any Dispute that is not resolved pursuant to
Section 7.16(a) shall be referred to and finally determined under the Rules of
Arbitration of the International Chamber of Commerce then in effect (the “ICC
Rules”).  The place of arbitration shall be San Francisco, California, or such
other location as the Parties may agree in writing
 
(c) Arbitrators.  There shall be three (3) arbitrators, nominated in accordance
with the ICC Rules.  Each arbitrator on the arbitral tribunal shall be
disinterested in the Dispute and shall have no connection to any Party thereto
 
(d) Award.  The arbitral award shall be in writing, state the reasons for the
award, and be the sole and exclusive binding remedy with respect to the Dispute
between and among the Parties.  Judgment on the award rendered may be entered in
any court having jurisdiction thereof.  The Parties hereby waive any right to
refer any question of law and right of appeal on the law and/or merits to any
court, except as provided by the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards of 1958.  For purposes of such convention, the award
shall be deemed an award of the United States, the relationship between the
Parties shall be deemed commercial in nature, and any Dispute arbitrated
pursuant to this Section 7.16 shall be deemed commercial.  The arbitrators shall
have the authority to grant any equitable or legal remedies that would be
available in any judicial proceeding intended to resolve a Dispute.
 
(e) Language of Proceedings.  The language of the arbitral proceedings shall be
English.
 
(f) Confidentiality of Proceedings.  The Parties agree that any arbitration
hereunder shall be kept confidential, and that the existence of the Dispute, the
proceeding and all of its elements (including any pleadings, briefs or other
documents submitted or exchanged, any testimony or other oral submissions, and
any awards) shall be deemed Confidential Information (as such term is used in
the Strategic Relationship Agreement), and shall not be disclosed beyond the
tribunal, the International Court of Arbitration, the parties to the Dispute,
their counsel, and any Person necessary to the conduct of the proceeding, except
as and to the extent required to enforce any arbitral award, or as otherwise
contemplated by such confidentiality agreements.
 
(g) Expenses.  Each party hereto to a Dispute shall bear its own legal fees and
costs in connection therewith.
 
(h) Injunctive Relief.  Notwithstanding the foregoing, any Party shall be
entitled to seek preliminary injunctive relief from any court of competent
jurisdiction to preserve the status quo, pending the final decision or award of
the arbitrators.
 
(i) Consent to Jurisdiction.  Each of the Parties hereby irrevocably consents to
jurisdiction of any court State or Federal in the United States of America (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding pursuant to Section 7.16(h) or enforcing any award under Section
7.16(d), and irrevocably waives, to the fullest extent permitted by Law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such action or proceeding may be served on any Party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party by notice as provided in Section 7.20 shall be deemed effective
service of process on such Party.
 
(j) Concurrent Disputes.  To the extent of concurrent Disputes (as such term is
used in each of the Transaction Documents) under multiple Transaction Documents,
the Parties agree to consolidate any and all such Disputes into a single
proceeding pursuant to the procedures set forth in this Section 7.16.
 
7.17 Limitations on Damages.  In no event shall any Party have any liability for
loss of profits, revenue or goodwill, loss or interruption of business, loss of
data, or for any indirect, incidental, special, consequential or punitive
damages, arising out of or relating to this Agreement or the subject matter
hereof, no matter what theory of liability, and even if advised of the
possibility or probability of such damages.
 
7.18 Independent Contractors.  Each Party is an independent contractor and no
Party’s personnel are employees or agents of any other Party for federal, state
or other taxes or any other purposes whatsoever, and are not entitled to
compensation or benefits of the other.  Nothing hereunder shall be deemed to
constitute, create, give effect to or otherwise recognize a joint venture,
partnership or business entity of any kind, nor shall anything in this Agreement
be deemed to constitute any Party the agent or representative of any other
Party.
 
7.19 No Third-Party Beneficiaries.  Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the Parties hereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement, and
no Person that is not a Party to this Agreement (including any partner, member,
stockholder, director, officer, employee or other beneficial owner of either
Party, in its own capacity as such or in bringing a derivative action on behalf
of a Party hereto) shall have any standing as third party beneficiary with
respect to this Agreement or the transactions contemplated hereby.
 
