Exhibit 10.5

 

ZION NUCLEAR POWER STATION, UNITS 1 AND 2

 

PLEDGE AGREEMENT

made by

 

ENERGYSOLUTIONS, LLC

 

in favor of

 

EXELON GENERATION COMPANY, LLC

 

SEPTEMBER 1, 2010

 

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TABLE OF CONTENTS

 

1.

DEFINITIONS

2

 

 

 

1.1.

DEFINITIONS

2

1.2.

CERTAIN INTERPRETIVE MATTERS

5

 

 

 

2.

PLEDGE

6

 

 

 

2.1.

GRANT OF SECURITY INTEREST

6

 

 

 

3.

REPRESENTATIONS AND WARRANTIES

6

 

 

 

3.1.

TITLE; NO OTHER ENCUMBRANCES

6

3.2.

PERFECTED FIRST PRIORITY ENCUMBRANCES

6

3.3.

CHIEF EXECUTIVE OFFICE

7

3.4.

INVESTMENT PROPERTY

7

 

 

 

4.

COVENANTS

7

 

 

 

4.1.

MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION

7

4.2.

CHANGES IN LOCATIONS, NAME, ETC.

7

 

 

 

5.

REMEDIAL PROVISIONS

8

 

 

 

5.1.

RIGHTS UPON EVENT OF DEFAULT

8

5.2.

[PROCEEDS TO BE TURNED OVER TO PLEDGEE

9

5.3.

APPLICATION OF PROCEEDS

9

5.4.

CODE AND OTHER REMEDIES

9

5.5.

RELEASE OF PROCEEDS

10

 

 

 

6.

ADMINISTRATION OF COLLATERAL

10

 

 

 

6.1.

PLEDGEE’S APPOINTMENT AS ATTORNEY-IN-FACT, ETC.

10

6.2.

DUTY OF PLEDGEE

11

6.3.

FINANCING STATEMENTS

11

 

 

 

7.

MISCELLANEOUS PROVISIONS

12

 

 

 

7.1.

AMENDMENT AND MODIFICATION

12

7.2.

WAIVER OF COMPLIANCE; CONSENTS

12

7.3.

NOTICES

12

7.4.

ASSIGNMENT

13

7.5.

GOVERNING LAW

13

7.6.

COUNTERPARTS

14

7.7.

ENTIRE AGREEMENT

14

7.8.

CHANGE IN LAW

14

7.9.

SEVERABILITY

14

 

SCHEDULES

 

Schedule 3.1-                       FILINGS AND OTHER ACTIONS REQUIRED TO
PERFECT SECURITY INTERESTS

 

Schedule 3.2-                       LOCATION OF JURISDICTION OF ORGANIZATION AND
CHIEF EXECUTIVE OFFICE

 

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PLEDGE AGREEMENT

 

This PLEDGE AGREEMENT, dated as of September 1, 2010 (the “Agreement”) made by
ENERGYSOLUTIONS, LLC (“Pledgor”), a Utah limited liability company, in favor of
EXELON GENERATION COMPANY, LLC (“Pledgee”) a Pennsylvania limited liability
company.  Pledgee and Pledgor are referred to individually as a “Party” and
collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Parties, along with ZionSolutions, LLC (“ZionSolutions”) and
EnergySolutions, Inc. (“Guarantor”), have entered into that Asset Sale
Agreement, dated as of December 11, 2007 (as amended, the “Asset Sale
Agreement”), pursuant to which Pledgee agreed, subject to the terms and
conditions of the Asset Sale Agreement, to, among other things, sell, assign,
convey, transfer and deliver all of its right, title and interest to the Zion
Assets to Zion Solutions;

 

WHEREAS, Pledgee and Zion Solutions have entered into that Lease Agreement,
dated as of August    , 2010 (the “Lease Agreement”) pursuant to which Pledgee
has agreed to Lease the Premises (as defined in the Lease Agreement) to Zion
Solutions;

 

