ML16190A173

Pillsbury, Winthrop, Shaw, Pittman, Llp, Response to Request for Additional Information Application for a Change in Method of Providing Financial Protection

ML16190A173
Person / Time
Site:	Aerotest
Issue date:	06/15/2016
From:	Silberg J Aerotest, Pillsbury, Winthrop, Shaw, Pittman, LLP
To:	Document Control Desk, NRC Region 1
Shared Package
ML16190A199	List: ML16190A173
References
TAC MF6254
Download: ML16190A173 (32)

Text

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Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street NW I Washington, DC 20036-3006 I tel 202.663.8000 I fax 202.663.8007 Jay E. Silberg tel: 202.663.8063 jay.silberg@pillsburylaw.com June 15, 2016 ATTENTION: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 205550-0001 AEROTEST RADIOGRAPHY AND RESEARCH REACTOR DOCKET NO. 50-228/LICE SE 0. R-98 RESPONSE TO REQUEST FOR ADDITIONAL INFORMATION RE:

APPLICATION FOR A CHANGE IN METHOD OF PROVIDING FINANCIAL PROTECTION (TAC NO. MF6254)

Ladies and Gentlemen:

In its January 20, 2016 letter, the NRC requested the Aerotest Operations, Inc.

provide additional information with regard to its May 6, 2015 request that it be permitted to change the method of providing financial protection for the Aerotest Research and Radiography Reactor, Facility Operating License No. R-98. Pursuant to discussions between the licensee and Mr. Edward Helvenston, we are enclosing herewith the following documents in support of the request.

1. Consolidated Financial Statements, Autoliv ASP, Inc. ("Autoliv") for the years ending December 31, 2015 and 2014 (proprietary)

2. Draft Parent Company Guarantee Agreement

3. Draft Standby Trust Agreement

4. Draft Chief Executive Officer letter

5. Draft Chief Financial Officer letter, including parent company guarantee financial test (contains proprietary information)

6. Draft Chief Financial Officer letter (redacted)

7. Draft confirmation of Chief Financial Officer's letter 40 l. D www.pillsburylaw.con1 4836-3213-5474.vl

I June 15, 2016 Page 2

8. Draft Supplemental Agreement between Trustee and Autoliv

9. Affidavit of Anthony Nellis, Vice President and General Counsel of Autoliv regarding proprietary treatment for financial information in Consolidated Financial Statements and draft Chief Financial Officer letter.

We would appreciate the opportunity to review the draft documents with you before we finalize them so that we can make sure that they meet the NRC ' s requirements to support the parent company guarantee.

Sincerely yours,

(\ j~J "i1 I .

Ja . ,$ilberg Counsel for Aerotest Operations, Inc.

Enclosures:

cc: NRC, NRR (Helvenston)

NRC, NRR (Traiforos)

NRC, OGC (Ghosh) www.pillsburylaw.com 4836-3213 -5474 .v l

./

PARENT COMPANY GUARANTEE Guarantee made this [insert date] by Autoliv ASP, Inc., a corporation organized under the laws of the State of Indiana, herein referred to as "guarantor," to the U.S. Nuclear Regulatory Commission (NRC), beneficiary, on behalf of our subsidiary Aero test Operations, Inc., of 345 5 Fostoria Way, San Ramon, CA 94583.

Recitals

1. The guarantor ha 11 authority and capacity to enter into this guarantee under its bylaws, *cl es of incorporation, and the laws of the State of Indiana, its State of incorporation. [.lf the guarantor has a Board ofDirectors, insert the following:

"Guarantor has approval from its Board of Directors to enter into this guarantee. "]

2. This gu antee is being issued so that Aerotest Operations, Inc. will be in compliance with re lationsissued b C, an agency of the U.S. Government, pursuant to the Atomic Energ i\ct of 95 as amended, and the Energy Reorganization Act of 1974.

NRC has promulgatea e afons in Title 10, Chapter I of the Code ofFederal Regulations, Pa 40, whic require tllat a holder of, or an applicant for, a an operating license issued pursuant to 10 CFR: P.aft 50 to maintain financial protection.

3.

4.

comply with all notification requirements Appendix A to 10 CFR Part 30.

The guarantor meets the following financial tests:

(i) Two of the following three ratios:

than 2.0; a ratio of the sum of net income plus depreciatio , depletion, and amortization to total liabilities greater than 0.1; and r ti.o of current assets to current liabilities greater than 1.5; and (ii) Net working capital and tangible net worth each at least six times the costs covered by financial tests; and (iii) Tangible net worth of at least $21 million; and A-1 NUREG-1757, Vol. 3, Rev. 1

I APPENDIX A (iv) Assets located in the United States amounting to at least 90 percent of total assets or at least six times the costs covered by financial tests .

5. The guarantor has majority control of the voting stock for the following licensee covered by this guarantee: Aerotest Operations, Inc., Aerotest Research and Radiograph Reactor, 3455 Fostoria Way, San Ramon, CA, 94583 , NRC License No. R-98.

6. For value received from Aerotest Operations, Inc. , and pursuant to the guarantor's authority to e teF into this guarantee, the guarantor guarantees to NRC that, as required by License o. R-98 the guarantor shall pay into the standby trust fund $1,500,000.