7.20 Notices.  All notices and other communications under this Agreement shall
be in writing and shall be deemed given (a) when delivered by hand or upon
confirmed receipt of a facsimile transmission, (b) when received if sent by an
internationally recognized overnight courier service (receipt requested), or
(c) ten (10) Business Days after mailing, postage prepaid, by registered or
certified mail, return receipt requested, to the below address or such other
addresses as a Party shall specify in a written notice to the other Parties
provided as contemplated herein.
 
To Toshiba:                                                                To
B&W:
 
Toshiba
Corporation                                                                Babcock
& Wilcox Investment Company
1-1 Shibaura
1-chome                                                               800 Main
Street
Minato-ku, Tokyo
105-8001                                                     Lynchburg, VA 24502
JAPAN                                                                       U.S.A.
Attn: General
Manager                                                             Attn: James
D. Canafax, Esq.
Legal Affairs
Division,                                                              Fax:  +1
434 522 6793
Power Systems Company
Fax:  +81 3 5444 9183

With a copy (which shall
not                                                   With a copy (which shall
not
     constitute notice)
to:                                                                   constitute
notice) to:
 
 Morrison &
Foerster                                                                Baker
Botts
     Shin-Marunouchi Building, 29th floor                                 The
Warner
     5-1, Marunouchi
1-chome                                                      1299 Pennsylvania
Avenue, NW
     Chiyoda-ku, Tokyo
100-6529                                                 Washington, DC
20004-2400
     JAPAN                                                                     U.S.A.
     Attn: Ken Siegel,
Esq.                                                             Attn: Michael
Gold, Esq.
     Fax:  +81 3 3214
6512                                                                Fax:  +1 202
585 1024
 
To the Company:
      
     USEC Inc.
     2 Democracy Center
     6903 Rockledge Drive
     Bethesda, MD 20817
     U.S.A.
     Attn: General Counsel
     Fax:  +1 301 564 3206
 
With a copy (which shall not
     constitute notice) to:
 
Latham & Watkins
555 11th Street, N.W.
    Washington, DC 20004
    U.S.A.
    Attn: Scott C. Herlihy, Esq.
    Fax:  +1 202 637 2201
 
7.21 Entire Agreement.  This Agreement and the other Transaction Documents
(including the schedule and exhibits attached hereto and thereto, which are
incorporated herein by reference) constitute the entire agreement among the
Parties with respect to its subject matter.  This Agreement and the other
Transaction Documents supersede all previous, contemporaneous and inconsistent
agreements, negotiations, representations and promises between among the
Parties, written or oral, regarding the subject matter hereof.  There are no
oral or written collateral representations, agreements or understandings except
as provided herein and in the other Transaction Documents.
 
7.22 Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be binding as of the date first written above,
and all of which shall constitute one and the same instrument.  Each such
counterpart shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.  The exchange of copies of this Agreement and of signature pages by
facsimile transmission, portable document format (.pdf) or other electronic
format shall be deemed to be their original signatures for all purposes.
 
[Remainder of page left intentionally blank.]

 
 

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IN WITNESS WHEREOF, the Parties have entered into this Investor Rights Agreement
as of the date first above written.
 

 
TOSHIBA:
Toshiba Corporation
By:         /s/ Yasuharu Igarashi            
Name:  Yasuharu Igarashi
Title:  Corporate Senior Vice President, President and CEO, Power Systems
Company
 

Signature Page to the
Investor Rights Agreement

 
 

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IN WITNESS WHEREOF, the Parties have entered into this Investor Rights Agreement
as of the date first above written.

B&W:
Babcock & Wilcox Investment Company
By:         /s/ Mary Pat Salomone            
Name:  Mary Pat Salomone
Title:  Senior Vice President and Chief Operating Officer
 

Signature Page to the
Investor Rights Agreement

 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have entered into this Investor Rights Agreement
as of the date first above written.