WHEREAS, Pledgee and Zion Solutions have entered into that Put Option Agreement,
dated as of August    , 2010 (the “Put Option Agreement”) pursuant to which
Pledgee has agreed to grant Zion Solutions the Put Option (as defined in the Put
Option Agreement);

 

WHEREAS, Pledgor has entered into that Performance Guarantee dated as of
December 11, 2007 (the “Performance Guarantee”) pursuant to which Pledgor has
agreed to guarantee certain obligations of Zion Solutions under the Asset Sale
Agreement, the Lease Agreement, the Assignment and Assumption Agreement, and the
Put Option Agreement;

 

WHEREAS, the Parties, along with Zion Solutions and Guarantor have entered into
that Credit Support Agreement, dated as of August    , 2010 (the “Credit Support
Agreement”) pursuant to which Pledgor or Guarantor will provide Pledgee with an
irrevocable letter of credit, the proceeds of which shall be payable only to the
Buyer Backup NDT, to support certain of the obligations of Zion Solutions and
Pledgor under the Asset Sale Agreement, the Lease Agreement and the Performance
Guarantee;

 

WHEREAS, Zion Solutions is a wholly-owned subsidiary of Pledgor; and

 

WHEREAS, Pledgor has agreed to pledge 100% of its equity interests in Zion
Solutions as collateral for its obligations under the Performance Guarantee;

 

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties agree as follows:

 

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1.                                      DEFINITIONS

 

1.1.                            Definitions.

 

As used in this Agreement, the following terms have the meanings specified in
this Section 1.1.  All terms not otherwise defined herein shall have the meaning
ascribed to them in the Asset Sale Agreement.

 

(1)           “Affiliate” has the meaning set forth in the Asset Sale Agreement.

 

(2)           “Agreement” means this Pledge Agreement together with the
Schedules hereto, as the same may be from time to time amended.

 

(3)           “Asset Sale Agreement” has the meaning set forth in the recitals.

 

(4)           “Bankruptcy Event” has the meaning set forth in the Credit Support
Agreement.

 

(5)           “Buyer Backup NDT” has the meaning set forth in the Asset Sale
Agreement.

 

(6)           “Clive, Utah Facility” has the meaning set forth in the Asset Sale
Agreement.

 

(7)           “Collateral” has the meaning set forth in Section 2.1.

 

(8)           “Collateral Account” is defined in Section 5.2.

 

(9)           “Credit Support Agreement” has the meaning set forth in the
recitals.

 

(10)         “Encumbrances” has the meaning set forth in the Asset Sale
Agreement.

 

(11)         “Event of Default” means:

 

(i)            any Material Letter of Credit Default shall occur and be
continuing, following the expiration of any applicable cure period described in
with section 3.2 of the Credit Support Agreement;

 

(ii)           any action by Pledgor reasonably likely to result in the sale,
liquidation, or transfer of the Clive, Utah Facility to a Person which is not an
Affiliate of Pledgor;

 

(iii)          any action by Pledgor reasonably likely to result in the sale,
liquidation or transfer of its assets, together with distribution to its
shareholders of proceeds received from such transaction, in an amount equal to
or in excess of twenty percent (20%) of its consolidated book

 

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value or fair value at the time of the transaction without the prior written
consent of Pledgee, such consent not to be unreasonably withheld;

 

(iv)          either (A) at any time during any calendar year, Pledgor’s Net
Worth declines from Pledgor’s Net Worth as of the close of the immediately
preceding calendar year by an amount equal to the greater of $30,000,000 or 20%
of Pledgor’s Net Worth as of the close of the immediately preceding calendar
year, without giving effect to any increase or decrease in Intangible Assets
subsequent to the close of the immediately preceding calendar year, or (B) at
any time Pledgor’s Net Worth is less than 80% of Pledgor’s Net Worth as of the
close of the calendar quarter ended immediately prior to the date of this
Agreement,  without giving effect to any increase or decrease in Intangible
Assets subsequent to the end of such calendar quarter;

 