7. The 8.

9.

1-

10. The guarantor also agrees to notify the NRC promptly if the ownership of the licensee or the parent fim1 is transferred and to maintain this guarantee until the new parent firm or the licensee provides alternative financial protection acceptable to the NRC.

11 . The guarantor agrees that if it determines, at any time other than as described in Recital 8, that it no longer meets the financial test criteria or it is disallowed from continuing as a guarantor, it shall establish alternative financial protection as specified in 10 CFR § 140.14, as applicable, within 30 days, in the name of Aerotest Operations, Inc. unless Aerotest Operations Inc. has done so.

12.

13 .

14.

15.

16. derthe guarantee agreement.

17. The guarantor agrees that if the guarantor admits in writing its

• ability to pay its debts generally, or makes a general assignment for the benefit of creditors, or any proceeding is instituted by or against the guarantor seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian, or other similar official for the guarantor or for any substantial part of its property, or the guarantor takes any action to authorize or effect any of the actions stated in this paragraph, then the Commission may:

(a) Declare that the financial protection guaranteed by the parent company guarantee agreement is immediately due and payable to the standby trust set up to protect the A-3 NUREG-1 757, Vol. 3, Rev. 1

APPE DIX A public health and safety and the environment, without diligence, presentment,

• demand, protect or any other notice of any kind, all of which are expressly waived by guarantor; and (b) Exercise any and all of its other rights under applicable law.

18.

19. The guarantor expTessly waive notice of acceptance of this guarantee by NRC or by Aerotest Operations, Inc. The guarantor also e pressly waives notice of amendments or modifications of the financi 1 rotection equ*

• me ts and of amendments or modifications of the license.

20.

knowledge. Effective date:

Autoliv ASP, Inc.

[Name ofperson signing]

[Title ofperson signing]

Aerotest Operations, Inc.

[Name ofperson signing]

{Title ofperson signing]

Signature of witness or notary: - - - - - - - -

ST AND BY TRUST AGREEMENT TRUST AGREEMENT, the Agreement entered into as of June _ _, 2016 by and between Aerotest Operations, Inc., a California corporation, herein referred to as the "Grantor, and Wells Fargo Bank, National Association, a national banking association organized under the law of the United States, the "Trustee ."

WHEREAS, the U.S. Nuclear Regulatory Commission (NRC), an agency of the U.S.

Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act o 1974, has promulgated regulations in Title 10, Chapter I, of the Code of F ederal Regulatio , P.a 140. These regulations, applicable to the Grantor, require that a holder of, or an applicant for, an operating license issued pursuant to 10 CFR Part 5'0 rovide financi 1 protection in the amount specified in 10 C.F.R. § 140.1 l(a) .

Section 1. Definitions. As used in this Agreement.

(a) The term "Grantor" means the NRC licensee any successors or assigns of the Grantor.

(b) successor trustee.

Section 2. Financial Protection. This Agreement pertains to the fina i l protection requirements specified in 10 CFR § 140.14(a)(2) required by License umber R-98 issued pursuant to 10 CFR Part 50.

Section 3. Establishment of Fund. The Grantor and the Trustee hereby establish a standbytrust fund (the "Fund") for the benefit ofNRC. The Grantor and the Trustee intend that no third party shall have access to the Fund except as provided herein.

Section 4. Payments Constituting the Fund. Payments made to the Trustee for the Fund shall consist of cash, securities, or other liquid assets acceptable to the Trustee. The Fund is established initially as consisting of the prope11y, which is acceptable to the Trustee, described in Schedule B attached hereto. Such property and any other property subsequently transferred to the Trustee are referred to as the "Fund," together with all earnings and profits thereon, less any payments or distributions made by the Trustee pursuant to this Agreement. The Fund shall be held by the Trustee, IN TRUST, as hereinafter provided. The Trustee shall not be responsible nor shall it undertake any responsibility for the amount of, or adequacy of the Fund, nor any duty to collect from the Grantor, any payments necessary to discharge any liabilities of the

I Granter established by RC.

Section 5. Payment for Required Activities Specified in the Plan. The Trustee shall make payments from the Fund to the Gran tor upon presentation to the Trustee of the following:

(a) A certificate duly executed by the Secretary of the Grantor attesting to the occwTence of the events, and in the form set forth in the attached Certificate of Events, and (b) A certificate attesting to the following conditions:

(1) that an e en re iring financial protection is declared pursuant to 10 CFR Part 140; (2)

(3) such funds shall no longer constitute (a) Securities or other obligations of the Grantor, or any other owne o - operator of the facilities, or any of their affiliates as defined in the Investment Company Act of 1940, as amended (15 U.S.C. 80a-2(a)), shall not be acquired or held, unless they are securities or other obligations of the Federal or a State government; (b) The Trustee is authorized to invest the Fund in time or demand deposits of the Trustee, to the extent insured by an agency of the Federal government, and in obligations of the Federal government such as GNMA, FNMA, and FHLM bonds and certificates or State and Municipal bonds rated BBB or higher by Standard & Poor's or Baa or higher by Moody's Investment Services; and (c) For a reasonable time, not to exceed 60 days, the Trustee is authorized to hold uninvested cash, awaiting investment or distribution, without liability for the payment of interest thereon.

