ML20078G336

Application to Amend License CSF-1,revising Paragraph 5 of Original Application Re Applicant Financial Qualifications

ML20078G336
Person / Time
Site:	West Valley Demonstration Project
Issue date:	07/15/1965
From:	Runion T NUCLEAR FUEL SERVICES, INC., SCHARFELD, BECHHOEFER & BARON
To:
Shared Package
ML20078G199	List: ML20078G203 ML20078G207 ML20078G210 ML20078G214 ML20078G218 ML20078G222 ML20078G226 ML20078G241 ML20078G250 ML20078G265 ML20078G276 ML20078G284 ML20078G287 ML20078G291 ML20078G300 ML20078G308 ML20078G336
References
FOIA-83-354 NUDOCS 8310120207
Download: ML20078G336 (26)

Text

• ~

(

('~

7 Before the UNITED STATES ATOMIC ENERGY COMMISSION o o>

Q Washington, D. C. ( . ,[ L [{.

Y 9 -

2 JUL2 01965 - r ~

t.s. t r :: tur.u. T 9 t r a :I:n IN RE MATTER OF THE $[j@ f APPLICATION OF 4 co to Nuclear Fuel Services, Inc.

• For Construction Permit and Licenses AEC DOCKET NO.: 50-201 For a Spent Fuel Processing Plant Under Sections 53, 63, 81, 104(b) and 185

~

'"- Of the Atomic Energy Act yn, C0+,g

,nSV y f? IQ

~

j'.?  ;. , =Qa NUCLEAR FUEL SERVICES, INC. !g,7 [. 3 Application for  ! ' d Construction Permit and License 9

- - Gl 1sss: :

ff./z c,[Tr g for a Nofy "%e, g

, j(4 A Spent Fuel Processing Plant 2

(. Part A. General Corporate Financial and Technical Information INFORMATION SUBSEQUENT TO CONSTRUCTION PERMIT SUBMISSION NO. 2 i

Scharfeld, Bechhoefer & Baron NUCLEAR FUEL SERVICES, INC.

1710 "H" Street, N. W. T. C. Runion, President Washington, D. C. P. O. Box 1757 Baltimore, Maryland Attorneys for Applicant f O f. u.'!

- zCa. I' C ** m 56' 8310120207 830714 ^' h PDR FOIA PDR 4- ~~q s ARNOLD 83-354

.  ; (  ;

Beforo the U. S. ATOMIC ENERGY CO3!ISSION Washington, D. C.

APPLICATION FOR LICENSE TO CONSTRUCT AND OPERATE A CHEMICAL PLANT PhRT A -

Information Subsequent to Construction Permit Submission No. 2

^

The Applicant herewith submits the following information amending Paragraph 15 of Applicant's original application as amended by Paragraph 5 of Submission No. 1 of Information Subsequent to. Construction Permit dated January 7, 1965, and amending or re-placing and superseding Paragraphs 6 and 7 of Applicant's original application dated July 25, 1962, and adding annexes, designated

~

as Revised Annexes 3, 5, and 7, relating to the present financial

' situation of the Applicant.

., The paragraphs and annexes in this submission are nus-

'bered as in the application dated July 25, 1962.

Amendment of Paragraph 5 of Information Subsequent to Construction Permit Sabmission No. 1- Summary of the Project.

Paragraph 5 is amended by adding immediately before the final sentence a new subparagraph as follows:

l NFS hereby incorporates by reference Paragraph 4 of Amerdment No. 2 of the Application for Licenses of the New York l

State Atomic and Space Development Authority, dated January 12, 1965

t Amendment of Paragraph 6 - License Requested. Paragraph 6 is amended by deleting therefrom the following clauses at the end of said paragraph "and requests will be submitted at an

. . appropriate time to Atomic Energy of Canada, Ltd. for authority to assign the Port Hope, Ontario facility to Applicant." This provision no longer is required because o'f the sale by Applicant of the Port Hope, Ontario facility.

_ Paragraph 7*- Financial cualifications. Applicant sub-( mits the following information supplementary to that furnished in its application of July 25, 1962, as amended.

The financing of the project has been obtained as set fo^rth in Revised Annex 3 The bank loan agreement between NFS and two banks, referred to in Revised Annex 3, is subnitted as Revised Annex 5 Applicant's balance sheet on June 30, 1965, and as projected on December 31, 1965, is submitted as Revised Annex 7

As set forth in Submission No. 1 herein, dated January 7,1965, the feed materials plant formerly owned by the Davison Division of W. R. Grace and Company, located at Ervin, Tennessee >

has been transferred to the Applicant. Likewise, as set forth in Submission No. 1 herein, the Port Hope, Ontario fuel fabrication facility formerly owned by AMF was transferred to Applicant and certain of its assets were subsequently sold by Applicant. The assets of the Erwin, Tennessee plant and the proceeds from the sale of the Port Hope assets are reflected in the balance sheet in Revised Annex 7

The estimated cash flow from the Ervin operations for ,

the remax der of 1965 is reflected in Revised Annex 7 Applicant's estimates of the amounts required to com-

. plete the plant and bring it into production are reflected in the projected balance sheet for December 31, 1965, as set forth in Revised Annex 7 and are substantially less than available cash resources. Applicant further estimates that when the plant at West Valley is in operation, cash (low after amortization of bank loans will be approximately $1,000,000 annually, A Therefore Applicant submits that it is financially qualified to bring the facility into operation and to operate the facility.

Respectfully submitted, NUCLEAR FUEL SERVICES, INC.

By -

-w . _ _

President s.

Subscribed and sworn to before me this /i day of d /, , 1965 l / s'

s. A >

$1 u t n. - $ i d. <#

Notary Public yg commkut3 W** 0"' "* #

~

My Commission expires .

~.,, . , , , - - - - - ,

i' t-

.v.

. CERTIFICATE OF SERVICE I, Bernhard'G. Bechhoefer, attorney for applicant nuclear Fuel Services, Inc. and admitted to practice before the

• Courts of this jurisdiction, herewith certify that I have this 19th day of July , 1965, sent a copy of the foregoing Submission lio. 2 of Information Subsequent to Construction Permit, via regular United States mail, bostage prepaid, to each of the following:

(; ,

Troy B. Conner, Jr., Esq., and Paul Siegel, Esq.

c/o Atomic Energy Commission .

Bethesda, Maryland Counsel for AEC Regulatory Staff Mr. Oliver Townsend 230 Park Avenue Dew York 17, New York New York State Atomic and Space Development Authority Oscar M. Ruebhausen, Esq.

c/o Debevoise, Plimpton, Lyons & Gates 320 Park Avenue

(_ New York 22, New York Counsel for New York State Atomic and Space Development Authority Mr. Norman Fagnan Supervisor, Tcwn of Ashford West Valley, New York

~

Mr. E. Scott Smith County Clerk Cattaraugus County Little Valley, New York

,h; y.,,. rlss.I, .i

i. . - {

Bernhard G. Bechhoefer

- " 9, 3 h/ _.