(v)           an event of Force Majeure or Schedule Extension Condition shall
continue without being cured for a period of more than seven hundred thirty
(730) consecutive days, unless otherwise agreed by the Parties, or any events of
Force Majeure or Schedule Extension Conditions shall cumulatively exceed one
thousand ninety five (1095) days (whether or not consecutive) in any period of
one thousand eight hundred twenty-six (1,826) consecutive days, except to the
extent any such event of Force Majeure or Schedule Extension Condition is
attributable to events or conditions described in clause (a) or (g) of section
1.42 of the Lease Agreement or is otherwise attributable to acts or omissions of
Pledgee or its Affiliates other than the enforcement of its rights under any
agreement with Pledgor or Zion Solutions;

 

(vi)          the failure of Zion Solutions to defer receivables as required
upon failure to meet a Site Restoration Milestone in accordance with section 6.3
of the Lease Agreement;

 

(vii)         Pledgor or Zion Solutions shall fail to perform any other material
term, covenant or agreement contained herein or the Credit Support Agreement,
the Performance Guarantee, or the Lease Agreement on its part to be performed or
observed if such failure shall remain unremedied for ten (10) days after which
written notice of such failure is given by Pledgee to the Pledgor or Zion
Solutions; or

 

(viii)  Pledgor shall fail to make capital contributions or subordinated loans
to Zion Solutions when, as and to the extent required under section 6.21.10 of
the Asset Sale Agreement, Pledgor or Zion Solutions shall fail to defer
receivables when, as and to the extent required under section 6.21.6 of the
Asset Sale Agreement or repeatedly fail to comply in any material respect with
section 6.21 of the Asset Sale Agreement, including but not limited to
submission of a materially

 

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inaccurate Annual Status Report, Disbursement Certification or Deficiency
Certification (each as defined in the Asset Sale Agreement).

 

(12)         “Force Majeure” has the meaning set forth in the Lease Agreement.

 

(13)         “Intangible Assets” means all assets which would be classified as
intangible assets under generally accepted accounting principles, including
without limitation, goodwill, licenses, patents, trademarks, trade names,
copyrights, capitalized software and organizational costs, licenses and
franchises.

 

(14)         “Law” has the meaning set forth in the Asset Sale Agreement.

 

(15)         “Lease Agreement” has the meaning set forth in the recitals.

 

(16)         “Material Letter of Credit Default” has the meaning set forth in
the Credit Support Agreement.

 

(17)         “Net Worth” means the excess of the Pledgor’s consolidated total
assets (including Intangible Assets) over its consolidated total liabilities,
determined in accordance with generally accepted accounting principles applied
on a consistent basis from period to period.

 

(18)         “Obligations” means all obligations of the Pledgor under the
Performance Guarantee.

 

(19)         “Party” (and the corresponding term “Parties”) has the meaning set
forth in the preamble.

 

(20)         “Performance Guarantee” has the meaning set forth in the recitals.

 

(21)         “Person” has the meaning set forth in the Asset Sale Agreement.

 

(22)         “Pledged LLC Interests” has the meaning set forth in Section 2.1.1.

 

(23)         “Pledgee” has the meaning set forth in the preamble.

 

(24)         “Pledgor” has the meaning set forth in the preamble.

 

(25)         “Proceeds” means “proceeds” as such term is defined in section
9-102(64) of the Uniform Commercial Code.

 

(26)         “Put Option Agreement” has the meaning set forth in the recitals.

 

(27)         “Schedule Extension Conditions” has the meaning set forth in the
Lease.

 

(28)         “Uniform Commercial Code” means any of a number of uniform acts
promulgated to harmonize the law of commercial transactions in the United
States.

 

(29)         “Zion Solutions” has the meaning set forth in the recitals.

 

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1.2.                            Certain Interpretive Matters.

 

1.2.1.                  Unless otherwise required by the context in which any
term appears:

 

(1)           Capitalized terms used in this Agreement shall have the meanings
specified in this Article.