Section 7. Commingling and Investment. The Trustee is expressly authorized in its discretion:

(a) To transfer from time to time any or all of the assets of the Fund to any common, commingled, or collective trust fund created by the Trustee in which the Fund is eligible to participate, subject to all of the provisions thereof, to be commingled with the assets of other trusts participating therein; and (b) To purchase shares in any investment company registered under the Investment Company Act of 1940 (15 U.S .C. 80a-l et seq.), including one that may be created, managed, underwritten, or to which investment advice is rendered, or the shares of which are sold by the Trustee. The Trustee may vote such shares in its discretion.

Section 8. Express Rowers of Trustee. Without in any way limiting the powers and discretion conferred upon the Trustee the other provisions of this Agreement or by law, the Trustee is expressly aut C'.lrizea and empowered:

(a)

(b)

(c)

(d) To deposit any cash in the Fund in interest-bearing accounts maih ained or savings certificates issued by the Trustee, in its separate corporate capacity, or in any other banking institution affiliated with the Trustee, to the extent insured by an agency of the Federal government; and (e) To compromise or otherwise adjust all claims in favor of or against the Fund.

Section 9. Taxes and Expenses. All taxes of any kind that may be assessed or levied against or in respect of the Fund and all brokerage commissions incurred by the Fund shall be paid from the Fund. All other expenses incun*ed by the Trustee in connection with the administration of this

Trust, including fees for legal services rendered to the Trustee, the compensation of the Trustee to the extent not paid directly by the Grantor, and all other proper charges and disbursements of the Trustee shall be paid from the Fund.

Section 10. Annual Valuation. After payment has been made into this standby trust fund, the Trustee shall annually, at least 30 days before the anniversary date of receipt of payment into the standby trust fund, furnish to the Grantor and to NRC a statement confirming the value of the Trust. Any securities in the Fund shall be valued at market value as of no more than 60 days before the anniversary ate of the establishment of the Fund. The failure of the Grantor to object in writing to the T st e w"thin 90 days after the statement has been furnished to the Grantor and NRC shall consti e a cone usively binding assent by the Grantor, barring the Grantor from asserting any c aim or liabilit against the Trustee with respect to the matters disclosed in the statement.

Section 13 . Successor Trustee. Upon QO days o *ce t0 C and the Grantor, the Trustee may resign; upon 90 days notice to NRC and the Truste , the Grantor may replace the Trustee, but such resignation or replacement shall not be effect */Ve until the G ntor as appointed a successor Trustee, the successor accepts the appointment, the successor is ready to assume its duties as trustee, and NRC has agreed, in writing, that the s~* ces or *s a ap, ropriate F deral or State government agency or an entity that has the authorit to act as a , stee and hose trust operations are regulated and examined by a Federal or State agenc . The successor Trustee shall have the same powers and duties as those conferred upon the Trustee hereund . en the resignation or replacement is effective, the Trustee shall assign, transfer, a d P.a ove o he successor Trustee the funds and properties then constituting the Fund. If or ny reason the Grantor cannot or does not act in the event of the resignation of the T tee, the Trustee may apply to a court of competent jurisdiction for the appointment of a sm:'°essor Trustee or for instructions. The successor Trustee shall specify the date on which it assumes administration of the trust, in a writing sent to the Grantor, NRC, and the present Trustee, by certified mail 10 days before such change becomes effective. Any expenses incurred by the Trustee as a result of any of the acts contemplated by this section shall be paid as provided in Section 9.

Section 14. Instructions to the Trustee. All orders, requests, and instructions by the Grantor to the Trustee shall be in writing, signed by such persons as are signatories to this Agreement or such other designees as the Grantor may designate in writing. The Trustee shall be fully protected in acting without inquiry in accordance with the Grantor's orders, requests, and instructions. IfNRC issues orders, requests, or instructions to the Trustee, these shall be in writing, signed by NRC or its designees, and the Trustee shall act and shall be fully protected in acting in accordance with such orders, requests, and instructions. The Trustee shall have the

I right to assume, in the absence of written notice to the contrary, that no event constituting a change or a termination of the authority of any person to act on behalf of the Grantor or NRC hereunder has occurred. The Trustee shall have no duty to act in the absence of such orders, requests, and instructions from the Grantor and/or NRC, except as provided for herein.

Section 15. Amendment of Agreement. This Agreement may be amended by an instrument in writing executed by the Grantor, the Trustee, and NRC, or by the Trustee and NRC if the Gran tor ceases to exist. All a endments shall meet the relevant regulatory requirements ofNRC.

Section 16. Irrev0cability a d ermination. Subject to the right of the pmties to amend this Agreement as provided in Section 15, this trust shall be irrevocable and shall continue until terminated t e w1itten agreem nt of the Grantor, the Trustee, and NRC, or by the Trustee and NRC ifth Grantor ceases toe ist. U tm termination of the trust, all remaining trust property, less final trust aarninistratio expen es, hall be delivered to the Grantor or its successor.