- [ '

R0vissd nnu 3

$'ile cop 7 July 15,1965 NUCLEAR FUEL SERVICES, INC.

Sources and Application of Funds for the Chemical Processing Plant (in $000)

Balance to

. Received '

N u 6/30/65 be Received Total SOURCES W. R. Grace & Co. $ 6,000 $ -

$ 6,000 American Machinc ,& Foundry Company (AMF) 2,000 -

2,000

. New York State Atomic & Space

• Development Authority (ASDA) 7,403 1,097 8,500 Bank Loan - Manufacturers and Traders Trust Company and Morgan Guaranty Trust Company 8,900 4,600 13,500

' Empire State Atodic Developmett Associates, Inc. (ESADA) 1,273 727 2,000 Total $25,576 $ 6,424 $32,000 APPLICATION Facility Costs:

O B'echtel - Constructed Facilities

.lg $23,938 sf NFS - Provided Related Facilities [ a , - 1,918

~

L-d&g,'g,Q 'h'.

g j -

25,856

' ~

Plant Site (ASDA Provided) /Sg- O- 500 Expenses Related to Construction 9 p 857 Working Capital 3 G 1,100 Preoperational Costs (Incl. Contingencies of $299,000) 3,400 Available for Contingencies (in Addition to $299,000 in Preoperational Costs) 287

$32,000 k

CONFORMED COPY .

f

. ~L.'  : \- Q - ko[ ,.

t ( cop, 31ANUFACTURERS AND TRADERS TRUST CO31PANY ar.d AIORGAN GUARANTY TRUST CO3IPANY OF NEW YORK

~

with NUCLEAR FUEL SERVICES, INC. ~

. TERAI LOAN AGREEMENT Dated as of July 1,1963 i s.

/ 'et . hjk. '\ \\.

z .

,t,f a F-9 ' '2'-

~fk a

5.h

c

{

TF2.2I LO/ N AGFmNT .

3"AICTSACTUREES AND T2AD2RS TRUST COMFA1W I

/=d AIORGAN GUARANTY T2UST CCJFANY OF 1GW YORK ,

T756 NUCLEAR FUEL SERVICES, INC.

t This Agreement dated as of the 1st day of July,1963 between:

.. MANUFACTUn5Rs AND TRAD:!Rs TRUST CostPANY, a banking corporation of the y State of New York having its prheipal banking office at 284 Mt.in Street, Buffalo, New York, nnd MORGAN GUARANTY TRUST CCa:PANY OF NEw YORK, a New York Cor-po= tion having its principal office at 140 Broadway, New York, New York (hereinafter called the " Banks"), parties of the first part, and NUCLEAR FUEL SERVICES, INC., a Maryland corporation having its principal office at 910-17th Street, Washington 6, 3 D, C..(hereinafter called NFS), party of the second part, in manner following:

STATEMENT OF FACTS NFS is a corporation organized and existing m good standing under the laws of the State of Maryland. Its authorized capital stock consists of 1,000 shares of common stock without par value. All of such authorized shares of common stock will be sub--

scribed for, and wh'en issued and outstanding, will be owned, directly or indirectly, as

- follows:

W. R. Grace & Co. ... . . .. ... ... . . 800 shares or 80 %

American Machine & Foundry Company . . 200 shares or 20%

The designations, preferences, privileges and voting powers of the shares of NFS stock and the restrictions and qualifications imposed thereon are set forth in annezed Ex-hibit -A.

NFS proposes to. construct and operate a spent nuclear fuel processing Center (Cen-l ter) in Cattaraugus and Erie Counties, in New York State, and has indicated its re-

! quire =ents for bank loans in order to complete the construction of that facility. The facility is to be constructed on land presently under the jurisdiction of, and held in the name of the State of New York, by the New York State Atomic Research and Develop-ment Authority (ARDA). ARDA is to have constructed for it on the same land, with '

its own funds, a pre-processing nuclear fuel receiving facility, as well as facilities for the -

storage of radio-active wastes, and other site improvements. The land, the fuel receiv-ing facility, the waste storage facilities and tha other site improvements are to be leased by ARDA to NFS for an initial term (subject to renewal) ending December 31,19S0.

The form of lease and the related Waste Storage Agreement and Facilities Contract be-tween NFS and ARDA are attached hereto and marked Exhibit B. '

a

F

- f

.l l

NFS intends to raise approximately 5S,000,000 by the sale of its s:ock to W. R. i Grace & Co. r.nd American Machine & Foundry Company. It will also obtain a capi-  !

tal contribution (Research Grant) from Empire State Atomic Development Associates, j Inc., a New York membership corporation consisting of 7 New York State utility; com .

panies (ESADA). In addition, NFS will require bank credits and NFS having applied .

for such financing, the Banks are willing to grant such assistance to NFS to the extest r.nd upon the terms and conditions hereafter set forth.

NOW, TZEREFORE, IT IS AGREED AS FCILOWS:

(4 Section 1. Representations cnd Warrantics 1.1. All statements hereinabove se: forth in the "S:atement of Facts" to this Agree-

=ent are true and all statements and representations contained in the Davison Chem-ical Division proposed R.C.A. for reproces' sing plant dated November 3,1962 or in the Request for Capital Appropriation No. 299, entit!ed " Nuclear Fuel Reprccessing Plant", copies of which have been furnished to the Banks, were true in all material re-

~

spects, at the time when made. .! s 1.2. Attached hereto as Exhibit C is a true copy of the Contract dated as of [

October 1,1962 between NFS and B,echte Corporation (without Exhibits) providing for the design, engineering and construction of a major portion of the Center. [e 1.3. The execution and delivery hereof and the performance of each and every

erm, covenan:, condition and undertaking herein provided for are within the corporate g p,wers of NFS, have been duly authorized by all proper and necessary corporate i

I action, and are rot in conflict with NFS's char:er, by-laws or any indenture, contract or agreement to which it is a party or by which it is bound, or with any statute, nile  ;

or regulation binding upon it.  !

1.4. None of the assets of NFS is subject to any mortgage, lien or encumbrance

,- of any character, exclusive of the ARDA lease agreement.  ;

i ,

1.5. There is no litigation or proceeding by or before any court, public body, agency or authority pending against NFS.

t 1.6. All of the outstanding shares of the capital stock of NFS will, when issued, ]

be fully paid and non-assessable.