 

(2)           The singular shall include the plural, the plural shall include
the singular, and the masculine shall include the feminine and neuter.

 

(3)           References to “Articles”, “Sections” or “Schedules” shall be to
articles, sections or schedules of or to this Agreement, and references to
“paragraphs” or “clauses” shall be to separate paragraphs or clauses of the
section or subsection in which the reference occurs.

 

(4)           The words “herein”, “hereof” and “hereunder” shall refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement; and the words “include,” “includes” or “including” shall mean
“including, but not limited to.”

 

(5)           The term “day” shall mean a calendar day, commencing at 12:01 a.m.
(Central Time).  The term “week” shall mean any seven consecutive day period
commencing on a Sunday, and the term “month” shall mean a calendar month;
provided, however, that when a period measured in months commences on a date
other than the first day of a month, the period shall run from the date on which
it starts to the corresponding date in the next month and, as appropriate, to
succeeding months thereafter.  Whenever an event is to be performed or a payment
is to be made by a particular date and the date in question falls on a day which
is not a Business Day, the event shall be performed, or the payment shall be
made, on the next succeeding Business Day; provided, however, that all
calculations shall be made regardless of whether any given day is a Business Day
and whether or not any given period ends on a Business Day.

 

(6)           All references to a particular entity shall include such entity’s
permitted successors and permitted assigns unless otherwise specifically
provided herein.

 

(7)           All references herein to any Law or to any contract or other
agreement shall be to such Law, contract or other agreement as amended,
supplemented or modified from time to time unless otherwise specifically
provided herein.

 

1.2.2.                  The titles of the articles, sections and schedules
herein have been inserted as a matter of convenience of reference only, and
shall not control or affect the meaning or construction of any of the terms or
provisions hereof.

 

1.2.3.                  This Agreement was negotiated and prepared by all
Parties with advice of counsel to the extent deemed necessary by each Party; the
Parties have agreed to the wording of this Agreement; and none of the provisions
hereof shall be construed against one Party on the ground that such Party is the
author of this Agreement or any part hereof.

 

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1.2.4.                  The Schedules hereto are incorporated in and are
intended to be a part of this Agreement; provided, however, that in the event of
a conflict between the terms of any Schedule and the terms of this Agreement,
the terms of this Agreement shall take precedence.

 

2.                                      PLEDGE.

 

2.1.                            Grant of Security Interest.  As collateral
security for the prompt and complete payment and performance when due (whether
at stated maturity, by acceleration or otherwise) by the Pledgor of all of the
Obligations, the Pledgor hereby pledges and grants to the Pledgee a pledge of
and a first priority continuing security interest in, all of the Pledgor’s
right, title and interest in, to and under the following property, whether now
owned by the Pledgor or hereafter acquired and whether now existing or hereafter
coming into existence (all being collectively referred to herein as the
“Collateral”):

 

2.1.1.                  all limited liability company interests in Zion
Solutions (the “Pledged LLC Interests”), the certificates representing the
Pledged LLC Interests (if any), any interest of the Pledgor in the books and
records of Zion Solutions, and all dividends, instruments, chattel paper,
securities, warrants, options and other rights, property or proceeds and
products from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged LLC Interest now or
hereafter owned by the Pledgor, provided that any dividends made in accordance
with the provisions of Section 5.1.1 shall be excluded from the Collateral; and

 

2.1.2.                  all Proceeds of and to any of the property of the
Pledgor described in Section 2.1.1.

 

3.                                      REPRESENTATIONS AND WARRANTIES.

 

3.1.                            Title; No Other Encumbrances.  Except for the
security interest granted to the Pledgee pursuant to this Agreement, the Pledgor
owns each item of the Collateral free and clear of any and all Encumbrances or
claims of others.  No financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except such as have been filed in favor of the Pledgee pursuant to this
Agreement.