The Company:
USEC Inc.
By:         /s/ John K. Welch            
Name:  John K. Welch
Title:  President and Chief Executive Officer
 

Signature Page to the
Investor Rights Agreement

 
 

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SCHEDULE 1
 
DEFINITIONS

Unless otherwise defined herein, terms used herein that are defined in the SPA
shall have the meanings set forth for such terms in the SPA.
 
“13D Group” means any partnership, limited partnership, syndicate or other
group, as those terms are used within the meaning of Section 13(d)(3) of the
Exchange Act.
 
“ACP” means the design, manufacture, construction, development, startup,
completion, operation, financing, maintenance and improvement of a front-end
nuclear fuel facility utilizing U.S. gas centrifuge enrichment technology and
related infrastructure assets and properties.
 
 
 “Atomic Energy Act” means the Atomic Energy Act of 1954, as amended (42 U.S.C.
2011 et seq.).
 
 
 “Beneficial Owner” means any Person who has beneficial ownership.
 
“Base Price” has the meaning ascribed to it in the Series B-1 Certificate of
Designation or the Series B-2 Certificate of Designation, as applicable.
 
“beneficial ownership” shall mean any ownership that would be determined to be
“beneficial ownership” pursuant to Rule 13d-3 promulgated pursuant to the
Exchange Act.
 
“Board” means the board of directors of the Company or any duly authorized
committee thereof.
 
“Business Day” means any calendar day other than (i) a Saturday or Sunday or
(ii) a calendar day on which banking institutions in either the City of New York
or Tokyo, Japan are authorized by Law, regulation or executive order to remain
closed.
 
“Certificate of Incorporation” means the Company’s Certificate of Incorporation,
as amended, from time to time.
 
“CFIUS” means the Committee on Foreign Investment in the United States of the
United States Treasury Department and any successor Governmental Authority
thereto.
 
“Change of Control” shall mean the occurrence of any of the following:
 
(a) any Person shall Beneficially Own, directly or indirectly, through a merger,
business combination, purchase, or other transaction or series of transactions,
shares of the Corporation’s capital stock entitling such Person at such time to
exercise 50% or more of the total voting power of the issued and outstanding
capital stock having ordinary voting power to elect a majority of the Board of
Directors, other than as a result of an acquisition of such stock by the
Corporation, any of the Corporation’s Subsidiaries or any of the Corporation’s
employee benefit plans (for purposes of this subsection (1), “Person” shall
include any syndicate or group that would be deemed to be a “person” under
Section 13(d)(3) of the Exchange Act);
 
(b) the Corporation (A) merges or consolidates with or into any other Person,
another Person merges with or into the Corporation, or the Corporation conveys,
sells, transfers or leases all or substantially all of the Corporation’s assets
to another Person or (B) engages in any recapitalization, reclassification or
other transaction in which all or substantially all of the Common Stock is
exchanged for or converted into cash, securities or other property, in each case
other than a merger or consolidation:
 
(i) that does not result in a reclassification, conversion, exchange or
cancellation of the Corporation’s outstanding Common Stock;
 
(ii) that is effected solely to change the Corporation’s jurisdiction of
incorporation and results in a reclassification, conversion or exchange of
outstanding shares of the Common Stock solely into shares of any class or series
of common stock of the surviving entity; or
 
(iii) there the issued and outstanding capital stock having voting power to vote
generally to elect a majority of the Board of Directors outstanding immediately
prior to such transaction is converted into or exchanged for such voting stock
of the surviving or transferee Person constituting a majority of the outstanding
shares of such voting stock of such surviving or transferee Person (immediately
after giving effect to such issuance).
 
“Class B Common Stock” means shares of the class B common stock of the Company,
par value $0.10 per share to be authorized by the Charter Amendment.
 
“Classified Information” means (i) information classified as either Restricted
Data or Formerly Restricted Data or (ii) National Security Information.
 
“Closings” means the First Closing, the Second Closing and the Third Closing,
each as defined in the SPA.
 