1.7. There has been no event or happening which would cause any material ad-verse change in the financial condition of NFS from that shown in the Request For Capital Appropriation No. 299 referred to in Section 1.1 hereof.

Section 2. Conditions Precedent The Banks shall not be required to make any loans hereunder until NFS shall have received:

2.1. A cons:ruction permit issued by the Atomic Energy Commission (AEC) granting the right :o build the proposed facility.

2

2.2. A contract wi6 the AEC providing for utijization of NFS phnt Scilities (or ,

compensation in lieu thereof) for a minimum of 625 days commencing wii the date of 20 contract and ending on a date 5 yems after the first delivery of recovered product to the AEC or by June 30,1971, whichever is earlier. The minimum of 625 days is sub-ject to reduction to the extent that the totalutilization of NFS pl.m facilities during such 5-y=r peded exceeds 1500 days. Such contract may contain a termination for conven- ,

isnce of the Government clause. -

~

2.3. Contracts covering the processing requirements through December 31, 1980 of Commonwcahh Edison Company, Consolidated Edisoa Company of New York, Yankee Atomic Electric Company, Power Reactor Development Company and Northern States Power Company arising from the ope = tion of the presently existing atomic reactors owned by said utilities, such contracts being subject to termination after 5 years in the

. cvent NFS fails to meet a bona fide competitive offer.

2.6. The ESADA commitment (Research Grant) to make a $2,000,000 capital .

- contribution.

2.5. The ARDA lease agreement and the rehted Waste Storage Agreement and Facilities Contract executed in the form attached hereto as Exhibit B, and which shall be in full force and effect at the time of any loan hereunder.

'2.6. Commitment for an equity invest =cnt from W. R. Grace & Co. of S6,000,-

000 in cash plus its nuclear reactor feed materials phnt at Erwin, Tenn. representing a cunent ir. vestment of approximately $3,000,000, which commitment shall provide nm, until all of such S6,000,000 has been delivered to NFS, W. R. Grace & Co. will, c or prior to the time of any borrowing hereunder, make cash investments equal to 75%

of the amount borrowed hereunder.

2.7. Commitment for an equity investment from American Machine & Found-ry Company of S2,000,000 in cash plus all of the capital stock of AMF Atomics Can-ada Co. Limited, an Ontario Cogoration, representing a current investment of approxi-mately $700,000, which commitment shall provide tha't, until all of such $2,000,000

,. has been delivered to NFS, American Machine & Foundry Company will, at or prior to the time of any borrowing hereunder, make cash investments equal to 25% of the amount bonowed hereunder.

2.8. A contract with Bechtel Corporation in the form attached as Exhibit C.

Seedon 3. A:ncunt and Terms of Credit 3.1. Subject to the terms and conditions hereof and in reliance on the represen-tations and wananties of NFS contained herein, the Banks will make available to NFS on July 1,1963 the sum of $10,000,000 which may be bonowed, in part from time to time or in whole at any time, on or prior to June 30, 1965, but not thereafter, upon four business days notice to the Banks by NFS.

S.2. Subject to the terms and conditions hereof and in reliance on the represen-tations and warrr.nties of NFS contained herein, Morgan Guaranty Trust Company of New York will make available to NFS on July 1,1963 a standby line of credit in an aggregate a=ount of not to exceed $3,500,000 which may be borrowed, in part from 3

I

.ine to : ice or in whole at =y :ine, on or prior to January 1,1966, but not there- ,

.':er, upon four business days notice to Morgan Guamnty Trust Company of New York by NFS, provided t1:::, such s:=dby line of credit shall become available to NFS only r.f:er the fuH S10,000,000 provided for in Section 3.1 hereof has been borrowed. ~

3.3. ~ne lo=s provided for in Sec:!ons 3.1 and 3.2 hereof shall hereinafter col- -

f Icc:ively be referred to as the "2orrowing", =d such Borrowing shan be accomplished j in the fotowing ==ner: +

(c) Notes. As e ch loan pursu=t :o See: ion 3.1 hereof is made by the Banks, .

NFS shd1 execute =d deliver two notes in de for= of annexed Exhibit D (with the bk.nks appropriate!y fined) d::ed me day such loan is made. Each one of such i notes shall provide for pay =ent of one-hdf of the. principal amount of such loan j a:.d one of 2e said no:es sh:H be =. }:ble to de order of each of the Banks. The .

principd := cunt of such notes sh:H be hayable in twenty equal semi- nnual ins:aH- l men:s commencing Januiry 1,19c6 =d payable on each July 1 and January 1 .

~

tneren'ter to =d including July 1,1975. i As each loan pursu=t to See: ion 3.2 hereof is made by Morgan Gunran:y i Trus: Cc=p=y of New York, N S shall exec.::e and deliver to Morgan Guar =:y .

Trust Comp =y of New York a note in de form of annexcd Exhibit D (with the i blanks appropriately fined) dated $c day such lo:n is made.' Such note shall pro- ,

, vide for paymen: of the fuF principal amount of such loan in twenty equal semi- -

r.nnual ins: Haents commencing on Janua:y 1,1966 and payable on each July 1  !

and !==:y 1 dere:fter to =d including July 1,1975. ,

j All of the no:es delivered by NFS pursu=t to this Agreement shall beer h- l

erest on de unpaid principd cmount thereof at me. rate of 5%% per annum '

payable semi-=nuaHy on J=uary 1 and July I of each year. .

(b) Consolidation. On January 2,1966, or such other date as may be mutually  !

agreed upon, NFS will consolidate all of de notes outstanding under this Agree- i

, ment held by =y one person or co poration by issuing in exchange for all de j note; held by such person or corpora:ior a single note in the form cf annexed i Exhibit D (with de bl=ks appropriately fil!ed) for the aggregate unpaid princi- i pd amount of aH of the notes previous!y issued hereunder to such persor, or corpo- i ration. lt

3.4. Commi

ment Fec. NFS shall pay to the Banks for the credit made avail- i cble under Section 3.1 hereof a commitment fee equal to % of 1% per annum, pay-ab!e semi-annually on January I and July I of each year, on :he daily average unused  ;

portion of such credit for the period for which payment is being made. In addition, NFS  ;

shall pay to Morgan Guaranty Trust Comp =y of New York for the standby credit  ;

made available under Section 3.2 hereof a commitmen: fee equal to % of 1% per an-num, payab!: semi-annually on Ju!y I cnd J=uary 1 of each ye::, on the daily aver-  ;

se = sed por:ica of such standby credi: for the period for which payment is being rande. I S.5. Cancella: ion or Reduc:!on of Cr:dits. NFS = y c=cel or reduce ( in even mul-tiples of $300,000) the st=dby credit of Morgan Guamnty Trust Comp =y of New York 4'

e --e.mme 9 - 1

t.

under Section 3.2 hereof or the lending commitment of the Banks under 3.1 herecf, l cr both, on four days written notice to Morgan Guaranty Trust Company of New York, j or the Banks, as the case may be, and the commitment fees specidedin Section 3.4 shall F thereafter be computed on the unui,ed balances as so reduced of the standby credit and the lending commitment. .

