Document:

exv10w3

 

EXHIBIT
10.3

PUT OPTION AGREEMENT

     This PUT OPTION AGREEMENT (this “Agreement”) is made and entered into on October 13, 2006 (the
“Effective Date”), between Nuclear Energy Holdings, L.L.C., a Delaware limited liability company
(“NEH”), and Toshiba Corporation, a Japanese corporation (“Toshiba”). NEH and Toshiba are also
referred to herein together as the “Parties” and individually as a “Party”.

RECITALS

     A. Subject to the terms and conditions set forth in an Investment Agreement, dated as of
October 4, 2006, among Toshiba, NEH and The Shaw Group Inc., NEH has directly agreed to acquire 280
shares of Class A Stock of TOSHIBA NUCLEAR ENERGY HOLDINGS (UK) LIMITED, a company incorporated in
England (“UK HoldCo”), for a consideration of $280,000,000 and representing, as of the Effective
Date, twenty percent (20.0%) of the outstanding shares in the capital of UK HoldCo (the “Shares”).

     B. On or about the date of this Agreement, NEH proposes to issue up to JPY50,980,000,000
aggregate principal amount of 2.20% Fixed Rate Bonds due 2013 and JPY78,000,000,000 aggregate
principal amount of Floating Rate Bonds due 2013 (the “Bonds”), the proceeds of which will be used
to fund the acquisition of the Shares by NEH. NEH’s obligations with respect to the Notes will be
secured in favor of the holders of the Notes, inter alia, by a security assignment of NEH’s rights,
title and interest under this Agreement and a pledge, charge or other security interest over the
Shares.

     C. It is a condition to NEH’s agreement to directly acquire the Shares that Toshiba provide a
put option with respect to the Shares, on the terms and conditions set forth herein.

     NOW, THEREFORE, the Parties, in consideration of the foregoing premises and the terms,
covenants and conditions set forth below, hereby agree as follows:

AGREEMENT

1. DEFINITIONS; INTERPRETATION.

     1.1. Terms Defined in this Agreement. The following terms when used in this Agreement
shall have the following definitions:

     “Bankruptcy Law” means any Law of any jurisdiction relating to bankruptcy, insolvency,
corporate reorganization, company arrangement, civil rehabilitation, special liquidation,
moratorium, readjustment of debt, appointment of a conservator (hozen kanrinin), trustee
(kanzai nin), supervisor (kantoku i’in), inspector (chousa i’in), or receiver, or similar
debtor relief, including hasan under Hasan Ho (law No. 75, 2004 as amended), minji saisei
under Minji Saisei Ho (law No. 225, 1999 as amended), kaisha kousei under Kaisha Kousei Ho
(law No. 154, 2000 as amended), tokubetsu seisan under Kaisha Ho (law No. 86, 2005 as
amended) and tokutei choutei under Tokuteisaimuto no Chosei no Sokushin no tameno
Tokuteichoutei ni kansuru Houritsu (law No.158, 1999 as amended).

 

 

     “Business Day” means any day other than those that are bank holidays in Tokyo.

     “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.

     “Consolidated Net Worth” means, as of any date, total shareholders’ equity, being the
sum of stated capital, additional paid-in capital, legal reserves and retained earnings less
any treasury stock, which would appear on a consolidated balance sheet of Toshiba and its
consolidated Subsidiaries as of such date in accordance with US GAAP; provided that for the
purpose of calculating Consolidated Net Worth, the effect, if any, of all GAAP Statement of
Financial Accounting Standards No. 87 pension-related non-cash charge shall be excluded;

     “Debt-to-Equity Ratio” means ratio of total Financial Debt to Consolidated Net Worth.

     “Financial Debt” means every obligation for money borrowed or evidenced by notes,
bonds, debentures, security instruments and other similar instruments which incur interest
expense and which would, in accordance with US GAAP, be shown on a consolidated balance
sheet of Toshiba.

     “Government Authority” means any: (a) nation, principality, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign or other government; (c) governmental or quasi
governmental authority of any nature (including any governmental division, subdivision,
department, agency, bureau, branch, office, commission, council, board, instrumentality,
officer, official, representative, organization, unit, body or Person and any court or other
tribunal); or (d) individual, Person or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military or taxing
authority or power of any nature.

     “JPY” means Japanese Yen.

     “Law” means any federal, state, local, municipal, foreign or other law, statute,
legislation, constitution, principle of common law, resolution, ordinance, code, order,
edict, decree, proclamation, treaty, convention, rule, regulation, permit, ruling,
directive, pronouncement, requirement (licensing or otherwise), specification,
determination, decision, opinion or interpretation that is, has been or may in the future be
issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put
into effect by or under the authority of any Government Authority.

     “Person” means any individual, firm, company, corporation, limited liability company,
unincorporated association, partnership, trust, joint venture, governmental authority or
other entity, and shall include any successor (by merger or otherwise) of such entity.

     “Put Price” means, with respect to any exercise of the Put Option, the per Share price,
expressed in Japanese Yen, of any Share subject to any Put Exercise Notice (as defined in
Section 2.3). The Put Price:

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     (a) for each Share subject to the Put Exercise Notice up to and including
sixty-seven percent (67%) of the Shares shall be JPY119,425,926 per Share; and

     (b) for each Share subject to the Put Exercise Notice in excess of sixty-seven
percent (67%) of the Shares shall be the product of (x) JPY119,425,926 per Share
multiplied by (y) 0.90; provided that, in the event that a Put Exercise
Notice is delivered by NEH following the occurrence of a Toshiba Event, the number
in the foregoing clause (y) shall be 1.00.

     “Subsidiary” means a Person (other than an individual) (a) more than fifty percent
(50%) of whose outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, now or hereafter, owned or
controlled, directly or indirectly, by another Person; or (b) which does not have
outstanding shares or securities, as may be the case in a partnership, joint venture or
unincorporated association, but more than fifty percent (50%) of whose ownership interest
representing the right to make the decisions for such corporation, company or other entity
is, now or hereafter, owned or controlled, directly or indirectly, by another Person.