 

3.2.                            Perfected First Priority Encumbrances.  The
security interests granted pursuant to this Agreement upon completion of the
filings and other actions specified on Schedule 3.2 (which, in the case of all
filings and other documents referred to on such Schedule 3.2, have been
delivered to the Pledgee in completed and duly executed form) will:
(i) constitute valid and enforceable perfected security interests in all of the
Collateral in favor of the Pledgee as collateral security for the Obligations to
the extent that a security interest may be perfected by filing and/or the other
actions specified on Schedule 3.2 and (ii) are prior to all other Encumbrances
on the

 

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Collateral in existence on the date hereof except for Encumbrances which have
priority over the Encumbrances on the Collateral by operation of law.

 

3.3.                            Chief Executive Office. On the date hereof, the
Pledgor’s jurisdiction of organization and the location of the Pledgor’s chief
executive office or sole place of business are specified on Schedule 3.3.

 

3.4.                            Investment Property.

 

3.4.1.                  The Pledged LLC Interests pledged by the Pledgor
hereunder constitute all the issued and outstanding limited liability company
interests of Zion Solutions.

 

3.4.2.                  The Pledgor is the record and beneficial owner of, and
has good and marketable title to, the Collateral pledged by it hereunder, free
of any and all Encumbrances or options in favor of, or claims of, any other
Person, except the security interest created by this Agreement.

 

4.                                      COVENANTS.

 

4.1.                            Maintenance of Perfected Security Interest;
Further Documentation.

 

4.1.1.                  The Pledgor shall (i) deliver to Pledgee all
certificates, if any, evidencing the Pledged LLC Interests, together with an
undated instrument of assignment for such certificate duly executed in blank by
the Pledgor and appointing Pledgee as Pledgor’s agent and attorney in fact with
power to transfer the same, and (ii) take any and all actions that may be
necessary or, in the reasonable discretion of the Pledgee, prudent to maintain
the security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 3.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever.

 

4.1.2.                  At any time and from time to time, upon the written
request of the Pledgee, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Pledgee may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including:
(i) filing any financing or continuation statements under the Uniform Commercial
Code (or other similar Laws) in effect in any jurisdiction with respect to the
security interests created hereby and (ii) in the case of the Pledged LLC
Interests and any other relevant Collateral, taking any actions necessary to
enable the Pledgee to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

 

4.2.                            Changes in Locations, Name, etc. The Pledgor
will not, except upon thirty (30) days’ prior written notice to the Pledgee and
delivery to the Pledgee of all additional executed financing statements and
other documents reasonably requested by the Pledgee to maintain the validity,
perfection and priority of the security interests provided for herein:

 

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4.2.1.                  change its jurisdiction of organization; or

 

4.2.2.                  change its name, identity or corporate structure to such
an extent that any financing statement filed by the Pledgee in connection with
this Agreement would become misleading.

 

4.3  Ownership of Zion Solutions.  Pledgor shall own free and clear of all
Encumbrances, 100% of the issued and outstanding equity interests of Zion
Solutions, subject only to the pledge of such interest in favor of Pledgee
pursuant to this Agreement.

 

4.4  Notice of Events of Default.  Pledgor shall give written notice to Pledgee
promptly, and in any event within five (5) Business Days, of the occurrence of
any event or condition that constitutes an Event of Default or, but for the
giving of notice, the passage of time, or both, would constitute an Event of
Default, together with a statement of Pledgor setting forth details of such
event or condition and the action that Pledgor proposes to take with respect
thereto.

 

4.5  Change in Capital Structure.  Pledgor shall not cause or permit Zion
Solutions to dissolve, liquidate, retire or redeem any of its member interests,
reduce its capital (other than distributions of earnings, except as hereinafter
provided), or merge or consolidate with any other entity.

 

4.6  Issuance of Additional Securities.  Pledgor shall not cause or permit Zion
Solutions to issue any additional ownership or member interests or other
securities, options, warrants, or any right to receive same, or any right to
receive earnings, unless Pledgor shall accept and receive the same as agent of
Pledgee, hold the same in trust for Pledgee, and promptly deliver to Pledgee any
certificates or physical securities evidencing the same, duly endorsed to by
Pledgor to Pledgee, if required, together with an undated instrument of
assignment for such certificate or security duly executed in blank by Pledgor
and appointing Pledgee as Pledgor’s agent and attorney in fact with power to
transfer the same.