Section 18. This Agreement shall be administered, laws of the State of[California?insert name ofState].

Section 19. Interpretation and Severability. As use i this Agree ent, word in the singular include the plural and words in the plural include the singular. The escriptive eadings for each section of this Agreement shall not affect the interpretation or the legal efficacy; f his Agreement. If any part of this Agreement is invalid, it shall not affect the rerna *

• which will remain valid and enforceable.

I IN WITNESS WHEREOF the parties have caused this Agreement to be executed by the respective officers duly authorized and the incorporate seals to be hereunto affixed and attested as of the date first written above.

GRANT OR:

Aerotest Operations, Inc.

[need to add address]

[Signature of representative of Grantor]

[Title]

ATTEST:

[Title]

[Seal]

ATTEST:

[Title]

[Seal]

U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington DC 20555 Re: Aerotest Operations, Inc. , Docket No. 50-228 Response to Request for Additional Information Regarding application for Change in Method of Providing Financial Protection Reference 1: Letter from Spyros Traiforos, Project Manager, Research and Test Reactor Licensing Branch re : Aerotest Operations, Inc. - Request for Additional Information Regarding A.pplication for a Change in Method of Providing Financial Protection (TAC No . M]6254) dated January 20, 2016.

I am the chief executive officer of to Iiv ASP, Inc., a corporation. This letter is in support of this firm's use of the financial test to demonstrate adequate resources, as specified in 10 CFR Part 140.

I hereby certify that Autoliv ASP, Inc. is currently a going concern, and that it possesses positive tangible net worth in the amount of approximately$ 1.1 billion.

This firm [insert "is required" or "is not required"] to file a Form 10-K with the U.S. Securities and Exchange Commission for the latest fiscal year. This fiscal year of this firm ends on [insert month and day].

I hereby certify that the content of this letter is true a d correct to the best of my knowledge.

[Name]

[Title]

[Date]

I NON PROPRIETARY U.S. Nuclear Regulatory Commission Attn: Document Control Desk

• Washington DC 20555 Re: Aerotest Operations, Inc., Docket No. 50-228 Response to Request for Additional Information Regarding App lication for Change in Method of Providing Financial Protection

,; ...... ~ . *~*"'

Reference l.i :.[;etter fro.m.Spyros Traiforos, Project Manager, Research and Test Reactor .Lxcei':i.sing Branch re: Aerotest Operations, Inc. - Request for Additional Infoqrw.1i6!1 Regarding A;pplication for a Change in Method of Providing Financial Protb~t{q (TAC No. M]'6254) .P!lted January 20, 2016.

"';i*z~-.'1- .. .,f~;/ ;iit~~th,,

I am the chief fib.~S~-~J~clffic~~7,~;f5~utoliv~f,P, Inc., a corporation ("Autoliv"). In the .

Request for Informat10n c :~~J~);"J,11cluded '(f.~tJ1 Reference 1, the NRC Staff stated that It needed additional infor~11itl~n to"et1~9le it }§;:9bmplete a detailed technical review of request of Aerotest Opefihions, InoL('.'A~fiofost") to rely on its parent company, Autoliv, to provide adequate financial assLn'~Kce in.'accordance with 10 C.F.R. § 140.14(a)(2).

The NRC Staff further stated that{t had determined ,ffiaC he criteria established in Appendix A to 10 C.F.R. Part 30{~11*8 guislGJPQ~fii;,~fl}~-G -1757, "Consolidated

• Decommissioning Guidance - FiriW'~~J~)rWsS'~pce,;,We'cordkeeping, and Timeliness" are appropriate for the purpose of evafuating Aernw**t s reliane;.~~n" the adequate resources of Autoliv. This letter is in support of ~~f6test' s tJi,~~o'f il1e,J1nancial test outlined in Appendix A to 10 C.F.R. Part 30 to 9:_e1nonst1~~~e'.~ fianci ai(~s§_urance in

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accordance with 10 C.F.R. § 140.14(a)(2). ~~~~{ d)i*'-.:~l:,, '<~~

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Autoliv guarantees, through the parent company gtict"r~ntee subrriitfod to demo~'st~ate compliance under 10 CFR § 140. 14, that adequate resources are availab le to w§~i<l~ the financial protection specified in 10 C.F.R. § 140.1 l(a)(2) fo r the following .fA~ility *.

owned and operated by Aerotest, a subsidiary of Autoliv. The amount qf;firiancial protection required for this faci lity, so guaranteed, is shown for the f~qUity:

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Name of Facil ity: Aerotest Research and Radiography Reactor ("ARRR")

License Number: R-98 Location of Facility : 3455 Fostoria Way, San RU;mon, California, 94583 Amount of Financial Protection: $1.5 Mi llion Auto liv is required to file a Form 10-K with the U,S. Securities and Exchange Commission for the latest fiscal year.

The fiscal year of this firm ends on December 31. The fi gures for the following items marked with an asterisk are derived from Autol iv's independently audited, year-end financi al statements an d footnotes for the latest completed fiscal year, ended December 31, 2015 . A copy of this firm's most recent fina nci al statements is enclosed.