     “Toshiba Event” means any of the following:

     (a) Toshiba shall fail to have a minimum Consolidated Net Worth of
JPY800,000,000,000;

     (b) Toshiba’s Debt-to-Equity Ratio (determined quarterly based on Toshiba’s
consolidated quarterly financial statements) shall exceed 2.4 to 1.0;

     (c) Toshiba generally becomes unable to pay its debts as such debts become due
(shiharai funou), admits to a creditor its inability to pay its debts generally as
such debts become due (shiharai teishi) or makes a general assignment or settlement
for the benefit of creditors (nin’i seiri);

     (d) a petition (i) for the commencement of a proceeding against Toshiba under
any applicable Bankruptcy Law or similar law now or hereafter in effect, (ii) for
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (hozen kanrinin), trustee (kanzai nin), supervisor
(kantoku i’in), inspector (chousa i’in) or similar official of all or for any
substantial part of Toshiba’s property, or (iii) for the winding up or liquidation
of Toshiba’s affairs, is filed by any third party other than Toshiba;

     (e) Toshiba files a petition for the commencement of a proceeding under any
applicable Bankruptcy Law or similar law now or hereafter in effect, or consents to
or makes no objection against the filing of or the entry of an order for relief in
an involuntary proceeding under any such law, or applies for, consents to or
otherwise acquiesces in the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, sequestrator, conservator
(hozen kanrinin), trustee (kanzai nin), supervisor (kantoku i’in), inspector (chosa
i’in) or similar official of Toshiba of all or any substantial part of the property
thereof, or makes any general assignment or settlement for the benefit of the
creditors thereof;

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     (f) Toshiba’s assets, such as its bank accounts, are subject to the issuance of
an order or a notice of provisional attachment (kari sashiosae), temporary
attachment order (hozen sashiosae) or permanent attachment (sashiosae), and, with
respect to a provisional attachment and temporary attachment order only, such
attachment or order remains unstayed and in effect for a period of thirty (30)
consecutive days;

     (g) Toshiba ceases, or through an official action of its board of directors
threatens to cease, to carry on all or substantially all of its business;

     (h) the clearing house takes procedures for suspension of Toshiba’s
transactions with banks or other financial institutions (torihiki teishi shobun);

     (i) Toshiba has materially breached any of its covenants herein, and does not
cure such breach within 30 days after notice from NEH advising Toshiba of such
breach; or

     (j) the receipt by NEH of a notice of acceptance or any other similar notice
delivered by Toshiba or any Shareholder(s) (as defined in either Shareholders
Agreement (defined herein)) obligating Toshiba or such Shareholder(s) to purchase,
and obligating NEH to sell, all or any portion of (i) the Shares pursuant to, and in
accordance with, Section 7.06 of the Shareholders Agreement dated October 4, 2006,
among Toshiba, NEH, UK HoldCo, and its other shareholders (the “UK Shareholders
Agreement”), or (ii) the shares owned by NEH in Toshiba Nuclear Energy Holdings (US)
Inc., a Delaware corporation (“US HoldCo” and, together with UK HoldCo, the
“HoldCos”), pursuant to, and in accordance with, Section 7.06 of the Shareholders
Agreement dated October 4, 2006, among Toshiba, NEH, US HoldCo, and its other
shareholders (the “US Shareholders Agreement”; and, together with the UK
Shareholders Agreement, the “Shareholders Agreements”) (such notice, a “Call Option
Exercise Notice”).

     “US GAAP” means generally accepted accounting principles in the United States as in
effect on the date of application thereof.

1.2. Interpretation.

     (a) Certain Terms. The words “hereof,” “herein,” “hereunder” and similar words refer
to this Agreement as a whole and not to any particular provision of this Agreement. The term
“including” is not limited and means “including without limitation.”

     (b) Section References; Titles and Subtitles. Unless otherwise noted, all references
to Sections herein are to Sections of this Agreement. The titles, captions and
headings of this Agreement are inserted for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.

     (c) Reference to Entities, Agreements, Statutes. Unless otherwise expressly provided
herein, (i) references to a Person include its successors and permitted assigns, (ii) references to
agreements (including this Agreement) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements and other modifications thereto or supplements thereof and
(iii) references to any statute or regulation are to be

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construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such
statute or regulation.

2. PUT RIGHT.

     2.1. Put Right. NEH shall have the right and option to sell to Toshiba or its
permitted assignee, and upon the exercise of such right and option Toshiba or its permitted
assignee shall have the obligation to purchase from NEH, all of the Shares identified in the Put
Exercise Notice (as defined below) (the “Put Right”). NEH and Toshiba hereby agree that the Put
Right may be exercised by NEH on one occasion only.

     2.2. Put Period. The Put Right shall be exercisable by NEH by delivering a Put
Exercise Notice (defined below) at any time during the period (the “Exercise Period”) commencing on
(and including) the earlier of (i) March 31, 2010 and (ii) the occurrence of a Toshiba Event, and
ending on the earlier of (x) the date that is 30 days after receipt by NEH of the consolidated
financial statements (prepared in accordance with US GAAP) of the HoldCos for the period ending
September 30, 2012 and (y) February 28, 2013 (such earlier date, the “Exercise Period End Date”).
For the avoidance of doubt, if the Put Exercise Notice is not delivered on or before the Exercise
Period End Date, the Exercise Period shall automatically expire, and the Put Right shall thereafter
be of no further force or effect, at 11:59:59 p.m. on Exercise Period End Date. Once the Put Right
is exercised, NEH shall have no Put Right on the remaining Shares, if any.

     2.3. Exercise Process. In order to exercise the Put Right during the Exercise Period,
NEH shall deliver to Toshiba a written notice of such exercise substantially in the form attached
hereto as Appendix A (a “Put Exercise Notice”) to such address and marked for such
attention as is specified in Section 5.4. The Put Exercise Notice shall indicate the number of
Shares as to which NEH is then exercising its Put Right, the aggregate Put Price and the closing
date for the purchase (the “Put Closing Date”), which date shall be 90 days after the date on which
the Put Exercise Notice is first delivered by NEH to Toshiba; provided that, in the event that a
Toshiba Event (other than a Toshiba Event described in clause (j) of the definition thereof) has
occurred, such date shall be 30 days after the date on which the Put Exercise Notice is delivered
by NEH, in each case subject to Section 2.5. For the avoidance of doubt, the date of exercise of
the Put Right shall be earlier of (a) the date upon which Toshiba receives such Put Exercise Notice
and (b) two Business Days after NEH sends such Put Exercise Notice by internationally recognized
courier service subject to next-day or second-day delivery. Where the Put Closing Date would
otherwise fall on a day that is not a Business Day, the Put Closing Date shall be the next
following Business Day falling thereafter.

