EXHIBIT 10.5
SHAREHOLDERS AGREEMENT
dated as of
October 4, 2006
by and among
TOSHIBA CORPORATION
TSB NUCLEAR ENERGY INVESTMENT UK LIMITED,
NUCLEAR ENERGY HOLDINGS, L.L.C.,
ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD.
and
TOSHIBA NUCLEAR ENERGY HOLDINGS (UK) LIMITED

 

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TABLE OF CONTENTS

                      PAGE ARTICLE 1
 
            Definitions
 
           
SECTION 1.01
  Definitions     2  
 
            ARTICLE 2
 
            Formation and Purpose of Joint Venture
 
           
SECTION 2.01
  Formation of the Company     6  
SECTION 2.02
  Purpose and Scope of the Company     6  
 
            ARTICLE 3
 
            Corporate Governance; Management
 
           
SECTION 3.01
  The Board     7  
SECTION 3.02
  The Owner Board     9  
SECTION 3.03
  Principal Officers     11  
SECTION 3.04
  Organizational Documents     12  
SECTION 3.05
  Shareholder Actions     12  
SECTION 3.06
  Dividend Policy     12  
 
            ARTICLE 4
 
            Certain Operational Matters
 
           
SECTION 4.01
  Acquisition of Westinghouse Group     13  
SECTION 4.02
  Repayment of Loans     14  
SECTION 4.03
  Annual Budget and Business Plan     14  
SECTION 4.04
  Shareholder Support of the Westinghouse Group Business     15  
SECTION 4.05
  Personnel Matters     15  
SECTION 4.06
  Coordination Office     15  
 
            ARTICLE 5
 
            Certain Agreements among the Company and the Shareholders
 
           
SECTION 5.01
  Confidentiality     16  
SECTION 5.02
  Access     17  
SECTION 5.03
  Financial Statements     18  
SECTION 5.04
  Public Announcements     19  
SECTION 5.05
  No Inconsistent Actions     19  

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                      PAGE
SECTION 5.06
  No Apparent Authority     19  
SECTION 5.07
  Undertaking by Shaw Sub     19  
 
            ARTICLE 6
 
            Representations and Warranties
 
           
SECTION 6.01
  Organization     19  
SECTION 6.02
  Authorization, Validity and Enforceability of This Agreement     20  
 
            ARTICLE 7
 
            Transfer of Shares
 
           
SECTION 7.01
  General Restrictions     20  
SECTION 7.02
  Permissible Transfers     20  
SECTION 7.03
  Legend on Share Certificates     21  
SECTION 7.04
  Rights of First Offer     21  
SECTION 7.05
  Tag-Along Rights     22  
SECTION 7.06
  Call Rights     23  
 
            ARTICLE 8
 
            Arbitration
 
           
SECTION 8.01
  Arbitration     25  
 
            ARTICLE 9
 
            Liquidation
 
           
SECTION 9.01
  Liquidation Events     26  
SECTION 9.02
  Liquidation Procedures     26  
 
            ARTICLE 10
 
            Miscellaneous
SECTION 10.01
  Amendments; Waivers; Termination     26  
SECTION 10.02
  Expenses     27  
SECTION 10.03
  Notices     27  
SECTION 10.04
  Governing Law; Severability     28  
SECTION 10.05
  Counterparts     29  
SECTION 10.06
  Entire Agreement     29  
SECTION 10.07
  Effectiveness     29  
SECTION 10.08
  Binding Effect; Benefit     29  
SECTION 10.09
  Assignability     29  
SECTION 10.10
  Headings     30  

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                      PAGE
SECTION 10.11
  Survival     30  
SECTION 10.12
  Further Assurances     30  
SECTION 10.13
  No Third-Party Beneficiaries     30  
SECTION 10.14
  Specific Performance     30  
SECTION 10.15
  Preemptive Rights     30  
SECTION 10.16
  No fetter on Company’s powers     31  

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SHAREHOLDERS AGREEMENT
     AGREEMENT, dated as of October 4, 2006, among Toshiba Corporation, a
corporation organized under the laws of Japan (“Toshiba”), TSB Nuclear Energy
Investment UK Limited, a company registered in England with registered number
5929658 and a wholly owned Subsidiary (as defined below) of Toshiba (“Toshiba
UK”), Nuclear Energy Holdings, L.L.C., a Delaware limited liability company and
a wholly owned Subsidiary (“Shaw Sub”) of The Shaw Group Inc., a Louisiana
corporation (“Shaw”), Ishikawajima-Harima Heavy Industries Co., Ltd., a
corporation organized under the laws of Japan (“IHI”), and Toshiba Nuclear
Energy Holdings (UK) Limited, a company registered in England with registration
number 5929672 (the “Company”).
     WHEREAS, Toshiba, on one part, and British Nuclear Fuels PLC and BNFL
(Investments US) Ltd., on the other part (the “Sellers”), have entered into that
certain Purchase and Sale Agreement, dated as of February 6, 2006 (the “PSA”),
pursuant to which Toshiba has agreed to purchase all of the issued and
outstanding shares of BNFL USA Group Inc. and Westinghouse Electric UK Limited
(together with their respective Subsidiaries, the “Westinghouse Group”); and
     WHEREAS, Toshiba plans to cause the Company to acquire all of the issued
and outstanding shares of Westinghouse Electric UK Limited and to cause Toshiba
Nuclear Energy Holdings (US) Inc. (“US Acquisition Co.”) to acquire all of the
issued and outstanding shares of BNFL USA Group Inc., respectively; and
     WHEREAS, Toshiba has entered into an Agreement Regarding Participation in
an Investment Program with each of Shaw and IHI (each, the “Participation
Agreement”) pursuant to which (i) Toshiba has agreed to enter into investment
agreements with Shaw and Shaw Sub, and with IHI, respectively (each, the
“Investment Agreement”) governing the terms of subscriptions for shares of the
Company and the US Acquisition Co., respectively, (ii) Toshiba, Shaw and IHI
have agreed to enter, and/or cause certain of their Subsidiaries to enter, into
this Agreement and a similar shareholders agreement governing the US Acquisition
Co. (the “US Shareholders Agreement”), (iii) Toshiba and Shaw have agreed to
enter into a Commercial Relationship Agreement (the “Commercial Relationship
Agreement”) affording a preferential status to Shaw when the Westinghouse Group
chooses a supplier, and (iv) Toshiba and each of Shaw and IHI have agreed to
enter into Put Option Agreements (each, a “Put Option Agreement”), subject to
agreement of final documentation of all the terms and conditions hereof; and
     WHEREAS, following the Closing (as defined herein) under the Investment
Agreement: (i) Toshiba UK will own 364 Ordinary “A” shares of £1 each in the
capital the Company, (the “Class A Shares”) (representing approximately 53% of
the Class A Shares), and 714 Ordinary “B” shares of £1 each in the capital of
the Company (the “Class B Shares” and, together with the Class A Shares, the “
Shares”) (representing 100% of the Class B Shares) which will represent 77% of
the aggregate number of the Shares then outstanding; (ii) Shaw Sub will own 280
Class A Shares (representing approximately 41% of the Class A Shares and 20% of
the aggregate number of the Shares then outstanding); and (iii) IHI will own 42
Class A Shares (representing

 

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approximately 6% of the Class A Shares and 3% of the aggregate number of the
Shares then outstanding); and
     WHEREAS, the parties hereto desire to set forth in this Agreement certain
agreements with respect to the capitalization, management, control, shareholding
and certain other matters relating to the Company;
     NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
          SECTION 1.01 Definitions
     The following terms, as used herein, have the following meanings:
     “Act” means the UK Companies Act 1985 (as amended).
     “Affiliate” means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by, or under common Control with, such
Person. It is acknowledged that after the date of this Agreement, Persons who
are not presently Affiliates of a Party may become Affiliates of such Party, and
Persons who are presently Affiliates of a Party may cease to be Affiliates of
such Party.
     “Agreement” means this Shareholders Agreement.
     “Annual Budget” has the meaning set forth in Section 4.03(a).
     “Authorized Representative” has the meaning set forth in Section 5.01(a).
     “Big Four Accounting Firm” means any of (i) Deloitte & Touche LLP,
(ii) Ernst & Young LLP, (iii) KPMG or (iv) PricewaterhouseCoopers LLP or, in
each case, any successor thereto.
     “Board” means the board of directors of the Company.
     “Business Day” means, with respect to any place, any day except a Saturday,
Sunday or other day on which commercial banks in that place are authorized by
law to close.
     “Business Plan” has the meaning set forth in Section 4.03(b).
     “Chairman” means the Chairman of the Board, who shall have the authority
and responsibilities set forth in this Agreement.
     “CIC Event” has the meaning set forth in Section 7.06(b).
     “CIC Shareholder” has the meaning set forth in Section 7.06(b).

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     “Class A Shares” has the meaning set forth in the recitals.
     “Class B Shares” has the meaning set forth in the recitals.
     “Closing” means the closing of the transactions contemplated by the
Investment Agreements.
     “Closing Date” means the date on which the Closing occurs.
     “Commercial Relationship Agreement” has the meaning set forth in the
recitals.
     “Company” has the meaning set forth in the recitals.
     “Company Value” has the meaning set forth in Section 7.06(c).
     “Competitor” means any Person who, by itself or through or together with
any of its Subsidiaries, is substantially engaged in the provision of nuclear
power plant technology and/or nuclear fuel supply.
     “Confidential Information” has the meaning set forth in Section 5.01(a).
     “Control” of any Person (including the terms “Controlling,” “Controlled by”
and “under common Control with”) means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of a majority of the voting
securities, by contract or otherwise; provided, however, that when securities
representing at least one-third of the voting rights at a shareholders meeting
of any Person are acquired by a Competitor, Control of such Person shall be
deemed changed for the purpose of this Agreement, unless such Person effectively
proves such acquirer doesn’t have the power described herein.
     “Coordination Manager” has the meaning set forth in Section 4.06(b).
     “Coordination Office” has the meaning set forth in Section 4.06(a).
     “Director” means a member of the Board.
     “Equity Security” means, with respect to any Person, any stock or other
ownership interest having ordinary voting power to elect directors of, or other
persons performing similar functions with respect to, such Person, or any
security convertible into, exercisable for or exchangeable for such stock or
other ownership interest.
     “Exercise Period End Date” has the meaning set forth in Section 7.01(b).
     “Extended First Offer Acceptance Period” has the meaning set forth in
Section 7.04(b).
     “First Offer” has the meaning set forth in Section 7.04(a).
     “First Offer Acceptance Period” has the meaning set forth in
Section 7.04(a).