- .I' Sectic 4. Afli:ruative Covenants .

h?S covenants and agrees: .

4.1. That it will apply the proceeds of the Borrowing exclusively to the construc-tion, maintenance and operation of the proposed Center, and further that it will complete the Center according to the plans and specifications set forth in the Contract with Bechtel Corporation referred to in Section 1.2 hereof; and, that, upon completion of the Center,

, it will maintain the phnt, property and equipment in full and effective working order and will make any and all repairs, alterations or changes that may be required to maintain the

[j g Center as an effective operating unit and to comply with any applicable governmental j

' regulations. , ,j.

4.2. That it will maintain adequate. insurance on its insurable properties now ll or hereafter acquired ard keep itself adequately insured against liability on account of I:

damage to persons or property and, when available at reasonable rates, for use and oc- '

L cupancy in the event of disaster, and will maintain all other applicable Workmen's Com-pensation Insurance, allin amounts and form reasonably satisfactory to the Banks.

4.3. That it will comply with all insurance requirements providedinitslease with ,

ARDA with respect to insurance coverage required by the AEC. I 4.4. That it will obtain, maintain and keep in full force and effect an AEC op-cr;. ting license and take all steps necessary to comply with whatever requirements and conditions are imposed by AEC with respect to the aforesaid license.

,( ~ 4.5. That it will pay prior to the date on which they become delinquent (i) all taxes, assess =cnts and governmental charges imposed upon or against it except to the extent and so long as contested in good faith and by appropriate proceedings and (ii) subject to like exception, all other lawful claims against it, including claims for labor, material and supplies.

4.6. That it will furnish the Banks:

(a) within 45 days after and as of the closp of each of the Erst three quarterly peri-ods in each fiscal year, namely the last days of March, June and September, a bal-ance sheet, profit and loss statement and analysis of surplus of NFS, each in con-formity with generally accepted accounting principles and certined by an appropri-ate officer of NFS; -

(b) within 90 days after and as of the close of each of NFS's Escal years a balance I

sheet, proSt and loss statement and an analysis of surplus of NFS, each certifed by an independent public accountant selected by NFS and satisfactory to the Banks; and .

5

i i

(

(c) from time to time such other information concerningNFS's afairs as theBanks may reasonably request.

~

f 4.7. That it will permit the Banks to inspect properties, operations and books of f T

account of NFS at all reasonable times.

4.8.- That it will .promptly notify the Banks in writing in the event: ,

~

(a) any litigation or proceeding shall be commenced or threatened against NFS ,

which is not adequately covered by insurance and which either involves an amount exceeding $100,000.00 or might materially adversely affect the financial condition, i business or operations of NFS; (b) there is any material adverse change in the financial condition, business or

.[!

l-operations of NFS; ,  ;

(c) there is any materia 1' change or modification in existing contracts, indentures or I-agreements which would adversely affect its financial condition, business or opera-

~

,r n tions; or (d) ARDA takes any steps looking to the termination or modification of the terms  ;.

of the ARDA lease referred to in Section 2.5 hereof, whether as a result of a default j' or alleged default thereunder or othenvise, or NFS shall take or failto take any j

. action which shall constitute a default under said lease. [

l 4.9. That it will do all things necessary to maintain, preserve and renew its cor-porate existence and all rights and franchises necessary to continue its corporate business. p 4.10. That it will notify the Banks promptly of any change of ownership of capi-tal stock or of any significant management changes. .i 4.11. That it will reimburse the Banks on demand, or without demand in the j case of the occurrence of any event of default, for any and all reasonable and necessary [

-l -

i

! out-of-pocket expenses (including reasonable attorneys' fees and expenses) paid or incur-

.i .

I red by the Banks in connection with this Agreement, whetherincident to the administra-

'l tion hereof or the handling, collection or protection of any of the notes issued hereunder l

t l

or of any other liability hereunder or any right or claim in connection herewith or there-l I with. -

L l

i -l

[

Section 5. Negative Covenants t Until all amounts owing hereunder are fully paid with interest, NFS will not, and.  !.

will not permit its subsidiaries, without the prior written consent of the Banks to- {

t.

i 5.1. Borrow any money or incur, create, permit to exist or assume, directly or  ;.

indirectly, any indebtedness except:

(a) under this Agreement; or  ;..

(b) indebtedness (other than for borrowed money) incurred in the ordinary course Ii of business; or. ,

~6 i

1

(c) under conditional sales agreccents, chattel mortgages and other purchase money '

obligations, and renewals and extensions thereof, provided that, (i) the aggregate amount of such indebtedness shall not at any time exceed $100,000, and (ii) the mortgage, pledge, lien or other security interest given to the lender in connection with such indebtedness shall be. confined solely to the item of property acquired

. thereunder.

5.2. Loan or make advances of money to or guarantee, endorse or otherwise be .

. or become liable or contingently liable in connection with the obligations of any per-son, firm or corporation except in the ordinary course of business.

5.3. Mortgage, pledge, assign or otherwise encumber any of its assets, real, personal or mixed, tangible or intangible, now or hereafter acquired, except as set forth in para-graph 5.1 hereof and with the further exception of the requirements of the ARDA lease.

5.4. Be a party to any merger or consolidation except of a wholly-owned subsid-iary into NFS.

f 5.5. Make any additional investments in any form in the stock or securities of any corporation other than 1) stock or securities cf a wholly-owned subsidiary,2) com-mercial paper of leading finance and industrial companies, 3) bankers acceptances ac-cepted by major banking institutions a,n,d 4) other debt obligations of comparable qual-ity and which are readily marketable in the United States of America.

'5.6. Redeem, retire or otherwise acquire for value any of its outstanding capital stock, or to pay any dividends or make any distribution of any of its assets to its stock-holders other than as proviced for herein.

5.7. Pay diyIdends to stockholders of NFS until the sum total of its capital stock and undistributed surplus is at least equal to 1.5 times the unpaid balance of the borrowings under this Agreement, and thereafter only to the extent of 50% of the amount by which the accumulated and undistributed earned surplus of the Company and its subsidiaries

. exceeds $1,000,000; provided, however, that there shall be no restrictiohs on the pay-

'(; ment of dividends so long as the accumulated and undistributed earned surplus of the -

Company and its subsidiaries, after payment of any such dividends, shall at least be equal to the unpaid balance of the borrowings under this Agreement.