     2.4. Put Price. If the Put Right is exercised pursuant to this Section 2, as payment
for the Shares to be purchased by Toshiba pursuant to the Put Right, on the Put Closing Date
Toshiba shall pay the aggregate Put Price to NEH, or to the order of NEH, by electronic
transfer of immediately available funds to a financial institution and account number specified by
NEH to Toshiba as soon as practicable prior to the Put Closing Date.

     2.5. Sale of Shares.

          (a) Against payment of the Put Price by Toshiba, and as soon as practicable thereafter, NEH
shall sell and deliver to Toshiba (or

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its designee), and Toshiba (or its designee) shall receive
and purchase from NEH, the Shares as to which NEH is exercising the Put Right. In connection
therewith, NEH shall (i) deliver to Toshiba or its designee certificates representing the Shares
and a duly executed stock transfer form in respect thereof transferring the Shares to Toshiba (or
its designee), (ii) deliver to Toshiba (or its designee) evidence that NEH’s lenders have released
all liens or other security interests in or on such Shares and (iii) represent and warrant to
Toshiba that the Shares transferred pursuant thereto are transferred with full title guarantee free
from all liens, charges or encumbrances, but shall not be required to make any other
representations and warranties in respect of the relevant Shares. Other than as expressly provided
herein, there shall be no conditions upon NEH’s exercise of the Put Right or the purchase and sale
of the Shares subject thereto.

          (b) In the event that Toshiba is restricted, prohibited or disqualified from purchasing or
accepting all or any portion of the Shares from NEH under applicable law or regulation or any
agreement, instrument or other document to which Toshiba or its affiliates is a party, Toshiba may
assign its rights and obligations to purchase the Shares to an entity that is financially and
legally capable of purchasing and accepting delivery of the Shares for the aggregate Put Price;
provided that (i) the Put Closing Date shall be extended to the date (the “Extended Put Closing
Date”) that is the earlier of (x) 150 days after the Put Exercise Notice is first delivered by NEH
to Toshiba and (y) the date on which the requirements of the Hart-Scott-Rodino Antitrust
Improvements Act, the Exon-Florio Amendment (defined below) and any other applicable regulatory
requirements have been satisfied for the purpose of delivery of the Shares to Toshiba or such
entity, (ii) Toshiba shall ensure that such assignee has sufficient funds to purchase the Shares
and (iii) Toshiba shall remain obligated to pay the aggregate Put Price (together with all other
amounts due under this Agreement) to NEH in the event that such entity fails to perform such
assigned obligations on or before the Extended Put Closing Date. Notwithstanding the foregoing, in
the event that (A) the Put Closing Date is required to be extended pursuant to clause (i) in the
preceding sentence and (B) a Toshiba Event (other than a Toshiba Event described in clause (j) of
the definition thereof) has occurred, Toshiba shall (x) promptly, and in any event not later than
25 days after the receipt by Toshiba of the Put Exercise Notice, provide credit support for
Toshiba’s obligation in clause (iii) of the preceding sentence in form and substance reasonably
satisfactory to NEH and its lenders from a third party having a credit rating of A2 or higher from
Moody’s Investors Service Inc. or A or higher from Rating and Investment Information, Inc., which
credit support will provide that it may be drawn upon or exercised if Toshiba or such entity has
not performed its obligations in full on or before the Extended Put Closing Date, or (y) if Toshiba
fails or is unable to provide such credit support, pay the aggregate Put Price on the original Put
Closing Date. In the event that Toshiba has paid the Put Price under this Section 2.5(b) prior to
the delivery by NEH of all or any portion of the Shares to Toshiba or its designee, NEH shall hold
such Shares (and any proceeds thereof (other than the Put Price)) in
trust for and on behalf of, and to the order of, Toshiba and, subject to applicable law, shall
take such actions in respect of the Shares as Toshiba shall direct.

     2.6. Recapitalizations; Reorganizations. In the event of any stock dividend, split,
reverse split, combination or recapitalization (each, a “Recapitalization”), (a) the term “Shares”
shall automatically be deemed to include all securities issued in exchange for or in connection
with the Shares outstanding immediately prior to such Recapitalization, and (b) the Put Price shall
be multiplied by a ratio, (i) the numerator of which is the number of Shares of UK HoldCo
outstanding immediately prior to the Recapitalization and (ii) the denominator of which is the
number of Shares of UK HoldCo outstanding immediately after to the Recapitalization. In the event
of any liquidation, reclassification, merger or

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consolidation (each, a “Reorganization”), (a) the term “Shares” shall automatically be amended to refer to all securities issued or assets
distributed in connection with such Reorganization in exchange for the Shares outstanding
immediately prior to such Reorganization and (b) the Put Price shall automatically be adjusted to
preserve the economic status quo between the parties immediately prior to such Reorganization;
provided that, in the event of a liquidation in which no securities or other assets are
distributed, Toshiba acknowledges and agrees that it shall remain obligated to pay the aggregate
Put Price in accordance with the terms of this Agreement based upon the total number of Shares held
by NEH immediately prior to such liquidation and NEH shall, upon commencement of the Exercise
Period, be entitled to exercise a Put Exercise Notice in respect thereof.

     2.7. Dividends. For the avoidance of doubt, with respect to any Shares sold by NEH to
Toshiba (or its designee) upon exercise of the Put Right in accordance with the terms hereof, as
between NEH and Toshiba (or its designee), NEH shall be entitled to any and all dividends,
distributions or similar items that are resolved or declared to be paid or made by the UK HoldCo by
reference to a record date that is prior to the date of the Put Closing Date, and Toshiba (or its
designee) shall be entitled to any and all dividends, distributions or similar items that are
resolved or declared to be paid or made by UK HoldCo by reference to a record date that is on or
after the date of the Put Closing Date.

     2.8. Related Matters. Nothing in this Agreement shall be construed as imposing any
obligations on NEH either to exercise or to refrain from exercising any rights or powers conferred
on it by or deriving from the Shares.