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     “First Offer Shares” has the meaning set forth in Section 7.04(a).
     “GAAP” has the meaning set forth in Section 5.03(a).
     “IB Firm” has the meaning set forth in Section 7.06(c).
     “IHI” has the meaning set forth in the recitals.
     “Insolvency Event” has the meaning set forth in Section 7.06(a).
     “Insolvent Shareholder” has the meaning set forth in Section 7.06(a).
     “Investment Agreement” has the meaning set forth in the recitals.
     “Liquidation Event” has the meaning set forth in Section 9.01.
     “Material Adverse Effect” means, with respect to a Party, a material
adverse effect on the condition (financial or otherwise), business, assets,
results of operations or prospects (considered on a consolidated basis) of such
Party.
     “Organizational Documents” means, collectively, the Memorandum and Articles
of Association of the Company in effect on the Closing Date, as each may be
amended, modified or supplemented from time to time.
     “Owner Board” has the meaning set forth in Section 3.02(a).
     “Owner Board Chairman” has the meaning set forth in Section 3.02(b).
     “Owner Board Members” has the meaning set forth in Section 3.02(b).
     “Ownership Percentage” means, with respect to any Shareholder at any time,
the percentage derived by multiplying 100 times a fraction, the numerator of
which is the total number of Shares directly or indirectly beneficially owned by
such Shareholder at such time and the denominator of which is the aggregate
number of Shares outstanding at such time.
     “PSA ” has the meaning set forth in the recitals.
     “PSA Closing” means the closing of the transactions contemplated by the
PSA.
     “Participation Agreement” has the meaning set forth in the recitals.
     “Party” means each of Toshiba, Toshiba UK, Shaw Sub, IHI and the Company,
and any other Person who becomes a party to this Agreement as amended,
supplemented or otherwise modified from time to time.
     “Permitted Transfer” means (i) a pledge of Shares by Shaw Sub in connection
with financing arrangements for the purchase of its Shares (provided, however,
that the key terms of such arrangements shall be disclosed to Toshiba in advance
and reasonably acceptable to

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Toshiba), (ii) the Transfer of Shares by Shaw Sub pursuant to the provisions of
its Put Agreement, (iii) the Transfer of Shares by IHI pursuant to the
provisions of its Put Agreement, and (iv) any Transfer of Shares pursuant to
Sections 7.02, 7.04, 7.05 or 7.06.
     “Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
     “President” has the meaning set forth in Section 3.03(a).
     “Principal Officer” means each of the President, the Treasurer and the
Secretary.
     “Put Option Agreement” has the meaning set forth in the recitals.
     “Put Period” means the period commencing on the Closing Date and ending on
the date that is thirty days after the receipt by the Shareholders of the
consolidated financial statements (prepared in accordance with GAAP) of the
Company and US Acquisition Co. for the period ending September 30, 2012.
     “Secretary” has the meaning set forth in Section 3.03(a).
     “Sellers” has the meaning set forth in the recitals.
     “Shareholder” means each Person (other than the Company, Toshiba and Shaw)
who shall be a Party, whether pursuant to the execution and delivery hereof as
of the date hereof, or pursuant to Article 7 or Section 10.09, so long as such
Person shall directly or indirectly beneficially own any Shares.
     “Shares” has the meaning set forth in the recitals.
     “Shaw” has the meaning set forth in the recitals.
     “Shaw Sub” has the meaning set forth in the recitals.
     “Subsidiary” means, with respect to any Person, (i) any corporation of
which the outstanding stock having at least a majority of votes entitled to be
cast in the election of directors under ordinary circumstances shall at the time
be owned, directly or indirectly, by such Person or by such Person and a
Subsidiary or Subsidiaries of such Person or by a Subsidiary or Subsidiaries of
such Person or (ii) any other Person (other than a corporation) of which at
least a majority of voting interests under ordinary circumstances shall at the
time be owned or Controlled, directly or indirectly, by such Person or by such
Person and a Subsidiary or Subsidiaries of such Person or by a Subsidiary or
Subsidiaries of such Person.
     “Tag-Along Exercise Notice” has the meaning set forth in Section 7.05(a).
     “Tag-Along Notice” has the meaning set forth in Section 7.05(a).
     “Tag-Along Notice Period” has the meaning set forth in Section 7.05(a).

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     “Tag-Along Offer” has the meaning set forth in Section 7.05(a).
     “Tagging Shareholders” has the meaning set forth in Section 7.05(a).
     “Toshiba” has the meaning set forth in the recitals.
     “Toshiba Budget Calendar” has the meaning set forth in Section 4.03(a).
     “Toshiba UK” has the meaning set forth in the recitals.
     “Transfer” means to, directly or indirectly, sell, transfer, assign,
pledge, encumber, hypothecate or otherwise dispose of Shares, either voluntarily
or involuntarily and with or without consideration.
     “Transferring Shareholder” has the meaning set forth in Section 7.04(a).
     “Treasurer” has the meaning set forth in Section 3.03(a).
     “US Acquisition Co.” has the meaning set forth in the recitals.
     “US Shareholders Agreement” has the meaning set forth in the recitals.
     “U.S. Dollars,” “US$” and “$” means the lawful currency of the United
States of America.
     “WEC” has the meaning set forth in Section 4.06(a).
     “Westinghouse Group” has the meaning set forth in the recitals.
ARTICLE 2
FORMATION AND PURPOSE OF JOINT VENTURE
          SECTION 2.01 Formation of the Company
     The Company has been formed by Toshiba through Toshiba UK in connection
with its agreement to acquire the Westinghouse Group pursuant to the PSA.
          SECTION 2.02 Purpose and Scope of the Company
     (a) The purpose and scope of the Company is to, together with the US
Acquisition Co., own the entities comprising, and oversee the activities of, the
Westinghouse Group.
     (b) The Shareholders understand and acknowledge that the entities
comprising the Westinghouse Group will be consolidated Subsidiaries of Toshiba
following the PSA Closing.

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ARTICLE 3
CORPORATE GOVERNANCE; MANAGEMENT
          SECTION 3.01 The Board
     (a) In accordance with the provisions of the Organizational Documents, the
business and affairs of the Company shall be managed by and corporate powers
shall be exercised by or under the direction of the Board solely to the extent
required by applicable law or as set forth herein. To the extent not so
required, the business and affairs of the Company shall be managed by and
corporate powers shall, insofar as possible by applicable law, be exercised by
or under the direction of the President.
     (b) The initial Board shall consist of three members, two of whom shall be
nominated by Toshiba UK, and one of whom shall be nominated by Shaw Sub. In the
event that a Person acquires Shares and such Person’s Ownership Percentage
exceeds 10%, then such Person shall be entitled to nominate one Director and the
total number of the Directors shall increase by such number (subject to the
Organizational Documents); provided, however, that Toshiba UK shall have the
right to nominate such number of the Directors as represents at least a majority
of the members of the Board so long as Toshiba UK’s Ownership Percentage is 51%
or more. If at any time the Ownership Percentage of Shaw Sub is less than 10%,
Shaw Sub shall lose the right to nominate one Director and promptly cause the
Director nominated by it to resign from the Board and waive any claims that he
would otherwise have against the Company as a result of such resignation and the
number of Directors will be immediately reduced by such number. Each Shareholder
agrees that it will vote its Shares or execute consents, as the case may be, and
take all other necessary action (including, if necessary, causing the Company to
call a meeting of Shareholders) in order to ensure that the composition of the
Board is at all times as set forth in this Section 3.01 and that the nominees
provided herein are elected to the Board. The members of the Board shall be the
same as those of the US Acquisition Co.’s Board.
     (c) Each Shareholder agrees that it will not vote, or grant any consent
with respect to, any of its Shares in favor of the removal from the Board of any
Director elected at the request of the other Shareholders unless the Shareholder
entitled to nominate such Director shall have consented to such removal in
writing. Each Shareholder agrees to cause to be called, if necessary, a meeting
of the Shareholders of the Company and to vote all of the Shares directly or
indirectly beneficially owned by such Shareholder for, or to take all actions by
written consent in lieu of any such meeting necessary to cause, the removal of
any Director from the Board if the Shareholder which nominated such Director
requests in a writing, signed by such Shareholder, such Director’s removal for
any reason.
     (d) If, as a result of death, disability, retirement, resignation, removal
or otherwise, there shall exist or occur any vacancy on the Board with respect
to any Director, the Shareholder who nominated such Director in accordance with
Section 3.01(b) shall within 30 days of such event notify the Board in writing
of a replacement Director, and upon any such nomination (whether before or after
such 30-day period) all Shareholders shall promptly take all actions necessary
to ensure the election to the Board of such replacement Director to fill the
unexpired term of the Director whom such new Director is replacing, including,
if necessary, calling a

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meeting of Shareholders and voting their Shares thereat, or executing any
written consent in lieu thereof, in favor of the election of such Director.
     (e) Meetings of the Board and general Shareholder meetings shall be
presided over by the President. One of the two Directors nominated by Toshiba UK
shall be the President. One-third of the members of the Board then in office,
provided such number includes at least one Director nominated by Toshiba UK,
shall constitute a quorum for the transaction of business at any meeting of the
Board, and all actions of the Board shall require the affirmative approval of at
least a majority of the votes of the Board to be cast at the relevant Board
meeting. Each Director present at a meeting of the Board or any committee
thereof shall have a number of votes at such a meeting equal to (a) the
Ownership Percentage of all classes of stock of the Company, considered as a
single class, owned by the Shareholder which nominated such Director for
election to the Board, divided by (b) the number of Directors so nominated by
such Shareholder who are present at such meeting. (By way of illustration, based
on the Ownership Percentages as of the Closing Date, the Director nominated by
Shaw would have 20 votes while the Directors nominated by Toshiba UK who
actually attend the meeting would collectively have 77 votes in the aggregate.
As for Toshiba UK nominated Directors, if two of them attend, then each would
have 38.5 votes; if only one attends, he would have 77 votes.) In the event
there is a vacancy on the Board and an individual has been nominated to fill
such vacancy, the first order of business at any meeting held during such time
shall be to fill such vacancy.
     (f) Any one or more members of the Board may participate in a meeting of
the Board by means of a conference telephone, video conference or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at a meeting and directors so participating shall count
towards a quorum for such meeting.
     (g) Unless otherwise prohibited by law, any action required or permitted to
be taken by the Board may be taken without a meeting if all members of the Board
consent in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents thereto by the members of the Board shall be
filed with the minutes of proceedings of the Board.
     (h) The languages for all meetings of the Board shall be English.
Translation and interpretation shall be provided as necessary or appropriate.
All minutes and other documents to be presented to the Board shall be prepared
(or, in the case of exhibits, summarized) in English.
     (i) Notice of any meetings of the Board stating the place, date and hour of
the meeting shall be given not less than five (5) business days before the date
of the meeting unless otherwise agreed by all directors.
     (j) Any Shareholder who does not have a right under this Agreement to
nominate a member of the Board shall have the right to designate an observer who
may attend and monitor meetings of the Board, but who shall have no voting
rights.
     (k) Without prejudice to Section 3.02, the Board may establish any
sub-committee and delegate decision-making authority thereto as it shall in its
absolute discretion determine.