“Common Stock” means collectively, the Ordinary Common Stock and the Class B
Common Stock.
 
“Competitively Sensitive Information” means any non-public information the
Company possesses relating to (i) the prices, quantities and other terms of sale
on which the Company supplies or offers to supply products or services to
Toshiba’s competitors; and (ii) the prices, quantities and other terms of
service on which a Toshiba competitor or B&W competitor supplies or offers to
supply products or services to a customer, including the Company.
 
“Consent” means any consent, approval, authorization, waiver, permit, grant,
franchise, concession, agreement, license, certificate, exemption, order,
registration, declaration, filing, report or notice of, with or to any Person.
 
“Conversion Election” has the meaning ascribed to it in the Series B-1
Certificate of Designation or the Series B-2 Certificate of Designation, as
applicable.
 
“Deemed Holder Percentage” shall mean, as to any Permitted Holder, the
percentage resulting from the following calculation, (1)(A) the number of shares
of Ordinary Common Stock equal to the quotient of (w) the Liquidation Preference
plus an amount per share equal to the accrued but unpaid Dividends not
previously added to the Liquidation Preference on the outstanding shares of
Series B Preferred Stock held by such Permitted Holder from and including the
immediately preceding Dividend Payment Date to, but excluding, the date of
conversion and (x) the Base Price for the date of such calculation, plus (B) the
number of outstanding of shares of (y) Series C Preferred Stock multiplied by
1000 plus, (z) if then outstanding, Class B Common Stock, in each case held by
such Permitted Holder divided by (2)(A) the total number of shares of Ordinary
Common Stock equal to the quotient of (v) the Liquidation Preference plus an
amount per share equal to the accrued but unpaid Dividends not previously added
to the Liquidation Preference on all outstanding shares of Series B Preferred
Stock from and including the immediately preceding Dividend Payment Date to, but
excluding, the date of conversion and (w) the Base Price for the date of such
calculation, plus (B) the total number of all outstanding shares of (x) Series C
Preferred Stock multiplied by 1000 plus (y) if then outstanding, Class B Common
Stock, plus (z) Ordinary Common Stock.
 
“Director” means a member of the Board.
 
“Dividends” has the meaning ascribed to it in the Series B-1 Certificate of
Designation or the Series B-2 Certificate of Designation, as applicable.
 
“DOE” means the U.S. Department of Energy and any successor Governmental
Authority thereto.
 
“Effective Time” means the time at which the SEC declares any Registration
Statement effective or at which any Registration Statement otherwise becomes
effective.
 
“Election Contest” means solicitations subject to Rule 14a-12(c) promulgated
under the Exchange Act.
 
“Equity Interest” means, as to each Investor at any time, a percentage
represented by a fraction, the numerator of which is the number of shares of
preferred stock then held by the Investor and the denominator of which is the
total number of shares of preferred stock of the Company then outstanding.
 
“Excess Voting Share” has the meaning ascribed to it in Section 5.4(a).
 
“Exchange Act” mean the United States Securities Exchange Act of 1934, as
amended.
 
“Excluded Lender” shall mean a bank or other financial institution providing
indebtedness for borrowed money which is guaranteed by the Loan Guarantee
Agreement (as defined in 10 CFR 609.2) pertaining to the DOE Financial Closing;
provided, however “Excluded Lender” shall not include a Person providing funding
or committed funding (pursuant to definitive binding agreements) for debt or
equity of the Corporation in an amount of at least $100,000,000 that is not
guaranteed by such Loan Guarantee Agreement.
 
“Export Controlled Information” means any unclassified information, the export
of which is controlled by law or regulation under the International Traffic in
Arms Regulations (22 CFR Part 120 et seq.), the Export Administration
Regulations (14 CFR Part 730 et seq.), or the U.S. Department of Energy
regulations (10 CFR Part 810), and including Unclassified Controlled Nuclear
Information, Safeguards Information (Section 147 of the Atomic Energy Act  of
1954 as amended), Sensitive Unclassified Non-Safeguards Information (NRC
Regulatory Information Summary 2005-31), and Official Use Only information (DOE
Order 471.3), except to the extent that the export or deemed export thereof
arising by virtue of a disclosure hereunder has been licensed or approved under,
or is authorized by, Applicable Law.
 