NON PROPRIETARY Financial Test I (in millions)

1. Financial Protection required by 10 C.F.R. § 140 .1l(a)(2)

a. Financial Protection amounts covered by this parent company guarantee $ Ll

b. All decommissioning amounts covered by other NRC or Agreement State

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parent comp~y isiJ:i;lntntees or self-guarantee N .A.

¥~*~7 ',,)1~,:,. ...

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c. All a~p.~nts covered b~J arent company guarantees, self-gu:~:f"ilntees, or financi ~r'tests of other Federal or State agencies N .A.

(e.g., EPA) .;, -~?~:~.

TOTAL $.1.j_

• 2. Total liabilities (if an)!,poition of,ih~. :fjpaB2lal protection amount is included in total liabilities on your firm's fif1a'nciaJ"statements, you may deduct the amount of that portion fron~fahis line and ad~Hh,?t' amount to lines 3 and 4) $. . .

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• 3. Tangible net worth** ~~ ,,,.,i;\!f#ffe'.-~*"' .ft1i' $

.,";r*v.;~;'f.iW\ ,~::*t**. ,4;y

~r :+lfle:~:\~i

• 4. Total net worth** * $

• 5. Current assets $

• 6. Current liabilities $- -

• 7. Net working capital (line 5 minus line 6) $- -

• 8, The sum of net income p lus depreciation, depletion, and amortization,,~;['~:/

/*~::>"

• 9. Total assets in Un ited States .1::-i.

""~~'-t-.

~" $

Yes No

10. Is li ne 3 at least $21 n~iltion? x

11. Is line 3 at least 6 times line 1? ~

12. Is line 7 at least 6 times line 1? ~

13. Are at least 90 percent of firms' assets located in the United States?

If not, complete line 14,

14. ls line 9 at least 6 times line 1?

Guarantor must meet two of the fo llowing three ratios:

NON PROPRIETARY

15. Is line 2 divided by line 4 less than 2.0? x

16. Is line 8 divided by line 2 greater than 0.1 ? x

17. Is line 5 divided by line 6 greater than 1.5?

Notes:

• Denotes figures derived from financial statements.

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• • Tangible ~~!\tvortl#i~ :?efined as net worth minus all intangible assets and excluding the net book:,;V.altie of the n11clear facility and site.

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Ex4~J41i1~*g the net boogry alue and goodwill of the nuclear facility and site.

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I hereby certify that the content of this letter is true and correct to the best of my knowledge.

[Name]

[Title]

[Date] *~

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CONFIRMATION OF CHIEF FINANCIAL OFFICER'S LETTER We have examined the financial statements of Autoliv ASP, Inc. ("Autoliv") for the two years ended December 31, 2015 , and have issued our repo1i thereon dated March 30, 2016 . Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary.

Autoliv has pr r d documents to demonstrate its financial responsibility under NRC ' s financial protection regulaf ons, 10 CFR Part 140. This letter is furnished to assist the licensee Aerotest Operatic s, Inc. (Au o *v ' s subsidiary), License No. R-98, in complying with these regulations and s ould not be s d for other purposes.

1.

2.

3.

4. Recomputed the totals and percentages.

Because the procedures in 1-4 above do not constitute a full ex mination made in accordance with generally accepted auditing standards, we oomot express an opinion on the manner in which the amounts were derived in the *1 ms referred to above. In connection with the procedures referred to above, no matters came to our attention that cause us to believe that the chief financial officer' s letter and supporting information should be adjusted.

We have evaluated the off-balance sheet transactions of Autoliv and it is our opinion that these transactions [insert "could" or "could not"] materially adversely affect the ability of Autoliv to provide the financial protection specified in 10CFR§140.14(a)(2).

Signature Date

I Schedule Reconciling Amounts Contained in Chief Financial Officer's Letter with Amounts in Financial Statements AUTOLIV ASP, INC.

TWO YEARS ENDED DECEMBER 31,2015 Per Financial Reconciling CFO' s Statements Items Letter x

x x

xxx Accrued decommissioning costs included in current liabilities x Total liabiliti s (less accrued decommissioning costs} x 4

tangible assets acquired Accrued decommissioning costs included in current liabilities Tangible net worth (plus decommissioning costs) x Note:

The model schedule above does not illustrate an entire schedule. Rather, it illustrates the fonn of schedule the NRC expects to be submitted by licensees. Details and reconciling items will differ in specific situations

SUPPLEMENTAL AGREEMENT This Supplemental Agreement dated as of June_, 2016 (the " Supplement") is executed by and between Aerotest Operations, Inc., a California corporation, (the "Grantor"), and Wells Fargo Bank, National Association, a national banking association, organized under the law of the United States (the "Trustee"), and relates to the Standby Trust Fund Agreement executed by the Grantor and the Trustee as of June_, 2016 (the "Trust Agreement"). Capitalized tenns used herein but not defined herein shall have the meanings given to them in the Trust Agreement.

Recitals.