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          SECTION 3.02 The Owner Board
     (a) There shall be constituted an advisory committee for the Board and the
President (the “Owner Board”) which shall, pursuant to authorization by the
Board and to the extent permitted by the Act, have the following functions and
responsibilities:
     (i) to advise as to the administration and supervision of matters regarding
the Westinghouse Group;
     (ii) to advise as to the resolution of any matters relating to the Company
and brought to it which may have a Material Adverse Effect on any Shareholder;
     (iii) to provide the Board and/or the President with general and universal
advice and supervision for the business supervision of the Westinghouse Group;
and
     (iv) to do such other functions and responsibilities as may be assigned by
the Board.
          The Board and the President shall duly consider any opinion or
recommendation made by the Owner Board.
     (b) All costs and expenses associated with the administration of the Owner
Board shall be borne by the Company.
     (c) The Owner Board shall initially consist of three voting members (the
“Owner Board Members”) and the Chairman of the Owner Board (the “Owner Board
Chairman”), provided, however, that the number of the voting members shall
increase on a one-by-one basis if the number of Shareholders increases. Each
Shareholder (for the avoidance of doubt, including Toshiba UK) shall be entitled
to appoint one Owner Board Member (who need not be a Director) by notifying the
Board in writing, and the President (as nominated by Toshiba UK in accordance
with Section 3.03(a)) shall serve as the Owner Board Chairman.
     (d) If, as a result of death, disability, retirement, resignation, removal
or otherwise, there shall exist or occur any vacancy on the Owner Board, the
Shareholder who appointed such Owner Board Member shall within 30 days of such
event notify the Board in writing of a replacement Owner Board Member.
     (e) Meetings of the Owner Board shall be presided over by the Owner Board
Chairman or, in the absence of the Owner Board Chairman, the Owner Board Member
nominated by Toshiba UK, in which case the Owner Board Member appointed by
Toshiba UK shall still be entitled to exercise his votes notwithstanding that he
presides over such meeting. Members of the Owner Board representing a majority
of votes to be cast, plus at least attendance of two Owner Board Members, one of
whom shall be an Owner Board Member nominated by a Party other than Toshiba UK,
shall constitute a quorum for the transaction of business at any meeting of the
Owner Board. Notice of any meetings of the Owner Board stating the place, date

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and hour of the meeting shall be given not less than five (5) business days
before the date of the meeting unless all of the Owner Board Members agree
otherwise.
     (f) Each Owner Board Member present at a meeting or acting by written
consent (other than the Owner Board Chairman) (shall have a number of votes
corresponding to the Ownership Percentage of the Shareholder appointing such
Owner Board Member; provided, however, that the Owner Board Chairman shall have
no voting rights. Except as provided in the immediately following sentence, all
actions of the Owner Board shall require the affirmative approval of at least a
majority of the votes entitled to be cast at meetings of the Owner Board.
Notwithstanding the foregoing, none of the following specified actions may be
taken by the Company, the Board, the Owner Board or any member of the
Westinghouse Group without the vote of Owner Board Members holding voting rights
at least 1% in excess of the Ownership Percentage of Toshiba UK and any
Affiliate thereof at the time the vote is taken (i.e., initially, seventy-eight
percent (78%)):
     (i) the issuance of any Equity Securities of the Company to any Person,
other than pro rata issuances of Equity Securities to the Shareholders;
     (ii) the issuance by the Company of any Class A Shares, Class B Shares or
any other Equity Securities which have dividend preferences;
     (iii) the issuance of any Equity Securities in any member of the
Westinghouse Group to any Person other than to members of the Westinghouse
Group, which will result in the change of Control of such member;
     (iv) the acquisition or disposition by any member of the Westinghouse Group
of assets or property with a value in excess of ten million dollars
($10 million), other than in the ordinary course of business or the one already
described in Schedule A attached hereto or the relevant Annual Budget;
     (v) the incurrence by any member of the Westinghouse Group of indebtedness
for borrowed money in the amount of ten million dollars ($10 million) or more,
other than in the ordinary course of business or the one guaranteed by Toshiba
or the one already described in the relevant Annual Budget;
     (vi) any dissolution, liquidation or petition for voluntary bankruptcy of
the Company or any member of the Westinghouse Group;
     (vii) any merger, consolidation, restructuring, acquisition, disposition or
similar transaction involving the Company or any member of the Westinghouse
Group whose total value exceeds twenty percent (20%) of the then fair market
value of the Westinghouse Group’s total consolidated assets;
     (viii) the settlement of any Dispute or litigation or assumption of any
obligation or liability with a value in excess of ten million dollars
($10 million) or more, other than in the ordinary course of business; and

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     (ix) any material changes to the tax or accounting policies of the Company
or the Westinghouse Group.
     (g) The Shareholders shall, and shall cause their respective Owner Board
Members to, use their reasonable efforts to provide that ordinary meetings of
the Owner Board are held at least once during each fiscal quarter. In addition,
extraordinary meetings of the Owner Board may be held as necessary. In-person
meetings of the Owner Board shall be held in the United States or any such other
places as may be determined by the Owner Board.
     (h) Any one or more members of the Owner Board may participate in a meeting
of the Owner Board by means of a conference telephone, video conference or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at a meeting and persons so participating shall
count towards a quorum.
     (i) The Owner Board may have an office. The office will serve as the point
of contact for requests related to the Owner Board and notification made by the
Owner Board Chairman and will handle any and all related administrative matters.
The office also will serve as the point of contact for communications or
coordination with the Shareholders and for related procedures.
     (j) Toshiba UK or one or more of its Affiliates may second up to two
employees to serve in the administration of the Owner Board’s functions. Each
seconded employee will be subject to the supervision of, and required to comply
with the rules of conduct of, the Company and/or the entity from which he or she
was seconded.
     (k) The languages for all meetings of the Owner Board shall be English.
Translation and interpretation shall be provided as necessary or appropriate.
All minutes and other documents to be presented to the Owner Board shall be
prepared (or, in the case of exhibits, summarized) in English.
          SECTION 3.03 Principal Officers
     (a) There shall be a president of the Company as provided for in
Section 3.01(e) (the “President”) who, as provided in Section 3.01(a), shall, to
the extent permitted by the Act, manage the business and affairs of the Company
and shall otherwise have the powers and perform such duties of management
usually vesting in the Chief Executive Officer and/or President of a company. In
addition to the President, there shall be a treasurer of the Company (the
“Treasurer”), who may or may not be a Director, and a secretary of the Company
(the “Secretary” and, together with the President and the Treasurer, the
“Principal Officers”) who shall each have the powers and perform such duties
usually vesting in a treasurer or secretary, respectively, of a company.
     (b) Toshiba UK shall be entitled to nominate the Principal Officers after
consulting with other Shareholders, and each Shareholder agrees that it will
(i) cause the Directors nominated by it to vote in favor of the appointment of
such nominees, (ii) cause the Directors nominated by it not to vote in favor of
the removal of any Principal Officer unless Toshiba UK

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shall have consented to such removal in writing and (iii) cause the Directors
nominated by it to vote in favor of the removal of any Principal Officer if
Toshiba UK requests it to do so for any reason in a signed, written request. If,
as a result of death, disability, retirement, resignation, removal or otherwise,
the office of any Principal Officer shall be vacant, Toshiba UK shall within
30 days of such event notify the Board in writing of its nomination for a
replacement, and upon such receipt of such notice (whether before or after such
30-day period) each Shareholder shall cause the Directors nominated by it to
promptly take all actions necessary to ensure the appointment of such
replacement.
     (c) The Company may also have, upon appointment by the Board at the request
of the President, such other officers, including, but not limited to, vice
presidents, assistant secretaries, assistant treasurers and other officers, as
may be appointed in accordance with the Organizational Documents and the Act.
          SECTION 3.04 Organizational Documents
     Each Shareholder shall vote its Shares or execute any consents necessary,
and shall take all other actions necessary, to ensure that the Organizational
Documents facilitate, and do not at any time conflict with any provision of,
this Agreement or any applicable law, and to ensure that the provisions hereof
are implemented notwithstanding any inconsistent provision in the Organizational
Documents.
          SECTION 3.05 Shareholder Actions
     (a) Each Shareholder agrees that in the event of any duly called annual or
extraordinary meeting of the holders of Shares called for the purpose of voting
on the election of directors or any other matter required to be taken by the
holders of Shares, such Shareholder shall appear in person or by proxy at such
meeting for the purpose of obtaining a quorum, and shall vote or cause to be
voted all Shares directly or indirectly beneficially owned by such Shareholder,
either in person or by proxy, at any such meeting in the manner provided
pursuant to this Agreement.
     (b) Any one or more holders of Shares may participate in a meeting of the
holders of Shares by means of a conference telephone, video conference or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
     (c) The languages for all meetings of the holders of Shares shall be
English. Translation and interpretation shall be provided by the Company at its
cost as necessary or appropriate. All minutes and other documents to be
presented to the holders of Shares shall be prepared (or, in the case of
exhibits, summarized) in English.
          SECTION 3.06 Dividend Policy.
     (a) Dividends shall be paid if, when and in the amount declared by the
Board, subject to the Organizational Documents and applicable law.