 

5.                                      REMEDIAL PROVISIONS.

 

5.1.                            Rights upon Event of Default.

 

5.1.1.                  Unless an Event of Default shall have occurred and be
continuing and the Pledgee shall have given written notice to the Pledgor of the
Pledgee’s intent to exercise its corresponding rights pursuant to Section 5.1.2,
the Pledgor shall be permitted to receive all cash dividends paid in respect of
the Pledged LLC Interests and, except as otherwise provided in this Agreement,
to exercise all voting and other rights of Pledgor as a member of Zion Solutions
and holder of the Pledged LLC Interests at any meeting of members of Zion
Solutions, in connection with any action or members by written consent, or
otherwise.

 

5.1.2.                  If an Event of Default shall occur and be continuing and
the Pledgee shall give notice of its intent to exercise such rights to the
Pledgor (provided that no such notice shall be required if at such time a
Bankruptcy Event has occurred and is continuing with respect to the Pledgor):
(i) the Pledgee shall have the right to

 

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receive any and all cash dividends, distributions, payments or other Proceeds
paid in respect of the Pledged LLC Interests and make application thereof to the
Obligations in such order as the Pledgee may determine; (ii) at the election of
the Pledgee, any or all of the Pledged LLC Interests shall be registered in the
name of the Pledgee or its nominee; and (iii) the Pledgee or its nominee may
exercise all voting, member and other rights pertaining to the Pledged LLC
Interests at any meeting of the members of Zion Solutions, action by written
consent, or otherwise; provided, however, that in no event shall Pledgee take
possession of or exercise control over the Pledged LLC Interests or any NRC
licensed facility until first having received issuance of a license by NRC
authorizing such possession or NRC’s prior written consent to the transfer of
control of the existing NRC licenses.

 

5.2.         Proceeds to be Turned Over To Pledgee.  If an Event of Default
shall occur and be continuing, all Proceeds received by the Pledgor consisting
of cash, checks and other near-cash items shall be held by the Pledgor in trust
for the Pledgee, segregated from other funds of the Pledgor, and shall,
forthwith upon receipt by the Pledgor, be turned over to the Pledgee in the
exact form received by the Pledgor (duly indorsed by the Pledgor to the Pledgee,
if required).  All Proceeds received by the Pledgee hereunder shall be held by
the Pledgee in a collateral account (the “Collateral Account”) maintained under
its sole dominion and control.

 

5.3.         Application of Proceeds.  If an Event of Default shall have
occurred and be continuing, at any time thereafter at the Pledgee’s election,
the Pledgee may apply all or any part of Proceeds held in the Collateral Account
in payment of expenses of Decommissioning of the Zion Station and other amounts
due to Pledgee in respect of the Obligations, and any part of such funds which
the Pledgee elects not so to apply and deems not required as collateral security
for any Obligations shall be paid over from time to time by the Pledgee to the
Pledgor or to whomsoever may be lawfully entitled to receive the same.  Any
balance of such Proceeds remaining after the Obligations shall have been paid in
full shall be paid over to the Pledgor or to whomsoever may be lawfully entitled
to receive the same.  It is acknowledged and agreed that sums on deposit in the
Collateral Account shall be held for the benefit of the Pledgee.

 

5.4.         Code and Other Remedies.  If an Event of Default shall occur and be
continuing, the Pledgee may exercise, in addition to all other rights and
remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code or any other
applicable Law; provided, however, that in no event shall Pledgee take
possession of or exercise control over the Pledged LLC Interests or any NRC
licensed facility until first having received issuance of a license by NRC
authorizing such possession or NRC’s prior written consent to the transfer of
control of the existing NRC licenses.