(a)

(b) This Suppler en7 serves o arify e ain provisions of the Trust Agreement by establishing additional tenns of agreemeufbetween ~ Grant r and the Trustee, but is not intended to diminish or contradict the tenns or conditions of the Tirust Agreement.

(c)

Agreements.

Section 1. No Duty to Confirm Compliance.

The Trustee shall have no duty to determine if th forth in any regulations of the NRC that the Trust A Section 2. Investment.

The Gran tor shall execute an Investment Objective Fonn substantially in the fo n of Ex i it C to this Supplement. In the absence of delivery of a properly executed Inves . en Objective, the Trustee shall hold the funds uninvested. The Trustee shall have no responsi * -i y or liability for any loss which may result from any investment or sale of investment made pursuant to this Supplement or any other actions or omissions of the Trustee, other than for gross negligence or willful misconduct. The Trustee is hereby authorized, in making or disposing of any investment pennitted by the Trust Agreement or this Supplement, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or any such affiliate is acting as agent of the Trustee or for any third person or dealing as principal for its own account.

Section 3. Tax Reporting.

(a) Tax Reporting. All interest or other taxable income earned from the investment of the Fund in any tax year shall be taxable to Grantor.

(b) Certification of Tax Identification Number. For certain payments made pursuant to the Trust Agreement, the Trustee may be required to make a "reportable payment" or " withholdable payment "

and in such cases the Trustee shall have the duty to act as a payor or withholding agent, respectively,

that is responsible for any tax withholding and reporting required under Chapters 3, 4, and 61 of the United States Internal Revenue Code of 1986, as amended (the "Code"). The Trustee shall have the sole right to make the determination as to which payments are "reportable payments" or "withholdable payments." The Grantor shall provide an executed IRS Form W-9 or appropriate IRS Form W-8 (or, in each case, any successor fonn) to the Trustee prior to the date hereof, and shall promptly update any such fonn to the extent such fonn becomes obsolete or inaccurate in any respect.

The Trustee shall have the right to request from the Grantor, or any other person or entity entitled to payment hereunder, any additional fonns, documentation or other infonnation as may be reasonably necessary for the Trustee to satisfy its reporting and withholding obligations under the Code. To the extent any such fo s to be delivered under this Section 3(b) are not provided prior to the date hereof or by the time the relate p£!yment is required to be made or are determined by the Trustee to be incomplete and/or inaccurate in any respect, the Trustee shall be entitled to withhold (without liability) po ion of any i erest or other income earned on the investment of the Fund or on any such nayments hereunder tot e extent withholding is required under Chapters 3, 4, or 61 of the Code, and sha have no obligation to gros up any such payment .

In addition to Section 8 of the Trust Agreement, discretion conferred upon the Trustee by the other pro expressly authorized and empowered as follows:

(a) The Trustee is not a party to, is no bound by, an has no dutY'tO inquire into any agreement other than the Trust Agreement and this Supplement. ;fh Trustee shall have no implied duties beyond the express duties set forth

• t e Tru t greement and this Supplement.

(b) The Trustee, in acting hereunder, may assume the e umeness of any written notice, request, waiver, consent, certificate, receipt, authorization, power of attorney, or other paper or document which the Trustee in good faith believes to be genuine and what it purports to be.

(c) In no event shall the Trustee be liable, directly or indirectly, for any (i) damages, losses, or expenses arising out of the services provided hereunder, provided that the Trustee acts in good faith, or (ii) special, indirect, punitive, or consequential damages or losses of any kind whatsoever (including without limitation lost profits), even if the Trustee has been advised of the possibility of such damages or losses and regardless of the fonn of action.

(d) Under no circumstances shall the Trustee be expected or required to risk or advance its own funds in the performance of its duties or the exercise of its rights under the Trust Agreement or this Supplement.

r Section 6. Immunity and Indemnification of Trustee.

The immunity and indemnification provisions of the Trust Agreement shall survive the tennination of the Standby Trust Agreement and this Supplement and, with respect to claims arising in connection with Trustee's duties wh ile acting as such, the resignation or removal of Trustee.

Section 7. Merger or Consolidation.

Any corporation or association into which the Trustee may be converted or merged, or with which it may be consolidate , or to which it may sell or transfer all or substantially all of its corporate trust business and assets as whole or substantially as a whole, or any corporation or association resulting from any suoli conversion, sa e, merger, consolidation or transfer to which the Trustee is a party, shall be and be ome the successor Trustee under the Trust Agreement and this Supplement and shall have and sueceed to the rights, P. -w:ers, duties, immunities and privileges as its predecessor, without the executlQn or filing of an).: instrument or paper or the perfonnance any further act.

hall be administered, construed and enforced according to Section 10. Reliance.

The Trustee shall not be liable for any action taken o not taken by i in accordan e with the direction or consent of the Grantor or its respective agents, representatives, successors, or assi , s. J'he Trustee shall not be liable for acting or refraining from acting upon any notice, request, consen: , direct! * , requisition, certificate, order, affidavit, letter, or other paper or document believed by it to e genuine an correct and to have been signed or sent by the proper person or persons, without furth r i quiry into the person's or persons' authority. Concurrent with the execution of this Trust Agreemen t e Grantor shall deliver to the Trustee an authorized signers' form in the form of Exhibit B to this Supplement.