     2.9. Superiority of Put Right. Toshiba acknowledges and agrees that (i) the call
rights set forth in Section 7.06 of the UK Shareholders Agreement with respect to the Shares
designated in the Put Exercise Notice are subordinate in right to the Put Right (when exercised),
and (ii) the delivery by NEH (or its designee) of a Put Exercise Notice, whether or not a Call
Option Exercise Notice has been delivered by Toshiba, shall obligate Toshiba to purchase the Shares
described in such Put Exercise Notice on the terms, and subject to the conditions, set forth in
this Agreement notwithstanding any other rights or obligations in respect of such Shares under the
Shareholders Agreement or any other similar document.

     2.10. Time. Any reference to time in this Agreement should be Tokyo time.

     2.11. Additional Covenants. Toshiba agrees that it will fully comply with the Special
Security Agreement between Toshiba and the U.S. Department of Energy. Toshiba also agrees that
until (a) if a Put Exercise Notice has been delivered by NEH, the Put Closing Date, and (b)
otherwise, the Exercise Period End Date, it shall not, and shall cause the
HoldCos and their respective Subsidiaries and affiliates and any holding company of the
HoldCos not to commit or fail to commit any act that would prevent or disqualify Toshiba from
purchasing, or make it illegal for Toshiba to purchase, the Shares under applicable law, or cause
the purchase of the Shares by Toshiba to be set aside under Section 721 of the U.S. Defense
Production Act of 1950, 50 U.S.C. App. 2171, as amended (the “Exon-Florio Amendment”), or any
similar law of any other applicable jurisdiction.

     2.12. Toshiba Event Notification. Toshiba agrees that upon the occurrence of a
Toshiba Event, Toshiba shall immediately, but in any event no later than five (5) Business Days
after the occurrence of such Toshiba Event, notify NEH thereof.

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3. RANKING, PAYMENTS AND SET-OFF.

     3.1. Ranking. The payment obligations of Toshiba under this Agreement shall, save for
such exceptions as may be provided Bankruptcy Laws, at all times rank pari passu with all of
Toshiba’s other present and future unsecured and unsubordinated obligations.

     3.2. Withholding. All payments made by or on behalf of Toshiba under this Agreement
shall be made free and clear of, and without withholding or deduction for, any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by or within Japan or any authority therein or thereof having power to tax, unless such
withholding or deduction is required by law. If such withholding or deduction is required by law,
Toshiba shall pay such additional amounts as will result in receipt by NEH of such amounts as would
have been received by NEH had no such withholding or deduction been required.

     3.3. Set-off. Subject to Section 2.5, (a) NEH shall be absolutely entitled to receive
all amounts payable in respect of this Agreement, and (b) for the purposes of this Agreement,
Toshiba hereby waives, as against NEH, all rights of set-off or counterclaim that would or might
otherwise be available to Toshiba.

4. REPRESENTATIONS AND WARRANTIES.

     4.1. Toshiba. Toshiba represents and warrants to NEH, as of the Effective Date, that:

     (a) Due Authorization. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder to be carried out by it have been
duly authorized by all necessary corporate action on the part of Toshiba. This Agreement,
and all agreements and documents executed and delivered pursuant to this Agreement,
constitute valid and binding obligations of Toshiba, enforceable against Toshiba in
accordance with its terms, subject to applicable Bankruptcy Laws and other laws or equitable
principles of general application affecting the rights of creditors generally.

     (b) No Conflicts. Neither the acquisition of the shares in the capital of UK
HoldCo by NEH (the “Share Acquisition”) nor the execution or delivery of this Agreement by
Toshiba nor the fulfillment or compliance by Toshiba with any of the terms hereof shall,
with or without the giving of notice and/or the passage of time, (i) conflict with, or
result in a breach of the terms, conditions or provisions of, or
constitute a default under, (A) the organizational or charter documents of Toshiba or
UK HoldCo or (B) any contract or any judgment, decree or order to which Toshiba or UK HoldCo
is subject or by which Toshiba or UK HoldCo is bound, or (ii) require any consent, license,
permit, authorization, approval or other action by any Person or Government Authority which
has not yet been obtained or received including any such consent, license, permit,
authorization, approval or other action required under the Exon-Florio Amendment. Neither
the Share Acquisition nor the execution, delivery and performance of this Agreement by
Toshiba or compliance with the provisions hereof by Toshiba shall violate any provision of
any Law to which Toshiba or UK HoldCo is subject or by which it is bound.

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     (c) No Actions. There are no lawsuits, actions (or to the best knowledge of
Toshiba, investigations), claims or demands or other proceedings pending or, to the best of
the knowledge of Toshiba, threatened against Toshiba or any of its Subsidiaries which, if
resolved in a manner adverse to Toshiba or such Subsidiaries, would adversely affect the
right or ability of Toshiba to carry out its obligations set forth in this Agreement.

     (d) Toshiba Event. As of the Effective Date, there is no Toshiba Event nor are
there any events, circumstances or conditions that could reasonably be expected to lead to a
Toshiba Event.

     4.2. NEH. NEH represents and warrants to Toshiba, as of the Effective Date, that:

     (a) Due Authorization. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder to be carried out by it have been
duly authorized by all necessary corporate action on the part of NEH. This Agreement, and
all agreements and documents executed and delivered pursuant to this Agreement, constitute
valid and binding obligations of NEH, enforceable against NEH in accordance with its terms,
subject to applicable Bankruptcy Laws and other laws or equitable principles of general
application affecting the rights of creditors generally.

     (b) No Conflicts. Neither the execution or delivery of this Agreement by NEH
nor the fulfillment or compliance by NEH with any of the terms hereof shall, with or without
the giving of notice and/or the passage of time, (i) conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under, (A) the
organizational or charter documents of NEH or (B) any contract or any judgment, decree or
order to which NEH is subject or by which it is bound, or (ii) require any consent, license,
permit, authorization, approval or other action by any Person or Government Authority which
has not yet been obtained or received. The execution, delivery and performance of this
Agreement by NEH and compliance with the provisions hereof by NEH shall not violate any
provision of any Law to which NEH is subject or by which it is bound.