 

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5.5.         Release of Proceeds.  Any amounts received by the Pledgee during
the continuance of an Event of Default and not applied against the Obligations
or expenses of Decommissioning of Zion Station shall be paid over to the
Pledgor.

 

6.             ADMINISTRATION OF COLLATERAL.

 

6.1.         Pledgee’s Appointment as Attorney-in-Fact, etc.

 

6.1.1.      The Pledgor hereby irrevocably constitutes and appoints the Pledgee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of the Pledgor and in the name of the Pledgor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, the Pledgor
hereby gives the Pledgee the power and right, on behalf of the Pledgor, without
notice to or assent by the Pledgor, to do any or all of the following:

 

6.1.1.1    in the name of the Pledgor or its own name, or otherwise, file any
claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Pledgee for the purpose of collecting any
and all such moneys due with respect to any other Collateral whenever payable;

 

6.1.1.2    pay or discharge taxes and Encumbrances levied or placed on or
threatened against the Collateral, effect any repairs or any insurance called
for by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof;

 

6.1.1.3    (i) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Pledgee or as the Pledgee shall direct; (ii) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (iii) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of
any Collateral; (iv) defend any suit, action or proceeding brought against the
Pledgor with respect to any Collateral; (v) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Pledgee may deem appropriate; and (vi) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Pledgee were
the absolute owner thereof for all purposes, and do, at the Pledgee’s option and
the Pledgor’s expense, at any time, or from time to time, all acts and things
which the

 

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Pledgee deems necessary to protect, preserve or realize upon the Collateral and
the Pledgee’s security interests therein and to effect the intent of this
Agreement, all as fully and effectively as the Pledgor might do; and

 

6.1.1.4    following an Event of Default, take any action under the limited
liability company agreement under which the Pledged Interests are issued that
may be taken by the holder of the Pledged Interests or the holder of a proxy or
power of attorney with respect to the Pledged Interests.

 

Anything in this Section 6.1.1 to the contrary notwithstanding, the Pledgee
agrees that it will not exercise any rights under the power of attorney provided
for in this Section 6.1.1 (a) unless an Event of Default shall have occurred and
be continuing; or (b) other than as necessary to seek authorization from NRC for
Pledgee to take possession of or exercise control over the Pledged LLC Interests
or its NRC licensed facility, until first having received issuance of a license
by NRC authorizing such possession or NRC’s prior written consent to the
transfer of control of the existing NRC licenses.

 

6.1.2.      If the Pledgor fails to perform or comply with any of its agreements
contained herein, the Pledgee, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement.

 

6.1.3.      The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof.  All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.

 

6.2.         Duty of Pledgee. The Pledgee’s sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under section 9-207 of the Uniform Commercial Code or otherwise,
shall be to deal with it with the same degree of care as the Pledgee deals with
similar property for its own account.  Neither the Pledgee, nor any of its
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers
conferred on the Pledgee hereunder are solely to protect the Pledgee’s interests
in the Collateral and shall not impose any duty upon the Pledgee to exercise any
such powers.  The Pledgee shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to the Pledgor
for any act or failure to act hereunder, except for (i) its own gross negligence
or willful misconduct or (ii) breach of its obligations under this Agreement.

 

6.3.         Financing Statements.  Pursuant to any applicable Law, the Pledgor
authorizes the Pledgee to file or record financing statements and other filing
or recording documents

 

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or instruments with respect to the Collateral without the signature of the
Pledgor in such form and in such offices as the Pledgee determines appropriate
to perfect the security interests of the Pledgee under this Agreement.  A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.

 

7.             MISCELLANEOUS PROVISIONS.

 

7.1.         Amendment and Modification.

 

Subject to applicable Law, this Agreement may be amended, modified or
supplemented only by written agreement of Pledgee and Pledgor.

 

7.2.         Waiver of Compliance; Consents.

 

Except as otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent failure to comply therewith.