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     (b) The Shareholders intend that the Company will pay dividends in cash
(unless otherwise agreed among the Shareholders) in an amount such that each
Shareholder shall receive at least $22,222 for each Share per fiscal year (or a
corresponding fraction thereof for the first and last partial fiscal year) as
dividends, and a total of $133,332 per each Share over the first twenty four
fiscal quarters from the PSA Closing, subject to applicable law.
     (c) To implement the objective of Section 3.06(b), it is the policy of the
Company to distribute as dividends with respect to each fiscal year of the
Company a certain percentage (up to, but in no event, including dividend target
shortfall of the US Acquisition Co. set forth herein below, exceeding, 100%) of
the consolidated net income of the Company and its consolidated Subsidiaries, as
determined in accordance with GAAP as reflected in the consolidated financial
statements of Toshiba for such period, which is available for distribution to
Shareholders in accordance with applicable law (the “Distribution Ratio”) to
satisfy the expectation set forth in Section 3.06(b) above. In any fiscal year,
the Distribution Ratio may be reduced to no lower than 65% (subject to
applicable law) if no A Accrual (as defined in the Memorandum and Articles of
Association of the Company) and B Accrual (as defined in the Memorandum and
Articles of Association of the Company) will exist after distributions for such
fiscal year are made. The relative preferences of the Class A Shares and the
Class B Shares shall be as set forth in the Organizational Documents. It is
further the policy of the Company (i) to pay additional dividends to the holders
of Class A Shares (other than Toshiba UK or any successor owner of Shares owned
by Toshiba UK) to the extent US Acquisition Co. does not pay dividends in
accordance with its dividend policy with respect to Class A Shares of the US
Acquisition Co. and (ii) to reduce the amount to be paid in dividends to the
holders of Class A Shares (except Toshiba UK or any successor owner of Shares
owned by Toshiba UK) to the extent US Acquisition Co. pays dividends in excess
of its policy with respect to Class A Shares of the US Acquisition Co., all as
described in the Organizational Documents.
     (d) The parties expect that such dividends will be paid on a quarterly
basis.
     (e) All per share amounts in this Section 3.06 shall be adjusted as
appropriate for any stock splits, reorganization or recapitalization with
respect to the Shares of the Company.
     (f) The Shareholders will initiate discussion in a timely manner after the
Closing and collectively determine a policy for the distribution of net income
in excess of that required to satisfy the provisions hereof and of the
Organizational Documents.
     (g) Should any former Shareholder be entitled to receive an unpaid A
Accrual (as defined in the Memorandum and Articles of Association of the
Company) under Article IV. B. 3.(c) of the Memorandum and Articles of the
Company, any other Shareholder which receives distributions from the Company in
violation of that provision shall return such distributions to the former
Shareholder.
ARTICLE 4
CERTAIN OPERATIONAL MATTERS
          SECTION 4.01 Acquisition of Westinghouse Group

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     (a) The Shareholders agree that the Company will acquire all the issued and
outstanding shares of Westinghouse Electric UK Limited. in accordance with the
PSA, and will cooperate, and cause the respective Directors nominated by them to
cooperate, in all respects reasonably necessary to consummate such transactions.
     (b) Toshiba will act as an agent for the Company with respect to its rights
under the PSA; provided, however, if conflicts arise between Toshiba and any
Shareholder regarding the exercise of any such right, such right will be
exercised only after consultation with the Owner Board (if such conflict
involves all Shareholders) or with each affected Shareholder (if such conflict
involves a limited number of Shareholders).
     (c) Toshiba will act as an agent for the Company with respect to its
obligations under the PSA; provided, however, if conflicts arise regarding such
obligations, the obligations will be performed only with the consent of the
Owner Board (if such conflict involves all Shareholders) or of each affected
Shareholder (if such conflict involves a limited number of Shareholders).
     (d) Benefits received by the Company with respect to the PSA (net of
administration fees) will, to the extent received in cash, be distributed among
the Shareholders according to their respective Ownership Percentage.
          SECTION 4.02 Repayment of Loans
     The Company will repay in full all loans and advances that were extended by
the Sellers (but not by any member of the Westinghouse Group) to any member of
the Westinghouse Group, together with accrued interest thereon as of PSA
Closing, without deduction for any set-off or counterclaim. The Company will
account for such funds as loans to the respective members of the Westinghouse
Group, to be documented with a loan agreement substantially similar to those
currently in place between the members of the Westinghouse Group and their
Affiliates.
          SECTION 4.03 Annual Budget and Business Plan
     (a) The Board, together with the board of the US Acquisition Co. shall
cause the Westinghouse Group to prepare an annual budget (the “Annual Budget”)
in accordance with a calendar to be set by Toshiba from time to time to schedule
the preparation of an annual budget of Toshiba and its Affiliates (the “Toshiba
Budget Calendar”). The initial Annual Budget shall be prepared, as soon as
practicable after the PSA Closing and shall be promptly delivered thereafter to
the Shareholders. The Owner Board shall be responsible for monitoring the
implementation of the Annual Budget at least once every fiscal quarter.
     (b) The Board shall cause the Westinghouse Group to prepare a mid-term
business plan (the “Business Plan”), which is expected to cover a period of
5 years, in a manner similar to the preparation of the Annual Budget. The
Business Plan shall be promptly delivered to the Shareholders after it is
prepared. The first Business Plan will be based upon the business plan submitted
by Toshiba to Shaw and IHI for their consideration in making their investments
in the Company. The Business Plan will be reviewed and revised, to the extent
necessary, not less often than every three years; provided, that, the Business
Plan will be revised promptly upon changes in the Company or the business
environment that have a material impact on the

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Westinghouse Group or the Business Plan. The Owner Board shall be responsible
for monitoring the implementation of the Business Plan not less often than
annually.
          SECTION 4.04 Shareholder Support of the Westinghouse Group Business
     (a) The Shareholders shall (i) cooperate and discuss how to introduce to
the Westinghouse Group business opportunities that will assist it in achieving
its goals as reflected in the Annual Budget and the Business Plan and
(ii) reasonably make available to the Company and the Westinghouse Group
employees and/or materials that will enable the Westinghouse Group to achieve
such goals.
     (b) The Parties intend that the Company and the Westinghouse Group will
provide for their own capital, and no additional capital will be required from
the Company or the Shareholders. In the event that the Company or the
Westinghouse Group cannot provide its own capital, the Shareholders will
negotiate in good faith concerning the provision of capital and will provide
such necessary financial support as the Shareholders deem appropriate.
     (c) If customers, regulatory agencies, financial institutions or other
relevant parties require any guarantees from the Westinghouse Group’s parent
company in the ordinary course of Westinghouse Group business such as those set
forth in Schedule B hereto, Toshiba will provide such guarantees; provided,
however, that Toshiba may refuse to provide such guarantee if and to the extent
the scope of guarantee coverage includes the business of any Shareholder (or in
case of Shaw Sub, Shaw) other than Toshiba and its Affiliates. If Toshiba is
required to expend any cash or otherwise incur a liability in connection with
its performance of such guarantee, the Company or the Westinghouse Group shall
reimburse Toshiba for such cash or liability, and Toshiba shall have no claim
against any other Shareholder in respect of any such cash or liability.
     (d) The Westinghouse Group will use their own insurance provider; provided,
that Toshiba will use its reasonable efforts to cause its insurance providers to
insure the Westinghouse Group, at the Westinghouse Group’s expense, if it would
result in a cost saving to the Westinghouse Group.
     (e) Each Shareholder may provide to the Westinghouse Group staff support
and other support not in the ordinary course of business; provided, however,
each Shareholder must execute a separate contract with the Westinghouse Group
for such services; provided further that such services will be performed for
reasonable consideration.
          SECTION 4.05 Personnel Matters
     Except as set forth in Article 3, all decisions as to staffing and
personnel matters relating to the Company, including recruiting sources,
appropriate levels of staffing, the appropriate mix of professionals and
training shall be made by the President.
          SECTION 4.06 Coordination Office
     (a) Toshiba shall cause Westinghouse Electric Company LLC (“WEC”) to have a
department or division called the “Coordination Office”. The functions of the
Coordination

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Office will be: (i) supporting the creation of synergy between the Shareholders
businesses and the Westinghouse Group business; (ii) identifying and developing
business opportunities for the Shareholders in the Westinghouse Group; and
(iii) managing day-to-day communication with the Shareholders. The actual scope
of the operation of the Coordination Office shall be determined by Toshiba after
the consultation with the other Shareholders.
     (b) The Coordination Office will have a manager (the “Coordination
Manager”) who is appointed or caused to resign by the WEC board of directors
based on the request by the President of the Company.
     (c) The Coordination Office will be properly staffed, so that the
Coordination Manager may communicate on a day-to-day basis with the
Shareholders. Necessary staff will be sent from WEC and/or each Shareholder.
ARTICLE 5
CERTAIN AGREEMENTS AMONG THE COMPANY AND THE SHAREHOLDERS
          SECTION 5.01 Confidentiality
     (a) Each Shareholder other than Toshiba UK agrees to keep confidential, and
not to make any use of nor to disclose to any Person any business, economic,
financial or marketing information or other confidential or proprietary
information of the Company, the Westinghouse Group or of the other Shareholders
or any Affiliate thereof, including, without limitation, intellectual property
of a confidential nature (collectively, the “Confidential Information”) (other
than disclosure to such Shareholder’s Affiliates or such Shareholder’s or any
Affiliate’s employees, agents, advisors, or representatives responsible for
matters relating to the Company (such Affiliates and each such Person (but not
including any Affiliate of such Shareholder or any other such Person who is an
employee, director, Affiliate or agent of a Competitor of Toshiba or the
Westinghouse Group, regardless of his position with, or relationship to, such
Shareholder) being hereinafter referred to as an “Authorized Representative”)
or, in the case of Shaw Sub, disclosure to its actual or prospective finance
parties (provided that Shaw Sub shall not provide any Confidential Information
to any finance party, or any other Person, who is a Competitor of the
Westinghouse Group) in accordance with the terms of (or the implementation of)
its financing arrangements for the purchase of its Shares; provided, that, prior
to any such disclosure to any Authorized Representative or finance party, each
Shareholder other than Toshiba UK shall advise such Authorized Representative or
finance party of the obligations set forth in this Section 5.01 and direct such
Authorized Representative or finance party to treat such Confidential
Information confidentially). Notwithstanding the foregoing, the following will
not constitute “Confidential Information” for purposes of this Section 5.01:
(i) information that is publicly known at the time of proposed disclosure by
such Shareholder, Authorized Representative, or finance party (ii) information
that is obtained by a Shareholder, an Authorized Representative, or a finance
party from a third party other than the Company, members of the Westinghouse
Group or another Shareholder who, to the knowledge of the Shareholder or the
Authorized Representative, is not disclosing such information in breach of a
duty of confidentiality; (iii) information that is developed by such Shareholder
or Authorized Representative independent of any Confidential Information of the
Company, any member of the Westinghouse Group or