     (c) No Actions. There are no lawsuits, actions (or to the best knowledge of
NEH, investigations), claims or demands or other proceedings pending or, to the best of the
knowledge of NEH, threatened against NEH or any of its Subsidiaries which, if resolved in a
manner adverse to NEH or such Subsidiaries, would adversely
affect the right or ability of NEH to carry out its obligations set forth in this
Agreement.

5. MISCELLANEOUS.

     5.1. Governing Law. This Agreement, as to which time is of the essence, shall be
construed according to, and the rights of the Parties shall be governed by, the laws of the State
of New York, without reference to any conflict of laws principle that would cause the application
of the laws of any jurisdiction other than the State of New York. In the event of any dispute
between the Parties arising out of or in connection with this Agreement, the Parties shall use good
faith efforts to resolve such dispute amicably. If the Parties cannot resolve such dispute
amicably within sixty (60) days, such dispute shall be finally settled by

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arbitration in London, England in accordance with the Rules of Arbitration of the International Chamber of Commerce
(“ICC”) by three arbitrators. One arbitrator shall be appointed by Toshiba, one arbitrator shall
be appointed by NEH and the third arbitrator, who shall serve as the Chair of the tribunal, shall
be selected by the first two. If the third arbitrator is not chosen and nominated to the ICC for
appointment within 30 days of the date of confirmation by the ICC of the latter of the two
party-appointed arbitrators to be confirmed, such arbitrator shall be chosen by the ICC. Any award
rendered thereby shall be final and binding on the Parties and fully enforceable. The award may
include an award of costs, including reasonable attorneys’ fees and disbursements.

     5.2. Successors and Assigns. NEH shall have the right to assign, transfer, delegate,
pledge or grant a security interest in any of its rights hereunder without the consent of Toshiba,
(i) to any wholly-owned Subsidiary through which it holds any Shares and which shall become a party
to the Shareholders Agreement, and/or (ii) to any lender or financing party or group of lenders or
financing parties in connection with any financing provided by such lender(s) to NEH for the
purpose of acquiring the Shares, provided, however, that such lender or financing party shall not
be a Competitor of Toshiba. Toshiba shall have the right to assign this Agreement to its wholly
owned Subsidiary or pursuant to Section 2.5, provided that Toshiba shall not be released of its
obligations hereunder. Subject to the foregoing, the rights and obligations hereunder may not be
assigned or delegated by either Party without the other’s prior written consent. The provisions
hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of
the Parties.

     5.3. Entire Agreement; Amendment. This Agreement constitutes the full and entire
understanding and agreement between the Parties with regard to the subject matter hereof. Any term
of this Agreement may be amended only with the written consent of each Party.

     5.4. Notices and Other Communications. Any and all notices, requests, demands and
other communications required or otherwise contemplated to be made under this Agreement shall be in
writing and in English and shall be provided by one or more of the following means and shall be
deemed to have been duly given (a) if delivered personally, when received, (b) if transmitted by
facsimile, on the date of transmission with receipt of a transmittal confirmation, or (c) if by a
nationally or internationally recognized courier service, on the third (3rd) day following the date
of deposit with such courier service, or such earlier delivery date as may be confirmed in writing
to the sender by such courier service. All such notices, requests, demands and other
communications shall be addressed as follows:

To NEH at:

4171 Essen Lane

Baton Rouge, Louisiana 70809

Attention: Secretary and General Counsel

Facsimile: + 1-225-925-9146

with a copy to:

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

10

 

Houston, Texas 77002

Attention: Clifton S. Rankin, Partner

Facsimile: +1-713-615-5162

To Toshiba at:

Toshiba Building 31B

1-1, Shibaura, 1 Chome, Minato-ku, Tokyo 105-8001, Japan

Attention: General Manager, Legal Affairs Department, Power Systems Company

Telephone: +81-3-3457-3706

Facsimile: +81-3-5444-9183

or to such other address or facsimile number as a Party may have specified to the other Party in
writing delivered in accordance with this Section 5.4.

     5.5. Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any Person hereunder, upon any breach or default under this Agreement, shall impair any
such right, power or remedy nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Person hereunder of any breach or default under this Agreement, or any
waiver on the part of any Person of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such writing and signed
by the waiving or consenting Person.

     5.6. Severability. If any provision of this Agreement is found to be invalid or
unenforceable, then such provision shall be construed, to the extent feasible, so as to render the
provision enforceable and to provide for the consummation of the transactions contemplated hereby
on substantially the same terms as originally set forth herein, and if no feasible interpretation
would save such provision, it shall be severed from the remainder of this Agreement, which shall
remain in full force and effect unless the severed provision is essential to the rights or benefits
intended by the Parties. In such event, the Parties shall use
best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or
agreement which most nearly effects the Parties’ intent in entering into this Agreement.

     5.7. Further Assurances. The Parties shall perform such acts, execute and deliver
such instruments and documents and do all other such things as may be reasonably necessary to
effect the transactions contemplated hereby, including in the case of Toshiba causing the UK HoldCo
to perform such acts, execute and deliver such instruments and documents and do all other such
things as may be reasonably necessary to effect the transactions contemplated hereby.

     5.8. Costs and Expenses. The Parties shall each bear their own legal and other costs
and out-of-pocket expenses arising out of the negotiation, preparation and execution of, and
consummation of the transactions contemplated by, this Agreement.

11

 

     5.9. Tax. Subject to Section 3.2, Shaw acknowledges and agrees that Toshiba shall not
be responsible for any tax that might be imposed on Shaw in connection with the grant by Toshiba of
the Put Right to Shaw or the exercise by Shaw of the Put Right under this Agreement.

     5.10. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute one instrument.
Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile
signature of a Party shall constitute a valid and binding execution and delivery of this Agreement
by such Party.

     5.11. Limited Recourse to NEH.

          (a) Notwithstanding any other provision of this Agreement, the obligations of NEH hereunder
are limited recourse obligations of NEH, 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 NEH or any of their respective successors and assigns in respect
to the obligations of NEH hereunder or arising in connection herewith.

          (b) Toshiba agrees not to institute against, or join any other Person in instituting against,
NEH 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 5.12:

“Secured Obligations” means all amounts owed by NEH to the secured parties under and in connection
with the Bonds.

[Remainder of page intentionally blank.]