 

7.3.         Notices.

 

All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, or mailed by
overnight courier or registered or certified mail (return receipt requested),
postage prepaid, to the recipient Party at its address (or at such other address
or facsimile number for a Party as shall be specified by like notice; provided,
however, that notices of a change of address shall be effective only upon
receipt thereof):

 

7.3.1.      If to Pledgee, to:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Carol R. Peterson

 

with copies to:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Bradley Fewell

 

and

 

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Exelon Corporation

10 South Dearborn Street

Chicago, Illinois 60603

Attention: Bruce G. Wilson

 

7.3.2.      if to Pledgor, to:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: John Christian

 

with a copy to:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: Val Christensen

 

7.4.                            Assignment.

 

This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any Party hereto, including by
operation of law, without the prior written consent of each other Party, such
consent not to be unreasonably withheld, nor is this Agreement intended (except
as specifically provided herein) to confer upon any other Person except the
Parties hereto any rights, interests, obligations or remedies hereunder.  Any
assignment in contravention of the foregoing sentence shall be null and void and
without legal effect on the rights and obligations of the Parties hereunder.

 

7.5.                            Governing Law.

 

This Agreement shall be governed by and construed in accordance with the law of
the State of Illinois (without giving effect to conflict of law principles) as
to all matters, including matters of validity, construction, effect, performance
and remedies.  THE PARTIES HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND
PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN
DIVISION) OR A STATE COURT SITUATED THEREIN.  THE FOREGOING COURTS SHALL HAVE
EXCLUSIVE JURISDICTION FOR SUCH PURPOSE AND THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING.  SERVICE OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH
COURTS.  EACH

 

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OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT
TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

7.6.         Counterparts.

 

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

 

7.7.         Entire Agreement.

 

This Agreement, including the Schedules, documents, certificates and instruments
referred to herein or therein, and any other documents that specifically
reference this Section 7.7, embody the entire agreement and understanding of the
Parties hereto in respect of the transactions contemplated by this Agreement and
shall supersede all previous oral and written and all contemporaneous oral
negotiations, commitments and understandings including, without limitation, all
letters, memoranda or other documents or communications.

 

7.8.         Change in Law.

 

If and to the extent that any Laws that govern any aspect of this Agreement
shall change, so as to make any aspect of this transaction unlawful, then the
Parties agree to make such modifications to this Agreement as may be reasonably
necessary for this Agreement to accommodate any such legal or regulatory
changes, without materially changing the overall benefits or consideration
expected hereunder by any Party.

 

7.9.         Severability.

 

Any term or provision of this Agreement that is held invalid or unenforceable in
any situation shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation.

 

7.10        Right to Specific Performance.

 

Pledgor agrees that a breach of any of its covenants contained in this Agreement
will cause irreparable harm to Pledgee and Pledgee has no adequate remedy at law
in respect of any such breach and, as a consequence, that each and every
covenant contained in this Agreement shall be specifically enforceable against
Pledgor, and Pledgor hereby waives and agrees not to assert any defense that
Pledgee has an adequate remedy at law in an action for specific performance of
any such covenants in the event of a breach thereof.

 

[Signatures appear on the following page]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

/s/ Carol R. Peterson

 

 

 

 

Name:

Carol R. Peterson

 

 

 

 

Title:

Vice President

 

 

 

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

By:

/s/ Val J. Christensen

 

 

 

 

Name:

Val J. Christensen

 

 

 

 

Title:

President

 

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SCHEDULE 3.1 to

Pledge Agreement

 

FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS

 

Uniform Commercial Code Filings

 

Pledgor

 

UCC Filing Offices

 

 

 

EnergySolutions, LLC

 

Utah

 

Actions with Regard to Pledged Shares

 

1)            Delivery of membership interest certificates (if any), accompanied
by undated powers duly indorsed in blank, of Zion Solutions, LLC

 

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SCHEDULE 3.2 to

Pledge Agreement

 

LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

 

Pledgor

 

Jurisdiction

 

Location

EnergySolutions, LLC

 

Utah

 

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

 

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