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another Shareholder or (iv) financial statements and other information required
to be disclosed by Shaw pursuant to the Securities Exchange Act of 1934 and the
rules thereunder or required to be disclosed by Toshiba or IHI under the
Securities and Exchange Law of Japan.
     (b) In the event that any Shareholder (or any of its Authorized
Representatives or any finance party) other than Toshiba UK receives a request
to disclose all or any part of the Confidential Information (by oral questions,
interrogatories, requests for information or other processes) or if any
Shareholder (or any public company which Controls such Shareholder) is required
to disclose all or any part of the Confidential Information pursuant to any rule
or requirement of the Securities Exchange Commission, or a similar governmental
agency or listing authority, such Shareholder agrees to (i) immediately notify
the Company in writing of the existence, terms and circumstances surrounding
such request, (ii) consult with the Company on the advisability of taking
legally available steps to resist or narrow such request and, upon the request
of and at expense of the Company provide reasonable cooperation with respect to
any efforts by the Company to obtain a protective order or other appropriate
remedy, and (iii) if disclosure of such Confidential Information is required,
exercise its reasonable best efforts, at the Company’s request and expense, to
obtain an order or other reliable assurance that confidential treatment will be
accorded to any portion (or all) of the disclosed portion of the Confidential
Information as the Company so designates. Notwithstanding the foregoing, after
compliance with the immediately preceding sentence, a Shareholder (or any of its
Authorized Representatives or any finance party) may disclose Confidential
Information as required by any such governmental authority to which it is
subject, provided that it will (i) inform such authority that the Confidential
Information is subject to this Agreement, (ii) furnish a copy of this Agreement
to such authority if required to do so, (iii) furnish only that portion of the
Confidential Information which the Shareholder believes in good faith, after
receiving advice from counsel, it is legally required to disclose, (iv) exercise
its reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded to such Confidential Information, and (v) advise the Company in
writing prior to making such disclosures.
     (c) The provisions of Section 5.01 (a) and (b) above shall apply mutatis
mutandis to Toshiba UK if the Confidential Information of Shareholders other
than Toshiba UK and its Affiliates is concerned.
     (d) Each Shareholder will take adequate security and precautionary measures
to effect compliance with this Section 5.01 by its Authorized Representatives
who shall be given access to Confidential Information as permitted herein and
will be responsible for such compliance by such Persons.
          SECTION 5.02 Access
     Subject to the confidentiality obligations of each Shareholder and its
Authorized Representatives under Section 5.01, each Shareholder shall have the
right, during usual business hours upon reasonable notice and at such
Shareholder’s expense, to (i) visit the offices of the Company in order to
inspect the books and records of the Company, (ii) inspect the books and records
of the Westinghouse Group, but not at the offices of the Westinghouse Group; and
(iii) discuss the affairs of the Company and Westinghouse Group with the
officers of the Company and Westinghouse Group. The Company shall not be
required to maintain any books and

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records for a period in excess of five years from the date of the making or
receipt thereof, unless a Shareholder reasonably requests that they be
maintained for a longer period, except for those books and records, if any,
required by applicable law to be kept for a longer period.
          SECTION 5.03 Financial Statements
     (a) The Company’s fiscal year shall begin on April 1 and end on March 31 of
the following year. In addition to the Company’s obligations pursuant to
applicable law, as soon as practicable following the end of each fiscal year of
the Company, but in any event within 75 days after the end of each fiscal year
(unless the Company obtains an extension from the Shareholders, which shall not
be unreasonably delayed or withheld), the Company shall cause to be prepared and
furnished to each Shareholder, at the Company’s expense, consolidated financial
statements consisting of a balance sheet, profit and loss account and cash flow
statement of the Company and its subsidiaries including financial notes thereto,
for such fiscal year, in each case setting forth comparative figures for the
preceding fiscal year (except with respect to the initial such financial
statements, for which a prior period comparison will not be required), and
certified by independent certified public accountants of a Big Four Accounting
Firm as to fairness of presentation, consistency and preparation in accordance
with US generally accepted accounting principles (“GAAP”) audited in accordance
with US generally accepted auditing standards.
     (b) No later than 40 days following the end of each fiscal quarter (unless
the Company obtains an extension from the Shareholders, which shall not be
unreasonably delayed or withheld), the Company shall cause to be prepared and
furnished to each Shareholder, at the Company’s expense, unaudited consolidated
financial statements of the Company and its subsidiaries including financial
notes thereto, in each case setting forth comparative figures for the related
periods in the prior fiscal year (except with respect to financial statements
provided for the initial four quarters, for which prior period comparisons will
not be required) and certified by the Company as to preparation in accordance
with GAAP (except for the absence of notes thereto).
     (c) As soon as practicable following the end of each month, the Company
shall cause to be prepared and furnished to each Shareholder, at the Company’s
expense, financial statements and other reports of the Company as and in the
format reasonably requested by Toshiba UK.
     (d) Subject to Section 5.01, at the reasonable request of any Shareholder
and at such Shareholder’s expense, the Company shall prepare and deliver to each
Shareholder, as soon as reasonably practicable following such request, any
additional financial information and statements as such Shareholder shall from
time to time reasonably request in order to prepare such Shareholder’s
consolidated financial statements and/or exercise its rights and obligations
under this Agreement. The Company shall have no obligation to deliver such
information if, and to the extent that, the collection and/or production of such
information would adversely impact the Company’s day-to-day operations;
provided, however, that the Company shall have the obligation to prepare and
deliver three years of historical audited and interim unaudited financial
information of the Westinghouse Group prepared in accordance with GAAP and such
other financial information as required to be filed by Shaw with the Securities
Exchange Commission. The requesting Shareholder shall be responsible for any
incremental costs or expenses incurred

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by the Westinghouse Group in connection with additional information it requests
pursuant to this Section 5.03(d).
          SECTION 5.04 Public Announcements
     The Parties agree to consult with each other before issuing any press
release or making any public statement with respect to the Company or its
affairs, except for such releases and statements issued or made by the Company
in the ordinary course of business and, except as may be required by applicable
law, rule or regulation or any listing agreement with any securities exchange,
no Party will issue any such press release or make any such public statement
without the prior approval of the other Parties hereto, which shall not be
unreasonably withheld or delayed.
          SECTION 5.05 No Inconsistent Actions
     Each Shareholder agrees that, except as expressly permitted in or required
by this Agreement, it shall not (a) grant any proxy, or enter into or agree to
be bound by any voting trust, with respect to any Shares, (b) enter into any
shareholder agreements or arrangements of any kind with any Person with respect
to any Shares or (c) take any other action which is inconsistent with the
provisions of this Agreement, including, but not limited to, agreements or
arrangements with respect to the acquisition, disposition or voting of Shares
(but except for any financing activities of Shaw (provided, however, that the
key terms of such activities shall be disclosed to Toshiba in advance and
reasonably acceptable to Toshiba) and the Put Option Agreement), or act, for any
reason, as a member of a group or in concert with any other Persons in
connection with the acquisition, disposition or voting of Shares in any manner
which is inconsistent with the provisions of this Agreement.
          SECTION 5.06 No Apparent Authority
     Neither the Company nor any Director, officer or employee thereof shall, in
such capacity, have the authority to bind, commit or otherwise obligate any
Shareholder (whether in its capacity as Shareholder or otherwise) or its
Affiliates (other than the Company and its Subsidiaries) in any manner
whatsoever.
          SECTION 5.07 Undertaking by Shaw Sub
     Shaw Sub will not conduct any activities other than activities related to
its ownership of the Class A Shares and the shares of Class A Stock of the US
Acquisition Co. and any financing activities related thereto.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
     Each of the Parties hereby, severally and not jointly, represents and
warrants to the other Parties as follows:
          SECTION 6.01 Organization

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     Such Party is duly organized, validly existing and (where such concept is
recognized) in good standing under the laws of its jurisdiction of organization
with all requisite power and authority to own, operate and lease its properties
and to carry on its business as now being conducted.
          SECTION 6.02 Authorization, Validity and Enforceability of This
Agreement
     Such Party has the power and authority to execute, deliver and perform this
Agreement, has taken all necessary action to authorize its execution and
delivery of this Agreement and has taken all necessary corporate action to
perform this Agreement and to consummate the transactions contemplated herein.
This Agreement has been duly executed and delivered by such Party and, assuming
valid execution and delivery by the other Parties, constitutes the legal, valid
and binding agreement of such Party, enforceable against it in accordance with
its terms.
ARTICLE 7
TRANSFER OF SHARES
          SECTION 7.01 General Restrictions
     (a) Except with the prior written consent of the other Shareholders, in the
case of a Transfer by Toshiba UK, or of Toshiba UK, in the case of a Transfer by
any other Shareholders, no Shareholder shall Transfer any of its Shares prior to
October 1, 2012, except for Permitted Transfers.
     (b) In addition to the restriction on Transfers set forth in
Section 7.01(a), no Shareholder shall Transfer any of its Shares without the
prior approval of the Board and the Owner Board, whether or not such Transfer
occurs before, on or after the Exercise Period End Date (as defined in the Put
Option Agreement), except for Permitted Transfers.
     (c) As a condition to the effectiveness of any Transfer permitted by this
Agreement, the transferee must deliver a certificate to the Company and the
other Shareholders stating that it agrees to be bound by the terms and
conditions of this Agreement in accordance with Section 10.09, unless the
transferee is already a Party.
     (d) Subject to applicable law and where applicable, subject to receipt by
the Company of a duly executed and stamped stock transfer form, all Transfers of
Shares, including, without limitation, Transfers by encumbrance of Shares, shall
be recorded or noted in the Company’s register of members.
     (e) Upon any Transfer made in accordance with this Article 7, the
Shareholders shall make such amendments to this Agreement as shall be necessary
to reflect the addition of a transferee, if applicable.
          SECTION 7.02 Permissible Transfers
     (a) Each Shareholder may Transfer, upon receipt of the prior written
consent of the other Shareholders, which consent shall not be unreasonably
withheld, all (but not less than all)

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of its Shares to any of its Affiliates that such Shareholder Controls; provided,
however, (i) such Shareholder shall pay all costs, taxes and fees associated
with such transfer, (ii) any Affiliate to whom Shares are transferred, prior to
such transfer, shall deliver an certificate to the Company and the other
Shareholders stating that it agrees to be bound by the terms and conditions of
this Agreement in accordance with Section 10.09 and the transferring Shareholder
shall be and remain jointly and severally liable with its transferee Affiliates
with respect to such Affiliates’ performance of this Agreement, (iii) all
necessary third party consents and regulatory approvals with respect to such
proposed transfer shall have been obtained and (iv) prior to such time as such
Shareholder no longer Controls such Affiliate, such Shareholder will reacquire
the Shares from such Affiliate.
     (b) Notwithstanding the restrictions on Transfer set forth in this
Article 7, for so long as Toshiba UK’s Ownership Percentage exceeds fifty-one
percent (51%), Toshiba shall be entitled to freely transfer its Shares to one or
more additional investors; provided, however, that (i) such Transfer shall be
subject to the restrictions of this Agreement if, immediately following such
Transfer, Toshiba’s Ownership Percentage would be less than fifty-one percent
(51%) and (ii) all such Transfers shall comply with the provision of
Sections 7.01(c) and 7.01(d). For so long as Shaw Sub’s Ownership Percentage
exceeds fifteen percent (15%), Toshiba UK shall not transfer any Shares pursuant
to this Section 7.02(b) to a Person whose scope of business is substantially
similar to that of Shaw, without Shaw Sub’s prior written consent; provided that
Toshiba UK shall not transfer any Shares pursuant to this Section 7.02(b) to
such a Person without Shaw Sub’s prior written consent if Shaw Sub’s Ownership
Percentage falls below fifteen percent (15%) solely due to dilution caused by
equity offerings of the Company.
     (c) Notwithstanding the restrictions on Transfer set forth in this
Article 7, Shaw Sub and IHI shall be entitled to freely transfer their Shares
pursuant to the Put Option Agreements.
          SECTION 7.03 Legend on Share Certificates
In addition to any other legend that may be required, each certificate for
Shares that is issued to any holder thereof shall bear a legend in substantially
the following form:
“THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE SHAREHOLDERS AGREEMENT DATED AS OF OCTOBER 4, 2006,
AS THE SAME MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED
UPON REQUEST FROM THE ISSUER HEREOF.”
          SECTION 7.04 Rights of First Offer
     (a) If, but always subject to the provisions of Section 7.01, any
Shareholder proposes to Transfer any Shares (a “Transferring Shareholder”) other
than pursuant to Section 7.02, the Transferring Shareholder shall, at least
60 days prior to such Transfer, deliver to the other Shareholders an offer (the
“First Offer”) to Transfer such Shares upon the terms referred to in this
Section 7.04. The First Offer shall state (i) the number and type of Shares the
Transferring Shareholder proposes to Transfer (the “First Offer Shares”) and the
name of the Transferring