5.8. Permit a warrant of attachment issued against its property in the amount of $25,000 or more to continue undismissed and unbonded for a period of 40 days .

after levy. 1 5.9. Sell or otherwise dispose of all or,any substantial part of its property or business.

5.10. Be or become liable to pay any rent under leases exceeding five years in duration for annual rentals exceeding in the aggregate $50,000, except 1) payment of rents under the existing lease of AMF Atomics Canada Co. Limited, and 2) payment of " Basic Rent" and " Additional Rent" under the ARDA Lease and the Waste Storage Agreement referred to therein.

5.11. Make or agree to make any material amendment or modification in the terms of the ARDA Icase rc rred to in Section 2.5 hereof or the Contract with Bechtel .

7

Corporation referred to in Section,1.2 hereof, which is adverse to the interests of the .

Banks.

Section 6. Events of Default i 6.1. Upon the occurrence of any of the following events (herein called events of .

default): '

, (a) NFS shall fail to pay principal or interest in respect of the notes issued here- ,,

under when due or within 15 days thereafter; or (b) NFS shall fail in the obse vance of any other term, covenant, or condition herein provided for and such failure shall continue for a period of 30 days after written notice by either of the Banks; or .

(c) any representation or warranty mad; herein by NFS, or any statement con- '

tained in the Davison Chemical Division proposed R.C.A. for reprocessing plant dated November 3,1962 or in the Request For Capital Appropriation No. 299,

( entitled " Nuclear Fuel Reprocessing Plant", copies of which were furnished to the Banks, shall prove to have been at the time when made in any material respect false or erroneous and NFS shall not have taken corrective ineasures sansfactory to the . .

Banks within 30 days after written notice by either of the Banks; or [

(d) any event of default shall occur under the ARDA lease referred to in Section

-2.5 hereof or any other indenture or agreement to which NFS is a party or by -

which it is bound; or (e) NFS becomes insolvent or bankruist or file:, a voluntary petition in bankruptcy or makes an assignment for the benefit of creditors or consents to the appointment of a trustee or receiver; or (f) a trustee or receiver is appointed for the greater part of NFS's properties and .

the appointment is not dismissed or stayed within 40 days; or  ;

.. (g) bankruptcy, reorganization, arrangement or liquidation proceedings are in-  !

stituted by or against NFS and, if against NFS, are consented to by it or remain i undismissed for 40 days; or

.(h) a change in the ownership of the capital stock of NFS owned, directly or in- -i directly, by W. R. Grace & Co. shall occur without the prior written consent cf the j>

Banks; 'j:

I all amounts owing on the notes issued hereunder may, on written notice from the Banks,

. be declared to be immediately due and payable without further notice, presentation or demand of any kind, all of which are hereby expressly waived.

6.2. No failure or delay on the part of the Banks in the exercise of any power or right shall operate as a waiver thereof, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right.

6.3. In the event that all amounts owing hereunder become due and payable and, without limitation, specifically in the event of reorganization or arrangement proceed-S

.m + -w m.

i ~ .

ings, NFS hereby gives the Banks the right to set of against all amounts owing here- '

under any moneys now or at any time hereafter on deposit to the credit of NFS.

Section 7. hap yn:ent 7.L NFS shall have the right at any time or times to prepay all or any portion of the notes hereunder and any such prepayment shall be divided pro rata among the holders of de notes outstanding hereunder ~ All such prepayments shall be applied on de semi-annur.1 install =ents' payable on the notes issued hereunder in the inverse order -

of their maturity. In de event that the funds for any prepayment are borrowed by NFS, it shall pay contemporaneously with such prepayment a premium equivalent to one-half of one percent (% of 1%) per annum upon the amount of such prepayment from the date thereof to de time or times the amount so anticipated would otherwise have matured.

Section 8. duppo::ing Documents ,

At the time of the signing of this Agreement NFS shall furnish the Banks in form and substance satisfactory to the Banks:

/

\

8.1. Photographic or certi5ed copies of the originals of the certiscate of incor-pora:icn of NFS and all certi5 cates of amendment thereof, together with a copy of its by-laws.

8.2. A certified copy of the reso,lutions of the Board of Directors of NFS author-izing de execution r.nd delivery of this Agreement and of the notes referred to herein and designating de oSicer or oSicers au$orized to sign and deliver the same.

8.3. An opinion of counsel for NFS to the efect set forth in the first and second paragraphs of the " Statement of Facts" contained herein, and in paragraph 1.3 hereof; that so far as counsel is informed there is no litigation or proceeding by or before any court, public body, agency or authority pending or threatened against NFS; that the cor-porate proceedings authorizing the execution and delivery of this agreement and the de -

ivery of the note issuable hereunder were duly and properly taken; and that this Agree-ment and the no:es executed and delivered pursuant hereto, if delivered in accordance

., with the terms hereof, will constitute, legal, valid and binding obligations of NFS en-forceable in accordance with their terms.

8.4. An opinion of counsel of NFS to the effect that no further consents or au-thorizations of any Federal or New York State Governmental Agency or Authority are re-quired to permit NFS to 1) efect the Borrowings, 2) issue the notes provided for in Section 3.3 hereof, and 3) construct and operate the Center, except (i) the AEC op- .

crating license referred :o in Section 4.4 hereof, (ii) approvals of ARDA required under the ARDA Lease and de Facilities Contract and Waste Storage. Agreement referred to there- -

in, (iii) a license from the New York State Department of Labor with respect to the op- '

eration of Iow !evel burial facilities at the Center, and (iv) possible licenses or pennits from the New York State Department of Health with respect to the discharge of effluents from the Center.

Section 9. Misecliencons 9.1. This Agreement shall be binding upon and inure to the benest of NFS, the Banks and their respective successors and assigns. NFS may not assign this Agreement or any of its rights hereunder widcut the prior consent of the : ~.:s.

9 .

s _ weep - -*M

9.2. All notices, statements, requests and demands herein provided for shall be deemed to hr.ve been given or made when delivered or mailed postage prepaid, if to Nu-clear Fuel Se.cces, Inc. at 910 - 17th Street,. Washington; D. C., if t' Manufacturers c.nd Traders Trust Company, at 284 Main Street, Buffalo, New York, and if to Morgan Guaranty Trust Company of New York, at 140 Broadway, New York, New York, or such other address as any party hereto may furnish to the other parties in writing. No other method of giving or making notices, statements, requests or demands is hereby pre-

. cluded. .'

9.3. Al' apeements, representations and warmnties made herein or in writing in ,

connection herewith shall survive the delivery of the notes and the making of the Bor-rowing hereunder.