Section 11. Notices All notices, requests, demands, and other communications required under this Supplement shall be in writing, in English, and shall be deemed to have been duly given if delivered (i) personally, (ii) by facsimile transmission with written confinnation of receipt, (iii) on the day of transmission if sent by electronic mail ("e-mai l") to the e-mail address given below, and written confirnrntion of receipt is obtained promptly after completion of transmission, (iv) by overnight delivery with a reputable national overnight delivery service, or (v) by mail or by certified mail, return receipt requested, and postage prepaid. If any notice is mailed, it shall be deemed given five business days after the date such notice is deposited in the United States mail. If notice is given to a party, it shall be given at the address for such party set forth below. It shall be the responsibility of the Grantor to notify the Trustee in writing of any name or address changes. In the case of communications delivered to the Trustee, such communications shall be deemed to have been given on the date received by the Trustee.

r Grantor: Aerotest Operations, Inc.

[Address}.

Attn: [ ]

Telephone: [ ]

E-mail: [ ]

Trustee:

NRC The Grantor understands that the Trustee's inability to receive or confirm funds transfer instructions pursuant to the security procedure selected by the Grantor may result in a delay in accomplishing such funds transfer, and agrees that the Trustee shall not be liable for any loss caused by any such delay.

Section 13 Counterparts.

This Supplement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. The exchange of copies of this Supplement and of signature pages by facsimile or by electronic image scan transmission in .pdf format shall constitute effective execution and delivery of this Supplement as to the Gran tor and Trustee and may be used in lieu of the original Supplement for all purposes.

IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be executed by their duly authorized officers on the day and year first set forth above.

Aerotest Operations, Inc., as Grantor

[Name}

Its: [Title]