12

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

	 	 	 	 	 
	 	TOSHIBA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Masao Niwano 	 
	 	 	Title:  	Director, Corporate Executive Vice
President 	 
	 
	 	NUCLEAR ENERGY HOLDINGS, L.L.C.

 	 
	 	By:  	 	 
	 	 	Name:  	Gary P. Graphia 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

Signature
Page to Put Option Agreement

 

APPENDIX A

Form of Exercise Notice

[Date]

Toshiba Corporation

Toshiba Building 31B

1-1, Shibaura, 1 Chome, Minato-ku, Tokyo 105-8001, Japan

			
	Attn:	 	General Manager, Legal Affairs Department,
Power Systems Company

			
	Re:	 	Put Option Agreement dated [__] September
2006 (the “Put Option Agreement”), between
Nuclear Energy Holdings, L.L.C. (“NEH”) and
Toshiba Corporation (“Toshiba”). Capitalized
terms used but not otherwise defined herein
shall have the respective meanings assigned
to such terms in the Put Option Agreement.

Dear Sir:

In accordance with Section 2.3 of the Put Option Agreement, NEH hereby provides this notice (this
“Put Exercise Notice”) of exercise of the Put Right in the manner specified below:

	 	A.	 	Shares as to which NEH is exercising the Put Right:

	 	1.	 	[___] UK HoldCo Shares.

	 	B.	 	Aggregate Put Price: JPY[                    ] [; provided that, in the event that a Toshiba
Event occurs after the date of this Put Exercise Notice but before the Put Closing Date
designated below, the Aggregate Put Price shall be JPY[                    ] 1
	 
	 	C.	 	Put Closing Date: [                    ] [; provided that, in the event that a Toshiba
Event (other than receipt of a Call Option Exercise Notice) occurs after the date of this
Put Exercise Notice but before such designated Put Closing Date, the Put Closing Date shall
be the earlier to occur of such designated Put Closing Date and the date that is 30 days
after the occurrence of such Toshiba Event].2

	 	 	 	 	 	 	 
	 	 	Best regards,	 	 
	 
	 	 	 	 	 	 
	 	 	NUCLEAR ENERGY HOLDINGS, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

 

			
	1	 	Note: Bracketed language to be included in
the event of an exercise of the Put Right that is not initiated by the
occurrence of a Toshiba Event consistent with the definition of “Put
Price” in the Put Option Agreement.
	 
	2	 	Note: Bracketed language to be included in
the event of an exercise of the Put Right that is not initiated by the
occurrence of a Toshiba Event consistent with Section 2.3 of the Put Option
Agreement.exv10w4

 

EXHIBIT
10.4

SHAREHOLDERS AGREEMENT

dated as of

October 4, 2006

by and among

TOSHIBA CORPORATION

TSB NUCLEAR ENERGY INVESTMENT US INC.,

NUCLEAR ENERGY HOLDINGS, L.L.C.,

ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD.

and

TOSHIBA NUCLEAR ENERGY HOLDINGS (US) INC.

 

 

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
	 	 	7	 
	SECTION 2.02 Purpose and Scope of the Company
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 3

	 
	 	 	 	 
	Corporate Governance; Management

	 
	 	 	 	 
	SECTION 3.01 The Board
	 	 	7	 
	SECTION 3.02 The Owner Board
	 	 	9	 
	SECTION 3.03 Principal Officers
	 	 	12	 
	SECTION 3.04 Organizational Documents
	 	 	13	 
	SECTION 3.05 Shareholder Actions
	 	 	13	 
	SECTION 3.06 Dividend Policy
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 4

	 
	 	 	 	 
	Certain Operational Matters

	 
	 	 	 	 
	SECTION 4.01 Acquisition of Westinghouse Group
	 	 	15	 
	SECTION 4.02 Repayment of Loans
	 	 	16	 
	SECTION 4.03 Annual Budget and Business Plan
	 	 	16	 
	SECTION 4.04 Shareholder Support of the Westinghouse Group Business
	 	 	16	 
	SECTION 4.05 Personnel Matters
	 	 	17	 
	SECTION 4.06 Coordination Office
	 	 	18	 
	 
	 	 	 	 
	i

 

 

	 	 	 	 	 
	 	 	PAGE	 
	ARTICLE 5

	 
	 	 	 	 
	Certain Agreements among the Company and the Shareholders

	 
	 	 	 	 
	SECTION 5.01 Confidentiality
	 	 	18	 
	SECTION 5.02 Access
	 	 	20	 
	SECTION 5.03 Financial Statements
	 	 	20	 
	SECTION 5.04 Public Announcements
	 	 	21	 
	SECTION 5.05 No Inconsistent Actions
	 	 	21	 
	SECTION 5.06 No Apparent Authority
	 	 	22	 
	SECTION 5.07 Undertaking by Shaw Sub
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 6

	 
	 	 	 	 
	Representations and Warranties
	 
	 	 	 	 
	SECTION 6.01 Organization
	 	 	22	 
	SECTION 6.02 Authorization, Validity and Enforceability of This Agreement
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 7

	 
	 	 	 	 
	Transfer of Shares

	 
	 	 	 	 
	SECTION 7.01 General Restrictions
	 	 	23	 
	SECTION 7.02 Permissible Transfers
	 	 	23	 
	SECTION 7.03 Legend on Share Certificates
	 	 	24	 
	SECTION 7.04 Rights of First Offer
	 	 	24	 
	SECTION 7.05 Tag-Along Rights
	 	 	25	 
	SECTION 7.06 Call Rights
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 8

	 
	 	 	 	 
	Arbitration

	 
	 	 	 	 
	SECTION 8.01 Arbitration
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 9

	 
	 	 	 	 
	Liquidation

	 
	 	 	 	 
	SECTION 9.01 Liquidation Events
	 	 	29	 
	SECTION 9.02 Liquidation Procedures
	 	 	29	 
	 
	 	 	 	 
	ii

 

 

	 	 	 	 	 
	 	 	PAGE	 
	ARTICLE 10

	 
	 	 	 	 
	Miscellaneous

	 
	 	 	 	 