9.4. This contmet shall be deemed to hr.ve been executed in the State of New York and shall be subject to and interpreted,under the laws of the State of New York.

9.5. NFS shall pay the reasonable legal fees and expenses of counsel for both Banks in connection with the negotiation.of the loan and the preparation of all required

(,i ' legal documents and attendance at the closing.

9.6. It is a condition of this agreement that all the stockholders of NFS shall pledge all the capital stock of NFS to the Manufacturers and Traders Trust Company, as agent for the banks, as collateral security for repayment of the Borrowings and per-formance of de other obligitions of HTS hereunder. ,-

9.7. This Agreeme t may be executed in any number of counterparts, each of.

which shall constitute an original, but which taken together shall constitute one agree-ment and shall become effective when at least one counterpart has been executed by all parties hereto.

9.8. The headings of the Sections and paragraphs of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any '

cf the terms and provisions hereof.

IN WrrxEss W5EREOF the parties have caused this Agreement to be executed by W their duly authorized officers as of the day and year first above written.

MANUFACTURERS AND TRADERS TRUST COMPAhY

. ,By DUDLEY M. IRWIN Execwive Vice Presidem MORGAN GUARANTY TRUST COMPANY OF NEW ~ YORK EBy.GERARD M. IVES NUCLEAR FUEL SERVICES, INC.

By T. C. RUNION 10 ,

s o .  ;.

^

.Q STATE OF NEw YOR : I

> ss' -

COUNTY OF NEw YORK l On this 16th dayof September,1963, before me personally came DUDLEY M. IRWIN to me personally known, who, being by me duly sworn, did depose and say that he re-sides in Buffalo, New York, that he is Executive Vice President of MANUFACTURERS ann TRADERS TRUST COliPANY, the corporation described in and which executed the above Instrument, and that he signed his name thereto by order of the Board of Directors -

of said corporation.

BERNADETTE M. FLYNN Eernsdette h!. Flynn No:=y Public, s: ate of New York No. 41 12577SS Queens County

, Cer:. Ced in New York County Term Expires Af arch 30,1965

( STATE OF NEw yon c ss' COUNTY OF NEW YORK On this 16th day of September,1963, before me p rsonally came GERARD M. Ivss to me personally known, who being by me duly sworn, did depose and say that he resides 201 East 62nd St., New York, N. Y., that he is a Vice President of MORGAN GUARAN-Tv TnUsT COS:?ANY OF NEW YORK, the corporation described in and which executed the above Instrun:ent, and that he signed his name thereto by order of the Board of Directors of said corporation.

BERNADETTE M. FLYNN Ectnr.det:c Af.Flynn Notary Pub:ic, state of New York No. 41 1257735 Queens County Cert. fled in New York County Term Expires Liarch 30,1965 STATE OF NEw YORK COUNTY OF NEw Yonx

} ss.

On this 16th day of September,1963, before me personally came T. C. RUNION to me personally known, who being by me duly sworn,'did depose and say that he resides

. 980 Elrod Road, Kensington, Md., that he is President of NUCLEAR FUEL SERVICES, INC., the corporation described in and which executed the above Instrument, and that he signed his name thereto by order of the Board of Directors of said corporation.

BERNADETTE M. FLYNN Ecrnade::c A!.Flynn No:=y Pub!!c. 5:::e of New York

!- No. 41 1257785 Queens County Cert Ced in New York County Term Expires Afarch 30,1965 11

a I [ . ), .

) O

- R;vissd Anntx 7 July 15, 1965 NUCLEAR FUEL SERVICES, INC.

'4 Co; Consojidated Balance Sheet

' 'g  ::*

(in $000) 4

'?

Actual Projected

...,,723

/ '4 June 30, 1965 December 31, 1965

)

g. cC"JC *

(Note 1) .

JUI.3 1955 f Asset: ne Current Assets: #CCJ ch7,#'[

g Cash \0; E $ 683 $ 1,095 Bank Certificates of Depo t c., p 400 -

Receivables - Net

• 693 989 Inventories 501 1,505 other Current Assets 57 25_

,- Tota 3 Current Assets 2.334 3,614

("

Fixed Assets (Note 2) 21,118 22,667 Less: Reserve for Depreciation 1.078 1,260 Fixed Assets - Net 20.040 21,407 Other Assets:

Pre-Operational Coscs - Reprocessing Plant 1,332 3,400 Other 253 184 Total Other Assets 1.585 3,584

$23.959 $28,605 Liabilities & Stockholders ' Equity Current Liabilities:

' "[' l Bank Loans Payable - Current (Note 3) $ 675 1,191

$ 1,350 i

, ' Accounts Payable 1,000 Other Current Liabilities 299 -

Totel Current Liabilities 2,165 2,350 l

l Deferred Taxes on Income 387 450 Deferred Credit - Research Grant (Note 4) 1,273 1,636 l Long-Term Debt - Bank Loans (Note 3) 8,225 12,150 l Other Liabilities -

l Total Liabilities 12,050 16,586 Stockholders' Equity:

i Capital Stock - Issued (Note 5) 11,105 11,105 l Paid-In Surplus (Note 6) 500 500 j Earned Surplus 304 414 Total Equity 11,909 12,019

$23,959 _$_28 ,605 l

t

c- ,

NUCLEAR FUEL SERVICES, INC.

Notes to the Balance Sheet Note 1 - No consideration has been given to any funds which may be derived from" a'etivities at thh reprocessing' plant".or pihnt aite prio.r 'to Jan6ary l',

~

Likewise', no provision has2been 'made. for ESADAlpa'ym'ent's o'f '

~

1966. -

$363,636.36 which'will'be received in 1966.

Note 2 - Fixed assets do not include $8,500,000 in land and facilities at West Valley, New York leased to NFS by ASDA. The detail of NFS-owned facilities by location is as follows:

June 30, 1965 December 31, 1965

($000) o West Valley, New York: ,

Spent Fuel Processing Plant $17,934 518,713

['\i Other Total West Valley, N. Y.

180 18,114 525 19,238 Erwin, Tennessee 3,004 3,429

$21,118 $22,667 Note 3 - The bank loan is to be repaid in equal semi-annual installments over a period of ten years. The first payment is due on January 1,1966.

Interest at a rate of 5 % is payable on the outstanding balance of the loan. The bank loan agreement is submitted as revised Annex 5.

Note 4 - ESADA is contributing $2,000,000 toward the research and development costs associated with the reprocessing plant. IVo of the eleven equal quarterly payments of $181,818.18 will not be received until 1966.