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Shareholder, (ii) the name and address of the proposed offeree (if determined)
and (iii) the proposed amount and type of consideration (including, if the
consideration consists in whole or in part of non-cash consideration, such
information available to the Transferring Shareholder as may be reasonably
necessary for the other Shareholders to properly analyze the economic value and
investment risk of such non-cash consideration) and the terms and conditions of
payment of the proposed Transfer, and shall be accompanied by a written offer
from the proposed offeree (if determined) confirming the terms of the First
Offer. The First Offer shall remain open and irrevocable for a period of sixty
(60) days (the “First Offer Acceptance Period”) from the date of its receipt by
the other Shareholders.
     (b) Any Shareholder may accept the First Offer and purchase its pro rata
portion of the First Offer Shares (based on the ratio such Shareholder’s
Ownership Percentage bears to the Ownership Percentages of all Shareholders to
which a First Offer Notice was delivered) by delivering to the Transferring
Shareholder a notice of such acceptance in writing within the First Offer
Acceptance Period. If any of the other Shareholders (other than Toshiba UK)
fails to accept the First Offer, then Toshiba UK shall have the right to accept
such portion of the First Offer as is not accepted by such other Shareholder
within 14 days after the expiry of the First Offer Acceptance Period (the
“Extended First Offer Acceptance Period”). As promptly as practicable after any
Shareholder’s acceptance of the First Offer, such Shareholder and the
Transferring Shareholder shall enter into a customary purchase agreement for the
Transfer of such shares reflecting the terms and conditions set forth in the
First Offer Notice.
     (c) If the other Shareholders do not, in the aggregate, purchase all of the
First Offered Shares, then the Transferring Shareholder may, within sixty
(60) days after the expiration of the First Offer Acceptance Period or the
Extended First Offer Acceptance Period, as the case may be, Transfer to the
original offeree thereof any or all of the First Offered Shares not purchased by
the other Shareholders on terms and conditions no more favorable to the original
offeree thereof than are described in the First Offer, subject to Sections 7.01
and 7.05, if applicable.
     (d) The provisions of this Section 7.04 shall not apply to Transfers
contemplated by Section 7.05, Section 7.06 and any Permitted Transfer.
          SECTION 7.05 Tag-Along Rights
     (a) Toshiba UK or any transferee thereof hereby agrees that if it wishes to
Transfer, in one transaction or in a series of related transactions, to any
third party Shares constituting a majority of the Shares held by it as of the
Closing Date, then the terms and conditions of such Transfer shall include an
offer by the transferee to the other Shareholders (the “Tagging Shareholders”)
to include, at the option of each Tagging Shareholder, in the Transfer to the
third party, all of the Shares beneficially owned by such Tagging Shareholder.
If Toshiba UK receives a bona fide offer to Transfer from a third party (a
“Tag-Along Offer”), in one transaction or in a series of related transactions, a
majority of the Shares held by it as of the Closing Date which it desires to
accept, Toshiba UK shall then cause the Tag-Along Offer to be reduced to writing
and shall provide written notice (the “Tag-Along Notice”) of such Tag-Along
Offer to the Tagging Shareholders in the manner set forth in this Section 7.05.
The Tag-Along Notice shall contain an offer by such third party to purchase or
otherwise acquire, in addition to the Shares being acquired from Toshiba UK, all
of the Shares from the Tagging Shareholders at

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the same price and on the same terms and conditions as contained in the
Tag-Along Offer and shall be accompanied by a true and correct copy of the
Tag-Along Offer (which shall identify the third party purchaser, the number of
Shares which the third party is seeking to purchase or otherwise acquire with
respect to which the Shareholders other than Toshiba UK have not exercised
rights of First Offer under Section 7.04, the price contained in the Tag-Along
Offer and all the other terms and conditions of the Tag-Along Offer). Each of
the Tagging Shareholders desiring to accept the Tag-Along Offer shall, within
sixty (60) days after the date the Tag-Along Notice is received by such Tagging
Shareholder (the “Tag-Along Notice Period”), deliver a written notice to Toshiba
UK (the “Tag-Along Exercise Notice”). In the event such third party purchaser
shall modify the Tag-Along Offer in any way, Toshiba UK shall send an amended
Tag-Along Notice to the Tagging Shareholders reflecting such modifications and
each Tagging Shareholder shall have until the later of thirty (30) days after
the date such amended Tag-Along Notice is received by the it or the end of the
original Tag-Along Notice Period, to deliver an amended Tag-Along Exercise
Notice.
     (b) If as of the termination of the Tag-Along Notice Period, any Tagging
Shareholder shall not have accepted the Tag-Along Offer, such Tagging
Shareholder shall be deemed to have waived any and all of its rights under this
Section 7.05; provided, that, such sale or disposition is completed on the terms
set forth in the Tag-Along Notice within thirty (30) days after the termination
of the Tag-Along Notice Period.
          SECTION 7.06 Call Rights
     (a) In the event that any Shareholder other than Toshiba UK is or becomes
(or there are reasonable grounds for believing any Shareholder other than
Toshiba UK is or has become) insolvent, in liquidation or in voluntary or
involuntary reorganization (each, an “Insolvency Event”), any of the other
Shareholders may request valuation of the Company in accordance with
Section 7.06(c). Within ninety (90) days after the determination of the Company
Value pursuant to Section 7.06(c), each Shareholder shall have the right to
purchase some or all its pro rata portion of the Shares owned by the Shareholder
triggering the Insolvency Event (the “Insolvent Shareholder”) (such pro rata
portion to be equal to the ratio of such purchasing Shareholder’s Ownership
Percentages to the Ownership Percentages of all Shareholders other than the
Insolvent Shareholder) by delivering to the Insolvent Shareholder a notice of
such acceptance in writing within such period. Each Shareholder may also
exercise the right before the determination of the Company Value pursuant to
Section 7.06(c), and if so such Shareholder may cancel the exercise within
thirty (30) days after such determination. As promptly as practicable after any
Shareholder’s exercise of such right (or if a Shareholder exercises such right
before such determination of the Company Value, after such determination), such
Shareholder and the Insolvent Shareholder shall enter into a customary purchase
agreement for the purchase of such Shares. If one or more of the Shareholders
has not indicated a desire to purchase all of the Shares permitted to be
purchased by it pursuant to this Section 7.06(a), then the other Shareholders
who have indicated a desire to purchase Shares in excess of the amounts
otherwise permitted to be purchased by such Shareholder pursuant to this
Section 7.06(a) shall be allocated the right to purchase an additional number of
Shares until the entire number of Shares owned by the Insolvent Shareholder and
desired to be so purchased shall have been allocated among the participating
Shareholders.

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     (b) In the event that Control of any Shareholder (in case of Shaw Sub,
including Control of Shaw) other than Toshiba UK is directly or indirectly
transferred or conveyed to, or is acquired by (or there are reasonable grounds
for believing it has been), (i) a Competitor of Toshiba or (ii) any other Person
and Toshiba UK or any other Person has not consented to such change in Control
(which consent will not be unreasonably withheld in the case of an acquisition
by any Person other than a Competitor) (a “CIC Event”), Toshiba UK may request
valuation of the Company in accordance with Section 7.06(c). Within ninety
(90) days of the determination of the Company Value pursuant to Section 7.06(c),
Toshiba UK shall have the right to purchase all (but not less than all) of the
Shares owned by the Shareholder triggering the CIC Event (the “CIC Shareholder”)
by delivering to the CIC Shareholder a notice of such acceptance in writing
within such period. Toshiba UK may also exercise the right before the
determination of the Company Value pursuant to Section 7.06(c), and if so
Toshiba UK may cancel the exercise within thirty (30) days after such
determination. As promptly as practicable after Toshiba UK’s exercise of such
right (or, if Toshiba UK exercises such right before such determination of
Company Value, after such determination), Toshiba UK and the CIC Shareholder
shall enter into a customary purchase agreement for the purchase of such Shares.
The CIC Shareholder agree not to exercise any of its rights hereunder as well as
those as a shareholder pending the completion of the acquisition by Toshiba of
the Shares owned by the CIC Shareholder. For the avoidance of doubt, the CIC
Shareholder may not disclose any Confidential Information of the Company, the
Westinghouse Group, and other Shareholders or their respective Affiliates to any
third party including a Person Controlling the CIC Shareholder, except in
compliance with this Agreement.
     (c) Upon the occurrence of an Insolvency Event or a CIC Event, the
Shareholders shall seek to agree upon the fair market value of the Company as of
the date of such event determined on a going concern basis, without minority
discount, marketability discount or premium for change of control, taking into
account such considerations as would customarily affect the price at which a
willing seller would sell and a willing buyer would buy in an arm’s-length
transaction (the “Company Value”). If the Shareholders are unable to agree upon
the Company Value within 60 days after the Insolvency Event or CIC Event, as
applicable, then Shareholders holding 1% over the Ownership Percentage of
Toshiba UK and its Affiliates at the time of the Insolvency Event or CIC Event
(i.e., initially Shareholders holding seventy-eight percent (78%)) of the Shares
shall appoint an independent investment banking firm of recognized international
standing (the “IB Firm”) reasonably acceptable to each of them to make a
determination of the Company Value. When the IB Firm has been selected, each of
the Shareholders shall be permitted to submit a written submission within
20 days as to the matters such Shareholder believes are relevant to
determination of the Company Value by the IB Firm; copies of the written
submissions of each Shareholder shall be sent to the other Shareholders. The IB
Firm shall allow each Shareholder 10 days in which to comment in writing on the
written submissions of the other Shareholders. Within 45 days thereafter, the IB
Firm shall determine the Company Value.
     (d) In the event that any Shareholder exercises the put rights set forth in
its Put Option Agreement and the call rights set forth in this Section 7.06 have
been, or subsequently are, exercised with respect to the same Shares, the
provisions of such Put Option Agreement shall have priority.