	SECTION 10.01 Amendments; Waivers; Termination
	 	 	30	 
	SECTION 10.02 Expenses
	 	 	30	 
	SECTION 10.03 Notices
	 	 	31	 
	SECTION 10.04 Governing Law; Severability
	 	 	32	 
	SECTION 10.05 Counterparts
	 	 	33	 
	SECTION 10.06 Entire Agreement
	 	 	33	 
	SECTION 10.07 Effectiveness
	 	 	33	 
	SECTION 10.08 Binding Effect; Benefit
	 	 	33	 
	SECTION 10.09 Assignability
	 	 	33	 
	SECTION 10.10 Headings
	 	 	34	 
	SECTION 10.11 Survival
	 	 	34	 
	SECTION 10.12 Further Assurances
	 	 	34	 
	SECTION 10.13 No Third-Party Beneficiaries
	 	 	34	 
	SECTION 10.14 Specific Performance
	 	 	35	 
	SECTION 10.15 Preemptive Rights
	 	 	35	 
	 
	 	 	 	 
	iii

 

 

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 US Inc., a Delaware corporation
and a wholly owned Subsidiary (as defined below) of Toshiba (“Toshiba US”), 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
(US) Inc., a Delaware corporation (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 Subsidiaries, the “Westinghouse Group”); and

     WHEREAS, Toshiba plans to cause the Company to acquire all of the issued and outstanding
shares of BNFL USA Group Inc. and to cause Toshiba Nuclear Energy Holdings (UK) Limited (“UK
Acquisition Co.”) to acquire all of the issued and outstanding shares of Westinghouse Electric UK
Limited, respectively; and

     WHEREAS, Toshiba has entered into an Agreement Regarding Participation in 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 UK 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 UK Acquisition Co. (the “UK 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
US will own 1,040 shares (approximately 53%) of the Class A Stock of the Company,

 

 

par value $0.01 per share (the “Class A Shares”), and 2,040 shares (100%) of the Class B Stock
of the Company, par value $0.01 per share (the “Class B Shares” and, together with the Class A
Shares, the “ Shares”) which will represent 77% of the aggregate number of the Shares then
outstanding; (ii) Shaw Sub will own 800 shares (approximately 41%) of the Class A Shares which will
represent 20% of the aggregate number of the Shares then outstanding; and (iii) IHI will own 120
shares (approximately 6%) of the Class A Shares which will represent 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:

     “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.

2

 

     “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).

     “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).

3

 

     “DGCL” means the General Corporation Law of the State of Delaware, as the same may be amended,
modified or supplemented from time to time.

     “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).

     “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 Certificate of Incorporation and By-laws
of the Company in effect on the Closing Date, as each may be amended, modified or supplemented from
time to time in accordance with the terms thereof.

     “Owner Board” has the meaning set forth in Section 3.02(a).

4

 

     “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 US, 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
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(b), 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 UK Acquisition Co. for the period ending
September 30, 2012.

     “Secretary” has the meaning set forth in Section 3.03(a).

5

 

     “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).

     “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 US” 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).

6

 

     “Treasurer” has the meaning set forth in Section 3.03(a).

     “UK Acquisition Co.” has the meaning set forth in the recitals.

     “UK 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 US 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 UK 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.

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 the DGCL 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 be exercised by or under the direction of the President.

7

 

     (b) The initial Board shall consist of three members, two of whom shall be nominated by
Toshiba US, 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 Toshiba US may provide such a
Person with the right to nominate one Director and the total number of the Directors shall increase
by such number; provided, however, that Toshiba US shall have the right to nominate
such a number of the Directors as represent at least a majority of the member of the Board so long
as Toshiba US’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 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 special 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 UK 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 special
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 special 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 US shall be the President. A majority of
the members of the Board then in office, provided such number includes at least one Director
nominated by Toshiba US, 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

8

 

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 US who actually attend the meeting would collectively have 77 votes in the aggregate. As
for Toshiba US 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.

     (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.

     (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.

          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 DGCL, have the following functions and responsibilities:

     (i) To advise as to the administration and supervision of matters regarding the
Westinghouse Group;

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     (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
US) shall be entitled to appoint one Owner Board Member (who needs not be a Director) by notifying
the Board in writing, and the President (as nominated by Toshiba US 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 US, in which case
the Owner Board Member appointed by Toshiba US shall still be entitled to exercise his votes.
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 US, 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 and hour of the meeting
shall be given not less than five (5) business days before the date of the meeting.

     (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 equal to the percentage

10

 

ownership of the stockholder which appointed such person as an 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 US 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 of the Westinghouse Group;

     (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

11

 

     (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.

     (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 US 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 (the “President”) who, as provided in Section
3.01(a), shall, to the extent permitted by the DGCL, manage the business and affairs of and
exercise the corporate powers 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
corporation. In addition to the President, there shall be a treasurer of the Company (the
"Treasurer”) 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 corporation.

12

 

     (b) Toshiba US shall be entitled to nominate the Principal Officers after consulting with
other Shareholders, and each Shareholder agrees that it (i) will cause the Directors nominated by
it to vote for the appointment of such nominees and (ii) will not, and will cause the Directors
nominated by it not to, vote, or grant any consents with respect to, any of its Shares in favor of
the removal of any Principal Officer unless Toshiba US shall have consented to such removal in
writing. Each Shareholder agrees to, and will cause the Directors nominated by it to, cause to be
called, if necessary, a special 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 Principal
Officer if Toshiba US requests in a writing, signed by Toshiba US, such Principal Officer’s removal
for any reason. If, as a result of death, disability, retirement, resignation, removal or
otherwise, the office of any Principal Officer shall be vacant, Toshiba US shall within 30 days of
such event notify the Board in writing of a replacement, and upon such nomination (whether before
or after such 30-day period) all Shareholders shall, and shall cause the Directors nominated by it
to, promptly take all actions necessary to ensure the appointment of such replacement, if
necessary, calling a special meeting of Shareholders and voting their Shares thereat, or executing
any written consent in lieu thereof, in favor of the appointment of such nominee.

     (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 DGCL.

          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 special 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.

13

 

     (b) Notwithstanding the provisions of Section 3.05(a) above, the holders of Shares may take
action by resolution in writing (in one or more counterparts) signed by the holders of a number of
Shares necessary to adopt such resolution, which resolution shall be as valid and effective as if
the same had been passed at a general meeting of the Company duly convened and held in accordance
with Section 228 of the DGCL.

     (c) 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.