“Factor” has the meaning ascribed to it in the Series B-1 Certificate of
Designation.
 
“Filing Date” means the earlier of (i) April 30, 2011, if the Second Closing has
not occurred prior to that date, (ii) October 30, 2011, if the Third Closing has
not occurred prior to that date and (iii) the date of the Third Closing.
 
 “FINSA” means the Foreign Investment and National Security Act of 2007, 50
U.S.C. App. 2061, amending the Defense Production Act of 1950, 50 U.S.C. App.
2170.
 
“Formerly Restricted Data” means classified information jointly determined by
DOE and the Department of Defense to be related primarily to the military
utilization of nuclear weapons and removed (by transclassification) from the
Restricted Data category pursuant to section 142(d) of the Atomic Energy Act.
 
“Governmental Approval” means any Consent of any Governmental Authority.
 
“Initial Liquidation Preference” means $1,000.00 per share of Series B Preferred
Stock.
 
“Investor Director” means a Director elected by the holders of Preferred Stock
or the Class B Common Stock and the Series C Preferred Stock, as applicable,
pursuant to the Certificate of Incorporation.
 
“Liquidation Preference” has the meaning ascribed to it in the Series B-1
Certificate of Designation or the Series B-2 Certificate of Designation, as
applicable.
 
“Mitigation Agreement” means an agreement or other undertaking entered into with
CFIUS or one or more of its members to address any national security concerns
raised by CFIUS in connection with the transactions contemplated hereby.
 
“National Security Information” means information that has been determined
pursuant to Executive Order 12958, as amended (68 Federal Register 15315 (March
28, 2003)), or prior Executive Orders to require protection against unauthorized
disclosure and is marked to indicate its classification status when in document
form.  National Security Information is referred to as 'defense information' in
the Atomic Energy Act.
 
“Negation Plan” has the meaning set forth in the SPA.
 
 
“NISPOM” means the National Industrial Security Program Operating Manual as
required by Executive Order 12829 and under the authority of Department of
Defense Directive 5220.22, “National Industrial Security Program (NISP)” for the
protection of classified information released or disclosed to industry in
connection with classified contracts under the NISP.
 
 
“NRC” means the U.S. Nuclear Regulatory Commission and any successor
Governmental Authority thereto.
 
 “Nuclear and National Security Approvals” means approvals, licenses, permits,
or other authorizations required: (i) from the NRC under of the Atomic Energy
Act, 10 CFR Part 70 and 10 CFR Part 76, including any applicable Negation Plans;
(ii) from the NRC and DOE pursuant to the NISPOM, including any applicable
Negation Plans; and (iii) from DOE regarding access to Restricted Data pursuant
to 10 CFR Part 725.
 
“Orderly Sale Arrangement” has the meaning set forth in the SPA.
 
“Ordinary Common Stock” means the shares of the common stock of the Company, par
value $0.10 per share.
 
“Participant” has the meaning set forth in Instruction 3 to Item 4 of Schedule
14A promulgated under the Exchange Act.
 
“Permitted Holder” means (i) Toshiba and its controlled Affiliates and (ii) B&W
and its controlled Affiliates.
 
“Permitted Offer” means (a) an offer made to all of the holders of Common Stock
in cash for any or all of the outstanding Common Stock that has been approved by
the Directors of the Company other than the Investor Directors or (b) a private
offer to acquire all of the Company’s Common Stock made to the Board in response
to a third party’s offer to acquire a majority of the Company’s equity
securities or an indication by the Board to the Investors that they would be
interested in receiving such an offer.  The transaction proposed in a Permitted
Offer must be approved or accepted by the holders of a majority of the
outstanding shares of Ordinary Common Stock.
 