The contribution will be amortized against the cost of the plant over its depreciable life.

t Note 5 - In accordance with the stockholders ' agreement, W. R. Grace & Co. and

< American Machine and Foundry Company have made the following contribu-tions in return for eighty (80) and twenty (20) per cent ownership respec tively:

($000) Grace (80%) AMF (20%) Total Ca sh $6,000 $2,000 $ 8,000 Existing Facilities - at book value _2,466 639 3,105

$8,466 $2,639 $11,105 Note 6 - Funds have been contributed by the scockholders for use in expanding the facilities at the Erwin, Tennessee plant.

sd b 6

d

- g g.g yg n $ .&g Before the M '

UNITED STATES ATOMIC ENERGY COMMISSION Washington, D. C.

IN RE MATTER OF THE ,

APPLICATION OF Nuclear Fuel Services, Inc.

For Construction Permit and Licenses AEC DOCKET NO.: 50-201 For a Spent Fuel Processing Plant '

Under Sections'53, 63, 81, 104(b) and 185 Ci Of the Atomic Energy Act { ~.

& ? C;92 , Q 6f s' 1 l',. : m.

. . n';D Q

~ndC ,

~~

ON1SISS5s '2

( NUCLEAR FUEL SERVICES, INC.

kb tucu m r L#8 g

Application for 9

<n

• Construction Permit and License for a

.j Spent Fuel Processing Plant Part A. General Corporate Financial and Technical Information INFORMATION SUBSEQUENT TO CONSTRUCTION PERMIT SUBMISSION NO. 1 Scharfeld, Bechhoefer, Baron NUCLEAR FUEL SERVICES, INC.

& Stambler T. C. Runion, President 1710 "H" Street, N. W. P.O. Box 1757 Washington, D. C. Baltimore, Maryland Attorneys for Applicant 1" ,,

o

%['$

~

y ,

..s: j *;

- x__  : ' ' ' '

E0'-C D K Je ]g[

Before the liR Filo Copy-M U. S. ATOMIC ENERGY COMMISSION Washington, D. C.

[ ep\ NIi%j%

APPLICATION FOR LICENSE TO CONSTRUCT (s g1 y\[.\

AND OPERATE A CHEMICAL PLANT -

.. Y Ni

[3 l  !

9.' 9 ;"/

PART A - j' j!

{ i,d i r i t.0 -Y i

In accordance with the Atomic Energy Act of 1954, as amende\d','

.(hereinafter referred to as the "Act") and the regulations issued pursuant thereto, Nuclear Fuel Services, Inc. (hereinafter refer, red I

. to as the " Applicant") applies to the Atomic Energy Commission (hereinafter referred to as the " Commission") for the necessary licenses to construct and operate a chemical plant (hereinafter referred to as the " Facility") for the processing of irradiated fuel elements containing special nuclear materials to be located at the Western New York Nuclear Service Center (hereinafter referred to as the " Site"), Cattaraugus County, New York. In support of the applica-tion, the Applicant states the following:

1. Name of Applicant l

c. Nuclear Fuel Services, Inc. g

- . ^

l <nq

2. Address of Applicant 9 (',3 -+.- ) .g l

' ~~

I JUL 2 61962=

1, 101 North Charles Street V5 g

% ewm u Baltimore 3, Maryland g"m=*mme

'd 3,

Descri h on of BusNecs of Ap'plicant '

l Nuc ear F el Ser/vices Inc.,/is\ e cor oration er ani o

d u er he 1 a of the St te of Mar la d. It i

\

cont mp ate at

\

he mpan will own o lease from ,e New Yo State' Atomic ese ch

~A 7765

!", MARCm -

l gg # q; ' '

_. , ._ . m 8

h .:

< in accordance with Sections 185 and lo4(b), respectively, of the Act and regulations contained in Part 50 of Title 10 of the Code of Federal Regulations, and requests such license for the acquisi-tion, ownership, and operation of the facility for a period of forty (40) years.

I Applicant further requests a license to store spent 4

reactor fuels containing special nuclear material at the site from the date that the construction permit becomes effective and to store radioactive wastes from the plant operation pursuant to r ,

f Section 53 of the Act and the regulation contained in Part 70 of Title 10 of the Code of Federal Regulations from the date that the license becomes effective.

Applicant finally requests such other special nuclear, so'urce, and by-product materials licenses, pursuant to Sections 53, i ~

63, and 81, respectively, of the Act and the regulations contained.

in Parts 70, 40, and 30, respectively, of Title lo of the Code of Federal Regulations, as may be necessary or appropriate to the acquisition, ownership, and operation of the facility.

• At an appropriate time, requests will be submitted l separate from this application for the transfer of present Source and Special Nuclear Material Licenses for the Erwin, Tennessee facility from Grace to Applicant and requests will be submitted at an appropriate time to Atomic Energy of Canada, Limited, for authority to assign the Port Hope, Ontario facility to Applicant.

l 7 Financial Qualifications

- The costs of the project as originally estimated by the

/

l# , Bechtel Corporation and Davison Chemical Division of Grace are l

i

'l ' '

~

lMwwy. - g

1r ,

ll .

. - . .id e

$22,000,000 (See Annex 3). The Bechtel Corporation is preparing revised estimates of the cost of the project which will be furnished 1 by amendment. It is anticipated that the total costs will not

- exceed $25,000,000.

The cost of the project as set forth herein does not

.. c q include:

i (1) Expenditures of the Davison Chemical Division of Grace and five major utility companies operating

- as Industrial Reprocessing Group, amounting to in -

excess of $600,000 for investigating the reprocessing I

plant project and demonstrating its technical and economic feasibility.

, (2) The sum of $300,000 spent or committed in 1962 by Grace and the sum of $100,000 spent or committed in 1962 by AMF for further preparatory work in U connection with the project.

J The financing for the project will be secured as follows:

I l

Cash to be paid by Grace for its equity $ 6,000,000 i

i l

k Cash to be paid by AMF for its equity 2,000,000 Cash to be paid by Empire State Atomic Development Authority (Hereinafter described as ESADA) to g support the research and development aspects of

![

the Project (See Annex 4) 2,000,000 Bank loans (See Annex 5) 7,450,000 Land and Capital costs furnishe'd by ARDA to be amortized on a fifteen year term (See Annex 2) 8,500,000

, TOTAL $25,950,000 L

i ajg q;wgc

._. -a -

_ _a

(_'_____ __

p . ..

.. .- In addition, Applicant will acquire from the transfer to it of the Erwin, Tennessee facility of Grace:

Net Current Assets $1,039,000 Fixed Assets (net) 1,335,000 a

TOTAL $2,3716,000 Applicant will acquire from the. transfer to it of the Port Hope, Ontario facility of AMF:

Net Current Assets $ 209,000 Fixed Assets (net) 506,000

, ( TOTAL $ .715,000

(

Both the Erwin facility and the Port Hope facility are i , operating businesses which have realized profits in all recent years and to the best of the knowledge of Applicant will continue to a

operate profitably. It is estimated that the annual combined not income after taxes of the Port Hope and Erwin facilities will exceed

}

I

$200,000.

j Balance sheets of the Erwin and Port Hope facilities are

- ~

w attached as Annex 6.