     (d) 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.

     (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 UK 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 Certificate of Incorporation of
the Company) and B Accrual (as defined in the Certificate of Incorporation of the Company) will
exist after distributions for such fiscal year are made. The relative preferences of the Class A
Stock and the Class B Stock 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 US or any successor owner of Shares owned by Toshiba US) to the extent the UK
Acquisition Co. does not pay dividends in accordance with its dividend

14

 

policy with respect to Class A Shares of the UK Acquisition Co. and (ii) to reduce the amount
to be paid in dividends to the holders of Class A Shares (except Toshiba US or any successor owner
of Shares owned by Toshiba US) to the extent the UK Acquisition Co. pays dividends in excess of its
policy with respect to Class A Shares of the UK 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 Certificate of Incorporation of the Company) under Article IV, B.3.(c) of the Certificate of
Incorporation 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

     (a) The Shareholders agree that the Company will acquire all the issued and outstanding shares
of BNFL USA Group Inc. 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).

15

 

     (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. Expenses (including administration fees) incurred by Toshiba
relating to the performance of the Company’s obligations under the PSA shall be reimbursed by the
Westinghouse Group.

          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 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
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

16

 

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

     (a) 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.

     (b) All Principal Officers and senior vice presidents of WEC shall be nominated by the WEC
Board of Directors based on the designation by the President of the Company. The President of the
Company will notify to the other Shareholders its designations in advance.

     (c) At the PSA Closing the board of directors of WEC will be composed of seven (7) directors
and shall be nominated by the sole member of WEC in accordance with the designation by the board of
directors resolution of the Company.

17

 

          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 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. The number of staff to be sent from each Shareholder and employment
conditions shall be determined by Toshiba US after consultation with the other Shareholders,
provided, however, that each Shareholder may send at least one staff to the Coordination Office

ARTICLE 5

CERTAIN AGREEMENTS AMONG THE COMPANY AND THE SHAREHOLDERS

          SECTION 5.01 Confidentiality

     (a) Each Shareholder other than Toshiba US 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 disclosure to

18

 

any such Authorized Representative or finance party, each Shareholder other than Toshiba US
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, Authorized Representative or 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 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 US 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, 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 governmental authority, 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, (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.

19

 

     (c) The provisions of Section 5.01 (a) and (b) above shall apply mutatis mutandis to Toshiba
US if the Confidential Information of Shareholders other than Toshiba US 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 the Westinghouse Group with the officers of the Company and
the Westinghouse Group. The Company shall not be required to maintain any books and 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 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. 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

20

 

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 US.

     (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 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

21

 

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 UK 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

     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.

22

 

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 US) or of Toshiba US (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) All Transfers of Shares, including, without limitation, Transfers by encumbrance of
Shares, shall be recorded in the shareholder’s ledger of the Company.

     (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

     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) 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 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.

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     (b) Notwithstanding the restrictions on Transfer set forth in this Article 7, for so long as
Toshiba US’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), 7.01(d) and
7.01(e). For so long as Shaw Sub’s Ownership Percentage exceeds fifteen percent (15%), Toshiba US
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, however, that Toshiba US 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 HAVE NOT BEEN REGISTERED
UNDER APPLICABLE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. SUCH SHARES ARE ALSO SUBJECT TO
ADDITIONAL 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 set forth 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
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

24

 

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 US) fails to accept the First Offer,
then Toshiba US 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 Section 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 US 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 US 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 US 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

25

 

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 US, all of the Shares from the Tagging Shareholders at 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 US 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 US (the “Tag-Along Exercise
Notice”). In the event such third party purchaser shall modify the Tag-Along Offer in any way,
Toshiba US 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 US is or becomes (or there are
reasonable grounds for believing any Shareholder other than Toshiba US 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

26

 

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.

     (b) In the event that Control of any Shareholder (in case of Shaw Sub, including Control of
Shaw) other than Toshiba US 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 US has not consented to such change in Control (which consent will not
be unreasonably withheld in the case of acquisition by any Person other than a Competitor) (a “CIC
Event”), Toshiba US 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 US 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 US may also exercise the right
before the determination of the Company Value pursuant to Section 7.06(c), and if so Toshiba US may
cancel the exercise within thirty (30) days after such determination. As promptly as practicable
after Toshiba US’s exercise of such right (or if Toshiba US exercises such right before such
determination of Company Value, after such determination), Toshiba US and the CIC Shareholder shall
enter into a customary purchase agreement for the purchase of such Shares. The CIC Shareholders
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, CIC Shareholder may not disclose any Confidential Information of the Company,
the Westinghouse Group, and other Shareholders and 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 US and its Affiliates at the time of the Insolvency Event or CIC Event (i.e.,
initially Shareholders holding seventy-eight

27

 

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.

     (e) In no event shall a holder of the Class A Shares have any obligation to sell any Class A
Shares under this Section 7.06 unless all of its Class A Shares are purchased hereunder and all of
such Shareholder’s (or its Affiliates’) Shares of the UK 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

28

 

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 US 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.

     (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 Company shall commence the winding up and liquidation of its business 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

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     (a) Any work in progress or continuing engagement of the Company at the time of the occurrence
of any Liquidation Event shall be continued thereafter in an orderly fashion consistent with the
winding up of the Company and to the extent practicable shall be conducted thereafter by the
Shareholders outside of the Company.

     (b) The proceeds of the liquidation of the Company shall be distributed to the holders of the
Shares in compliance with the provisions and preferences set forth in the Certificate of
Incorporation of the Company.

     (c) Upon the occurrence of a Liquidation Event, the Principal Officers 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.

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 US 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 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 capital stock of the Company and such Shareholders shall no longer be party to this Agreement.

          SECTION 10.02 Expenses

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     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 US 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:

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

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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 not 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
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

32

 

any term or provision so as to make it enforceable or valid within the requirements of New
York 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

33

 

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 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 Certificate of Incorporation 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.

34

 

          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

     (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 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

35

 

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 10.16:

"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.

36

 

     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 ENGERGY INVESTMENT US INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Shigenori Shiga
	 	 
	 

	 	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	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 (US) INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Shigenori Shiga
	 	 
	 

	 	 	 	Title: President	 	 

 

 

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

 

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

B-1

 

			
	 	 	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.

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

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