“PIK Shares” means the shares of Preferred Stock paid as in-kind dividends on
Preferred Stock.
 
“Preferred Stock” has the meaning set forth in the recitals hereto.
 
“Prospectus” means the prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by any
Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.
 
“Proxy” has the meaning ascribed to it in Section 5.4(b).
 
“Registrable Securities” means, at any time, all of the then issued and
outstanding, or issuable, as the case may be, (a) shares of Common Stock issued
or issuable to the Investors upon conversion of (x) the shares of Preferred
Stock purchased by the Investors pursuant to the SPA or (y) any shares of Series
B Common Stock, (b) all other shares of Common Stock issued or issuable to the
Investors upon exercise of Warrants, (c) shares of any class of capital stock or
other securities into which or for which any such shares of Common Stock shall
have been converted or exchanged pursuant to any recapitalization,
reorganization, merger or consolidation of the Company or sale of all or
substantially all of the assets of the Company and (d) shares of capital stock
issued with respect to the foregoing pursuant to a stock split or stock
dividend.  As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) they have been distributed to the
public pursuant to an offering registered under the Securities Act, (ii) they
have been sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force) or pursuant to the Orderly Sale Arrangement.
 
“Registration Statements” means the Initial Shelf and any subsequent Shelf
Registration Statement registering the Registrable Securities.
 
 
“Restricted Data” means a kind of classified information that consists of all
data concerning the following, but not including data declassified or removed
from the Restricted Data category pursuant to section 142 of the Atomic Energy
Act: (i) design, manufacture, or utilization of atomic weapons; (ii) production
of special nuclear material; or (iii) use of special nuclear material in the
production of energy.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Securities” means any shares of Common Stock or preferred stock of the Company
and any securities that are convertible into, or any option or right to
subscribe for or acquire, any shares of Common Stock or preferred stock of the
Company.
 
“Securities Act” means the Securities Act of 1933 as amended.
 
“Series B-1 Certificate of Designation” means the Company’s Certificate of
Designation of Series B-1 12.75% Convertible Preferred Stock.
 
“Series B-2 Certificate of Designation” shall mean the Company’s Certificate of
Designation of series of preferred stock of Series B-2 11.5% Convertible
Preferred Stock.
 
“Series C Certificate of Designation” shall mean the Certificate of Designation
of the Series C Participating Convertible Preferred Stock.
 
“Shelf Registration Statement” means a “shelf” registration statement filed
under the Securities Act providing for the registration of, and the sale on a
continuous or delayed basis by the Investors of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the SEC, filed by the Company pursuant to the provisions
of Article IV of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement, and any additional “shelf”
registration statements filed under the Securities Act to permit the
registration and sale of Registrable Securities pursuant to Article IV.
 
“Solicitation” has the meaning set forth in Regulation 14A promulgated under the
Exchange Act.
 
“Subsidiary” of any Person shall mean any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than fifty percent (50%) of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of
such partnership, joint venture or limited liability company or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.  Notwithstanding the foregoing, American Centrifuge Manufacturing,
LLC shall not be considered a Subsidiary of B&W or the Company.
 
“Third Party Financing” means the funding or committed funding (pursuant to
definitive binding agreements) for debt or equity of the Company in an amount of
at least $100,000,000 from a third party that is not an Affiliate of the
Company, a Japanese export credit agency, a U.S. Governmental Authority or an
Excluded Lender where (1) such funds, together with such other additional funds
available to the Company at such time, is necessary and sufficient to consummate
the DOE Financial Closing, and (2) the third-party requires, as a condition to
the funding, that the Preferred Stock be converted in accordance with the terms
hereof.
 
“Transaction Documents” means this Agreement, the Certificates of Designation,
the Charter Amendment, the Investor Rights Agreement, and the Strategic
Relationship Agreement.
 
 
“Unclassified Controlled Nuclear Information” means certain unclassified
Government information concerning nuclear facilities, materials, weapons, and
components whose dissemination is controlled under section 148 of the Atomic
Energy Act and 10 CFR 1017.
 

 
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