EXHIBIT A

~~~~~~~~

TRUSTEE FEE SCHEDULE Acceptance fee Waived A one-time fee for our initial review of governing documents, account set-up and customary duties and responsibilities related to the closing. This fee is payable at closing.

Annual administration fee $7,500 An annual fee for customary administrative services provided by the trustee , including daily routine account management; i ve tment transactions, cash transactions processing (including wire and check processing), disburs ment of-.funds in accordance with the agreement, tax reporting for one entity, and providing account statements :o the parties. The administration fee is payable annually in advance per escrow account established. The fu t installment of the administrative fee is payable at closing.

Legal counsel fees and expenses None anticipated Out-of-pocket expenses At cost Out-of- pocket expenses will be billed as incurred at cost at the sole discretion of Wells Fargo.

Extraordinary services Standard rate The charges for performing services no e ntempl te at the *me of execution of the governing documents or not specifically covered elsewhere in tnis,scnedu Will bie (,It Wells Fargo's rates for such services in effect at the time the expense is incurred.

Assumptions This proposal is based upon the following assumptio s *th respeet to the role of,

• Type of trust/ escrow: Regulatory Performance Guarantee

• Number of accounts to be established: One

• Amount of trust/escrow: Unfunded at this time.

• Term of trust/ escrow: Up to 10 years

• Number of tax reporting parties: One

• Number of parties to the transaction: Two

• Number of cash transactions (deposits/disbursements):

the terms of the trust agreement.

• No payments to 3rd parties, only to the parties to the trust agreement or beneficiary NRC, but subject to the terms of the trust agreement.

• Subject to reaching a written Side Agreement acceptable to Wells Fargo, as trustee, and the Aerotest Operations, Inc. to cover required provisions not covered in the NRC Standby Trust agreement. The NRC will not need to review or sign the Side Agreement as they will not be a party to it.

• Subject to Wells Fargo's review and acceptance to the terms of the NRC Standby Trust agreement.

• Fees quoted assume all transaction account balances should the trust be funded will be held uninvested, invested in select Wells Fargo deposit products, or invested in money market mutual funds currently available on Wells Fargo's sweep platform.

Terms and conditions

• The recipient acknowledges and agrees that this proposal does not commit or bind Wells Fargo to enter into a contract or any other business arrangement, and that acceptance of the appointment described in this proposal is expressly conditioned on (1) compliance with the requirements of the USA Patriot Act of

I 2001, described below, (2) satisfactory completion of Wells Fargo's internal account acceptance procedures, (3) Wells Fargo's review of all applicable governing documents and its confirmation that all terms and conditions pertaining to its role are satisfactory to it and (4) execution of the governing documents by all applicable parties.

• Should this transaction fail to close or if Wells Fargo determines not to participate in the transaction, any acceptance fee and any legal fees and expenses may be due and payable.

• Legal counsel fees and expenses, any acceptance fee and any first year annual administrative fee are payable at closing.

• Any annual fee covers a full year or any part thereof and will not be prorated or refunded in a year of early termination.

• Should any of the assumptions, duties or responsibilities of Wells Fargo change, Wells Fargo reserves the right to affirm, mo i or rescind this proposal.

• The fees desc :t>ed m this proposal are subject to periodic review and adjustment by Wells Fargo.

• Invoices outstanding for over 30 days are subject to a i.5% per month late payment penalty.

• This fee roposal is good for 90 days.

issuing state agency.

I 1

EXHIBITB Aerotest Operations, Inc., (the "Grantor") certifies that the names, titles, telephone numbers, e-mail addresses and s ecimen signatures set forth in Parts I and II of this Exhibit B identify the persons authorized o p ovide direction and initiate or confirm transactions, including funds transfer instructi0ns, on beha of the Grantor and that the option checked in Part III of this Exhibit B is the secut1t procedure e ected by the Grantor for use in verifying that a funds transfer instructio received by the Trustee is that of the Grantor.

Part I Name, Title, Telephone Number, Electronic Mail ("e-mail") Address and Specimen Signature for person(s) designated to provide direction, including but not limited to funds transfer instructions, and to otherwise act on behalf of the Gran tor Telephone Number E-mail Address Specimen Signature

[list more if desired]

I Part III Means for delivery of instructions and/or confirmations The security procedure to be used with respect to funds transfer instructions is checked below:

D Option 1. Confirmation bv telephone call-back. The Trustee shall confirm funds transfer instructions by telephone call-back to a person at the telephone number designated on Part II above. The person confinning the funds transfer instruction shall be a person other than the person from om the funds transfer instruction was received, *unless only one person is designated *n b th P rts and II of this Exhibit B.

D D

Trustee may, at its D Option 4. Delivery of funds transfer instructions by password protected file transfer system with confirmation. Same as Option 3 above, but the Trustee shall confinn funds transfer instructions by D telephone call-back or D e-mail (must check at least one, may check both) to a person at the telephone number or e-mail address designated on Part II above. By checking a box in the prior sentence, the party shall be deemed to have agreed to the terms of such confinnation option as more fully described in Option 1 and Option 2 above.

Dated this_ day of 2016.

By~~~~~~~~~~~~~~~~~~

Name: [

Title:

[

EXHIBIT C Investment objective for discretionary accounts Account information Account Name: Aerotest Operations, Inc (NRC) Financial Protection Trust Account Number(s): XXXX0600 Check one Investment objective Investment characteristics

• Focus on preservation of principal D

• Highly liquid

• Reasonable risk-adjusted return

• Focus on preservation of principal D

• Subiect to some market fluctuations Aerotest Operations, Inc.

Company Name

_}_}16

[Name, Title] Date Wells Fargo Bank, National Association, as Trustee

_}_}16 Amy C. Perkins, Vice President Date

AFFIDAVIT I, Anthony J. Nellis, hereby affirm and state as follows:

I. I hold the title of Vice President, Legal for Autoliv ASP. Inc. ("Autoliv"), and I'm authorized to execute this affidavit on behalf of Autoliv.

2. The attached draft letter from the chief financial officer of Autoliv (Re: Aerotest Operations, Inc., Docket No. 50-228, Response to Request for Additional Information Regarding Application for Change in Method of Providing Financial Protection) and the Consolidated Financial Statements of Autoliv for the Years Ended December 31 , 2015 and 2014, contain proprietary commercial infonnation related to the financial condition of Autoliv. This information should be held in confidence by the NRC and withheld from public disclosure. The draft letter has been marked to show the information which should be held in confidence by the NRC and withheld from public disclosure. The entirety of the Consolidated Financial Statements should be should be held in confidence by the NRC and withheld from public disclosure

3. In making this application for withholding of proprietary information of which it is the owner, Autoliv believes that the information qualifies for withholding under the exemption from disclosure set forth in the Freedom of Information At ("FOIA"), 5 U.S.C. Section 552(b)(4), the Trade Secrets Act, 18 U.S.C. Section 1905, and NRC regulations 10 CFR 9.17(a)(4) and 2.390(a)(4) for trade secrets and commercial information because:

I. This information is and has been held in confidence by Autoliv;

11. This info1mation is of a type that is customarily held in confidence by Autoliv, and there is a rational basis for doing so because the information includes sensitive business information pertaining to the financial condition of Autoliv:

111. The information is being transmitted to the NRC voluntarily and in confidence.

1v. This inf01mation is not available in public sources and could not be gathered readily from other publicly available information.

v. Public disclosure of this information would create substantial harm to the competitive position of Autoliv by disclosing certain business information that is not available to Autoliv's customers and competitors.

vi. Public disclosure of the information sought to be withheld is likely to cause substantial harm to Autoliv's competitive position. The precise value of the information is difficult to quantify, but clearly is substantial.

vii. Autoliv competitive advantage will be lost if its competitors are able to use Autoliv's financial informatio their own commercial activities. The value of this information to Autoliv would be lost if the information were disclosed to the public.

4829-1372-4722 .vl

JN~scribed and sworn before me, a Notary Public, in and*for the State of _M){ flij{)[{.h this

{'Cftt_a

_ ay of June 2016. ---u*

Witness my hand and Notarial Seal.

My Commission Expires: 0 1::(~ Of RUTH A. WILKENING Notary Public, State of Michigan County of Oakland My Commission Expi Dec 21 2019 I Acting in the Coufli'L~-

o=:l.oc~~de~

2 4829-1372-4722.vi