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     (e) In no event shall a holder of Class A Shares have any obligation to
sell any Class A Shares under this Section 7.06 unless all its Class A Shares
are purchased hereunder and all of such Shareholder’s (or its Affiliate’s)
Class A Shares of the US Acquisition Co. are also purchased concurrently.
ARTICLE 8
ARBITRATION
          SECTION 8.01 Arbitration
     (a) All disputes, controversies or claims (“Disputes”) arising out of or
relating to this Agreement shall first be settled as far as possible by
negotiations between the Parties to the Dispute, in the form of meetings between
senior-management level representatives of such Parties from their respective
nuclear energy businesses, upon the written request (a “Request”) by any such
Party to the other such Parties.
     (b) If the Parties to the Dispute are unable to resolve a Dispute within
two weeks after receipt by a Party of a Request, then such Dispute shall be
settled as far as possible by negotiations between the Parties to the Dispute,
in the form of meetings of representative officers (senior vice president or
equivalent or above) of such Parties from their respective nuclear energy
business.
     (c) If the Parties to the Dispute are unable to resolve a Dispute within
four (4) weeks after receipt by any Party of a Request, then any Party may
submit the Dispute to arbitration to be finally and exclusively resolved under
the Arbitration Rules of the International Chamber of Commerce (“ICC”) then in
effect (the “Rules”), except as modified herein. Except as otherwise agreed by
the Parties to any such arbitration, any such arbitration shall be conducted by
a number of arbitrators equal to the number of Parties to the Dispute plus one
and each of the Parties to the Dispute shall each select one arbitrator in
accordance with the Rules, provided, however, that if both Toshiba and Toshiba
UK are the Parties to the Dispute, they should be considered as one Party for
these purposes and they shall be entitled to select only one arbitrator. The
arbitrators so nominated, once confirmed by the International Court of
Arbitration of the ICC (“ICC Court”), shall nominate an additional arbitrator to
serve as chairman, such nomination to be made within 30 days of the confirmation
by the ICC Court of the second arbitrator. If the initial arbitrators shall fail
to nominate an additional arbitrator within said 30-day period, such additional
arbitrator shall be appointed by the ICC Court. The arbitrators shall be
required to submit a written statement of their findings and conclusions. Except
as otherwise agreed by the Parties to such Dispute, exclusive venue of
arbitration shall be New York, New York, and the language of the arbitration
shall be English and each of the Parties hereby submits to the non-exclusive
jurisdiction of the state and federal courts located in New York, New York for
such purpose and for the enforcement of any arbitral award. By agreeing to
arbitration, the Parties do not intend to deprive any court of its jurisdiction
to issue any pre-arbitral injunction, pre-arbitral attachment or other order in
aid of arbitration proceedings.

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     (d) None of the Parties or the arbitrators shall select any Arbitrator for
the arbitral tribunal who has any interest in the Dispute or who has, or within
the immediately preceding five years has had, any economic or other relationship
with any Party to the Dispute.
     (e) The award of the arbitrators shall be final and binding upon the
Parties, and shall be the sole and exclusive remedy between and among the
Parties regarding any claims, counterclaims, issues, or accounting presented to
the arbitral tribunal. Judgment upon any award may be entered in any court
having jurisdiction thereof.
ARTICLE 9
LIQUIDATION
          SECTION 9.01 Liquidation Events
     The Shareholders shall seek to commence the winding up of the Company upon
the first to occur of any of the following (each a “Liquidation Event”):
     (i) the sale of all or substantially all of the Company’s assets; and
     (ii) an affirmative approval of the Board to liquidate or otherwise
dissolve or wind up the Company.
          SECTION 9.02 Liquidation Procedures
     (a) Upon the occurrence of a Liquidation Event, the Directors shall make or
cause to be made all appropriate filings, notifications and certifications and
take all other actions necessary or desirable in order to effectuate the orderly
liquidation of the Company in accordance with the terms of this Agreement and
all statutory requirements.
     (b) To the extent that there are surplus proceeds of the liquidation of the
Company after the debts of the Company have been paid off in accordance with the
statutory order of priority, such proceeds shall be distributed to the holders
of the Shares in compliance with the provisions and preferences set forth in the
Memorandum and Articles of Association of the Company.
ARTICLE 10
MISCELLANEOUS
          SECTION 10.01 Amendments; Waivers; Termination
     (a) Any provision of this Agreement may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by Shareholders representing 1% over the Ownership Percentage of
Toshiba UK and its Affiliates at the time of such amendment (i.e., initially
seventy-eight percent (78%)) of the Ownership Percentages of all Shareholders,
or in the case of a waiver, by the Party against whom the waiver is to be
effective. Notwithstanding the foregoing, if any amendment to this Agreement
would adversely affect the

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rights of a Shareholder hereunder, such amendment shall require the express
written consent of such Shareholder.
     (b) No failure or delay by any Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
     (c) This Agreement shall terminate with respect to Shareholders who no
longer hold any Shares of the Company and such Shareholders shall no longer be
party to this Agreement.
          SECTION 10.02 Expenses
     Except as otherwise specifically provided herein, all costs and expenses
incurred by a Party in connection with the execution and delivery of this
Agreement shall be paid by the Party incurring such costs or expenses.
          SECTION 10.03 Notices
     Any notices and other communications required to be given pursuant to this
Agreement shall be in writing in English and shall be effective upon delivery by
hand or upon receipt if sent by mail (registered or certified mail, postage
prepaid) or upon transmission if sent by facsimile (with request for
confirmation of receipt in a manner customary for communications of such
respective type), except that if notice is received after 5:00 p.m., local time,
on a Business Day at the place of receipt, it shall be effective as of the
following Business Day. Notices are to be addressed as follows:
          If to Toshiba or Toshiba UK or the Company, to:
Toshiba Corporation
Toshiba Building 31B
1-1-1, Shibaura, Minato-ku, Tokyo 105-8001, Japan
Attention: General Manager Legal Affairs Department, Power Systems and Services
Company
Facsimile No.: + 81-3-5444-9183
Email: ushio.kawaguchi@toshiba.co.jp
          with a copy, which shall not constitute notice, to:
Skadden, Arps, Slate, Meagher & Flom LLP
Izumi Garden Tower 21st Floor
1-6-1 Roppongi Minato-ku, Tokyo, 106-6021, Japan
Attention: Mitsuhiro Kamiya, Partner
Facsimile No.: + 81-3-3568-2626
Email: mkamiya@skadden.com
          If to Nuclear Energy Holdings, L.L.C. to:

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The Shaw Group, Inc.
4171 Essen Lane
Baton Rouge, Louisiana 70809
Attention: Gary Graphia, Secretary and General Counsel
Facsimile No.: + 1-225-925-9146
Email: gary.graphia@shawgrp.com
          with a copy, which shall not constitute notice, to:
Vinson & Elkins LLP
1001 Fannin Street, Suite 2300
Houston, TX 77002
Attention: David Stone, Partner
Facsimile No.: + 1-713-615-5141
Email: dstone@velaw.com
          If to IHI, to:
Ishikawajima-Harima Heavy Industries Co., Ltd.
1, Shin-Nakahara-cho,
Isogo-ku, Yokohama 235-8501, Japan
Attention: Kazuo Watanabe, Associate Director & Division Director,
Nuclear Power Division
Facsimile No.: +81-45-759-2524
Email: kazuo_watanabe@ihi.co.jp
          with a copy, which shall no constitute notice, to
White & Case LLP/Tokyo Office
19-1, Kandanishiki-cho 1-chome
Chiyoda-ku, Tokyo 101-0054, Japan
Attention: Robert F. Grondine
Facsimile No.: +81-3-3259-0155
Email: rgrondine@whitecase.com
or to such other respective addresses as any Party shall designate to the others
by notice in writing, provided that notice of a change of address shall be
effective only upon receipt. Any Person who becomes a Party shall provide its
address and fax number to the Company, which shall promptly provide such
information to each other Shareholder.
          SECTION 10.04 Governing Law; Severability
     This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to the principles of
conflicts of law thereof (other than Sections 5-1401 and 5-1402 of the New York
General Obligation Law) but except to the extent the internal laws of the State
of Delaware are required to apply. If it shall be determined by an arbitration
tribunal or a court of competent jurisdiction that any provision or wording of
this

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Agreement shall be invalid or unenforceable, such invalidity or unenforceability
shall not invalidate the entire Agreement, in which case this Agreement shall be
construed so as to limit any term or provision so as to make it enforceable or
valid within the requirements of New York and English law, and, in the event
such term or provision cannot be so limited, this Agreement shall be construed
to omit such invalid or unenforceable provisions.
          SECTION 10.05 Counterparts
     This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. Executed counterparts delivered by
facsimile or electronically will be considered for all purposes to be equivalent
to the executed original for binding effect.
          SECTION 10.06 Entire Agreement
     This Agreement contains the entire agreement among the Parties with respect
to the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, among the Parties with respect to such
subject matter, including the Participation Agreements. No representation,
inducement, promise, understanding, condition or warranty not set forth in this
Agreement has been made or relied upon by any Party.
          SECTION 10.07 Effectiveness
     This Agreement shall become effective subject to and effective upon the
Closing and only upon the execution and delivery hereof by all of the Parties
and shall continue in full force and effect until the dissolution of the
Company, except as may be terminated earlier by the Parties; provided, however,
that if the Investment Agreement is terminated prior to the Closing this
Agreement shall also terminate as to such terminated Parties, without any
further action by the Parties.
          SECTION 10.08 Binding Effect; Benefit
     This Agreement shall inure to the benefit of and, subject to Section 10.07,
be binding upon the Parties and their respective heirs, successors, legal
representatives and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Parties and their
respective heirs, successors, legal representatives and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
          SECTION 10.09 Assignability
     (a) Except as otherwise expressly provided herein, neither this Agreement
nor any right or obligation hereunder may be assigned or delegated in whole or
in part by any Party without the prior written consent of the other Parties, and
any such attempted assignment or delegation without such consent shall be null,
void ab initio and without effect. Any permitted assignment of this Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. Any Person acquiring Shares who is
required by the terms of this Agreement to become a Party hereto shall execute
and deliver to the

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Company and the other Shareholders an agreement to be bound by this Agreement
and shall thenceforth be a “Shareholder,” and any Shareholder who ceases to
beneficially own any Shares at all shall cease to have any rights or obligations
hereunder (other than as provided in Sections 3.06, (but only with respect to
the A Accruals, as such term is defined in the Memorandum and Articles of
Association of the Company), 5.01, 8.01, Article 9 (but only with respect to the
A Accruals) and 10.02).
     (b) The restrictions in paragraph (a) above shall not apply to collateral
assignment by Shaw Sub in connection with its financing arrangements for the
purchase of its Shares; provided that (i) the terms of any such collateral
assignment require that any enforcement thereof shall only be carried out in
conjunction with a transfer to such assignee of the Shares owned by Shaw Sub and
(ii) such assignee must execute an acknowledgement that it shall be bound by the
obligations of Shaw Sub pursuant to this Agreement as a condition to enforcing
any rights hereunder.
          SECTION 10.10 Headings
     Section headings contained in this Agreement are for reference only and are
not intended to describe, interpret, define or limit the scope or intent of this
Agreement or any provision hereof.
          SECTION 10.11 Survival
     The provisions of Sections 5.01, 7.02, 8.01, 10.02, 10.03, 10.04 and 10.13
and of this Section 10.11 shall survive any termination of this Agreement and
any dissolution of the Company, together with the liability of any Party with
respect to a breach of any agreement or covenant contained herein.
          SECTION 10.12 Further Assurances
     Each Party hereby agrees to execute and deliver all such other and
additional instruments and documents and to do all such other acts and things as
may be reasonably necessary more fully to effectuate this Agreement and carry on
the business of the Company contemplated herein.
          SECTION 10.13 No Third-Party Beneficiaries
     This Agreement is for the benefit of the Parties and is not intended to
confer upon any other Person any rights or remedies hereunder.
          SECTION 10.14 Specific Performance
     Each of the Parties acknowledges and agrees that any breach by it of any
provision of this Agreement would irreparably injure another Party and that
money damages would be an inadequate remedy therefor. Accordingly, each of the
Parties agrees that, in addition to any money damages, the other Parties shall
be entitled to one or more injunctions enjoining any such breach and requiring
specific performance of this Agreement and consents to the entry thereof.
          SECTION 10.15 Preemptive Rights

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     (a) With respect to the issuance by the Company of additional Shares (“New
Shares”), all Shareholders may elect to subscribe for and purchase for the
issuance price offered by the Company a portion of such New Shares sufficient to
maintain its current Ownership Percentage.
     (b) The Company shall give each Shareholder thirty (30) days written notice
before making any sale or offering of New Shares and shall advise the
Shareholder of its rights under this Section 10.15 to participate in such
offering. The notice shall describe the price and the terms on which the Company
proposes to sell, transfer or otherwise sell or distribute such New Shares
together with a calculation of the Shareholder’s Ownership Percentage and the
number of shares it would be allowed to purchase under this section to maintain
its Ownership Percentage after such sale was complete. Each Shareholder then
shall have thirty (30) days after the date of the notice to advise the Company
in writing whether the Shareholder will exercise its rights hereunder and to
deliver payment in full for the New Shares it elects to purchase. If a
Shareholder fails to deliver payment for its portion of the New Shares within
the requisite time period, the Company shall proceed with the offering of such
New Shares according to the plan described in the notice delivered to the
Shareholder and any Shareholder failing to exercise such rights shall have no
further preemptive purchase rights under this section in connection with the
offering.
          SECTION 10.16 No fetter on Company’s powers
     Nothing in this Agreement shall operate to limit or negate in any way the
Company’s ability to exercise any right or power afforded to it by any
applicable law. Any provision purporting to so fetter the Company shall be
severed from this Agreement, which severance shall not affect the validity,
legality or enforceability of the remaining provisions of this Agreement.
          SECTION 10.17 Limited Recourse to Shaw Sub
     (a) Notwithstanding any other provision of this Agreement, the obligations
of Shaw Sub hereunder are limited recourse obligations of Shaw Sub, payable
solely from its own assets and only to the extent of funds available after
repayment in full of the Bonds and all other Secured Obligations. No recourse
shall be had to any of the members, shareholders, subscribers, directors,
officers, partners, employees or agents of Shaw Sub or any of their respective
successors and assigns in respect to the obligations of Shaw Sub hereunder or
arising in connection herewith.
     (b) Each Shareholder agrees not to institute against, or join any other
Person in instituting against, Shaw Sub any bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceedings or other
proceedings under U.S. federal or state bankruptcy or similar laws until at
least one year and one day or, if longer, the applicable preference period then
in effect plus one day, after the repayment in full of the Bonds and all other
Secured Obligations.
For the purposes of this Section 10.17:

31

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“Bonds” means the bonds issued by Shaw Sub on or about the date hereof.
Immediately after the issuance of the Bonds, Shaw Sub shall notify to Toshiba
and the Company the amount and interest rate of the Bonds, provided that Shaw
Sub shall be responsible for making the foreign exchange conversion to yen value
transparent to Toshiba and the Company.
“Secured Obligations” means all amounts owed by Shaw Sub to the secured parties
under and in connection with the Bonds.

32

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

                  TOSHIBA CORPORATION
 
           
 
  By:        
 
     
 
Name: Masao Niwano    
 
      Title: Director, Corporate Senior Executive
Vice President    
 
                TSB NUCLEAR ENERGY INVESTMENT UK LIMITED.
 
           
 
  By:        
 
     
 
Name: Shigenori Shiga    
 
      Title: Director    
 
                NUCLEAR ENERGY HOLDINGS, L.L.C.
 
           
 
  By:        
 
     
 
Name: Gary P. Graphia    
 
      Title: Vice President and Secretary    
 
                ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD.
 
           
 
  By:        
 
     
 
Name: Yasuo Shinohara    
 
      Title: Board Director and Managing Executive Officer, President of Energy
& Plant Operations    
 
                TOSHIBA NUCLEAR ENERGY HOLDINGS (UK) LIMITED
 
           
 
  By:        
 
     
 
Name: Shigenori Shiga    
 
      Title: Director    

 

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SCHEDULE A
List of Permitted Acquisitions or Disposals
1. Fuel
     Investment for cost reduction in the fuel operation.
(M$)

                          Investment Item   FY2008   FY2009   FY2010
Re-conversion facility
    35.8       35.8       35.8  
For regulatory compliance
    22.7       4.7       2.5  
Handling and inspection equipment
    25.4       13.8       5.7  
Sum
    83.9       54.3       44.0  

Note: These investments are not included the investment amount ordinarily made
in the fuel business.
2. PBMR
     Fulfillment of the condition precedent in the new Shareholders Agreement of
PEBBLE BED MODULAR REACTOR (PROPRIETARY) LIMITED which has been assumed by
Westinghouse Electric Company LLC. The balance of obligation is $10 million as
of the date of this Agreement.
3. PaR
     Acquisition of the balance of shares of PaR Nuclear Holding Inc. The cost
of acquisition is expected to be $17.2 million in fiscal year 2007.
A-1

 

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SCHEDULE B
BNFL COMMITMENTS
I. Financial Guarantees

                                  Underlying             Type and Date  
Governing   Contract/   Term of     Beneficiary   of Guarantee   Law  
Obligations   Guarantee   Amount *
Bank One, NA
  Payment Guarantee
Date TBD   England   Credit Line for FX   Unspecified   USD 50,000,000
 
                   
Federal Insurance
Company (Chubb)
  General Agreement of Indemnity 3/8/99   Unspecified   Surety Bonds  
Unspecified   USD 31,077,838
 
                   
JPMorgan Chase Bank, N.A. as Administrative Agent
  Payment Guarantee
4/1/05   New York   Revolving Credit
Facility   Facility Expiry
9/08   USD 600,000,000
 
                   
American Insurance
Group
  Deed of Counter- Indemnity 5/5/03   England   Surety Bonds   Expiry of Last
Bond   USD 64,891,203
 
                   
Bank Brussels
Lambert
  Letter of Undertaking 12/22/00   Unspecified   Credit Facility for Overdrafts,
Advances and Bank Guarantees   Unspecified   EUR 9,915,742
 
                   
Commerzbank AG
  Payment Guarantee
3/22/00   Germany   Credit Facility for Overdrafts, FX and Bank Guarantees  
Facility Expiry   EUR 16,000,000**
 
                   
Deutsche Bank AG
  Payment Guarantee
7/11/03   Germany   Credit Facility for Overdrafts, FX and Bank Guarantees  
6/30/08   EUR 16,000,000**
 
                   
Skandinaviska
Enskilda Banken AB
  Payment Guarantee
12/4/02   England   Credit Line for Bank Guarantees Issued to support Swedish
Pension Plan   10/31/07   SEK 25,000,000
 
                   
BNP Paribas
  Payment Guarantee
11/26/02   England   FX Facility for EdF
Contract   Unspecified   EUR 40,000,000
 
                   
Bayerische Hypo-
Und Veriensbank
AG
  2/25/05   England   FX Facility   Unspecified   USD 15,000,000

 

*   Note: The Amount does not necessarily reflect the current size of BNFL’s
contingent liability pursuant to each guarantee. This is difficult to ascertain
and is subject to variation as underlying obligations change. For credit lines,
surety bonds and FX and credit facilities, the Amount is the total amount of
such instrument (whether drawn or undrawn).   **   Amount to be verified.

B-1

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II. Transactional Guarantees

      Beneficiary   Type and Date of Guarantee
United States Department of Energy
  Performance
6/15/99
 
   
CBS Corporation (Viacom)
  Amended and Restated ESBU Guarantee 3/22/99 of all performance obligations
under the ESBU Asset Purchase Agreements 3/22/99 (Joint and Several Obligation
with Washington Group International, Westinghouse Government Services LLC,
Westinghouse Government Environmental Services LLC, Magnox Electric Ltd., BNFL
USA Group Inc., BNFL Nuclear Services Inc., and BNFL Inc.)
 
   
Ameren Services Company
  Novation of CBS Contracts
8/20/99
 
   
Carolina Power & Light
  Novation of CBS Contracts
2/10/00
 
   
CEZ
  Novation of CBS Contracts
6/28/99
 
   
Duke Energy Corporation
  Novation of CBS Contracts
6/30/00
 
   
Entergy Operations, Inc.
  Novation of CBS Contracts
9/21/99
 
   
Korea Electric Power Corporation
  Novation of CBS Contracts
1 /30/00
 
   
New York Power Authority
  Novation of CBS Contracts
1/19/00
 
   
Rochester Gas & Electric
  Novation of CBS Contracts
2/22/00
 
   
South Carolina Electric & Gas Company
  Novation of CBS Contracts
2/11/00
 
   
Tennessee Valley Authority
  Novation of CBS Contracts
7/7/00
 
   
Barseback Kraft Aktiebolag
  Performance Guarantee in connection with ABB Acquisition
10/27/00
 
   
OKG Aktiebolag
  1. Transfer of ABB contract
10/27/00
2. Transfer of ABB contract
11/5/01

B-2