A pro-forma consolidated balance sheet of Applicant as of commencement of construction of processing facilitius--assumed to be April 1, 1963--is set forth in Annex 7 While it is not possible at this time to anticipate

~

accurately the income which Applicant will derive from the processing 1

- plant, nevertheless the following highly tentative estimate has been made on the basis of 300 days of operation solely for the purpose of

' indicating the financial qualifications of the Applicant:

/

r, +*i r4

,i. . ' .

, 8 Sales (300 aays at $22,540 per day) $6,762,000

- Cost of Sales (Direct Labor and Sales, Direct Supplies and Overhead) 2,212,000 Gross Profit $4,550,000 Expenses Interest on loans, lease charges and f depreciation (15 years) $2,100,000 Other expenses, including contingency

' reserve 1,300,000

- 153,400,000

$1,150,000 NET INCOME (Pre Tax)

It is further estimated that cash flow after amortization of bank loans will exceed pre tax net income by $500,000 (after taxes).

This income and cash flow is in addition to the anticipated income

,of the Erwin, Tennessee and Port Hope, Ontario, facilities as r previously noted.

Applicant. intends to obtain nuclear liability insurance and other insurance coverage including workmen's compensation.

Further information concerning such coverage fill be furnished by

(' amendment.

Further information concerning the financial qualifications of Applicant,will be furnished by amendment upon Applicant obtaining a firm estimate of the cost of the project from Bechtel Corporation and from time to time thereafter in the event of further Revelopments

~

affecting Applicant's financial qualifications.

l The Applicant submits that it is financially qualified to engage in the construction and operation of the facility.

/

b iw .

r^ ..

2  %.- _ _ _ _ _ _ _ _ _ . _ - _ _ _ _ _ _ . _ _ _ _ . _ _ _ _ _ . _

7

(.

1 v (e

} ,.- .-

. DEBEVOIS E PLIM PTON, LYON S & GATES 320 PARK AVENUE

' NEW YORK 22 ru w er ev or.svoi.c c ..<c. ..ouco

' gg;,=,,

a . -..........

=::::=...

01 J ,- c

- e n- - -

gLE January 12, 1965 ,.,,'. ',' . .

v '"" " * " *

[:'$'..,f,,';5","[$1

,,,<.cc o

... c..<.o.

g

^~ "c'.*. " c" . ..

4 g '"" "*" USI T U "n.;n~D'.*,:.'."'l;A.

=, ;,- , c..< .........

c. c.v a . ..A.,..;f.. s ..

u

[Il- .A oca.reve cwvoan

• • • '*"*"^"

O N] g 1965 1s

.au. ....tre o. _

.",'=. - ,

"". ;' , .:U ^ " "  % *> *st 5 NC

/ CL .

% G -

Uqited States Atomic Energy Commissio

• 4 O

Wa ington 25, D. C. g Attention: Division of Q- d4 ([ L h Materials Licensing 4,g dj% --

In the Matter of Nuclear Fuel Services, Inc.

and  %

~

New York State Atomic and Space Development Authority Docket No. 50-201 Ello cop 3 Me (,,

Dear Sirs:

Submitted herewith for filing in he above '

(

matter are three signed originals and nineteen con

(- formed copies of Amendment No. 2 to the New York State Atomic and Space Development Authority's Application for Licenses. Also enclosed with these documents is my Cer-tificat'e of Service with respect to causing conformed copies of this Amendment No. 2 to be served on the ap-propriate individuals as set forth in the Certificate.

Very truly yours, w Eh Oscar M. Ruebhausen Enclosures

- .- - s hh[h

} I L Y' aw1 t~"

y~ k h:hyhill}ivi M #'

a,.m uh;;.$ y

- ..; y s ,. _,

.:...' . (_ c

.p ,

, BEFORE THE UNITED STATES ATOMIC EMERGY COMMISSION WASHINGTON, D. C.

In the Matter of NUCLEAR FUEL SERVICES, INC.

and DOCKET NO. 50-201 NEW YORK STATE ATOMIC - r.tle e'8 AND SPACE DEVELOPMENT AUTHORITY

[

9 g -

, 4 0 3 cc Az v1 3 e'

01 -

AMENDMENT NO. 2 -

A 4

To the Application for Licenses #'

of the N New York State Atomic and Space Development Authority C sN U ab:Na /,

USAEc r

11' JAN 13195 - .

arcam3, q g.jl January 12, 1965 G "" Wry

% a?

s96egf = _ _ -

11 9

c_ c

s -.

. Before the United States Atomic Energy-Commission Washington, D. C.

In the Matter of NUCLEAR FUEL SERVICES, INC.

and DOCKET NO. 50-201

(? NEW YORK STATE ATOMIC AND SPACE DEVELOPMENT AUTHORITY AMENDMENT NO. 2 To the Application for Licenses of the New York State Atomic and Space Development Authority

(' , The New York State Atomic and Space Development Authority (" Authority"), one of the applicants in this proceeding, herewith submits its Amendment No. 2 to its Application for Licenses filed on January 30, 1963, as amended by Amendment No. 1 filed on April 9, 1963 (the l " Application").

The purpose of this amendment is to update the

! Application so as, among other things, to reflect the change 1

1

, in the name of the Authority, in the composition of its members f * !' ,I5C

• Qfl,

~

-l.

c c and in its officers, as well as to supply current information

. concerning its financial qualifications and its contractual relationships with Nuclear Fuel Services, Inc., the other applicant in this proceeding.

1. Name of the Authority The name of the Authority was changed, effective September 1, 1964, from "New York State Atomic Research and Development Authority" to "New York State Atomic and Space

(? Development Authority" by Chapter 366 of the Laws of New York of 1964 (the "1964 Amendment").

The Act creating the Authority as amended by the 1964 Amendment is reproduced as an appendix to the Authority's Second Annual Report for the year ended March 31, 1964, a copy of which is attached hereto and made a part of the Application as Appendix F.

2. Business of the Authority

C. The 1964 Amendment expanded the purposes of the Authority to include the " active furtherance of space activitiec" for which the Authority has the same broad powers as those granted to it with respect to atomic en-ergy activities.

Space activities were defined by the 1964 Amend-ment as meaning

"(a) research into, and the solution of, problems of flight through, and use of, extra-terrestrial space; 1

2

+.ukiQ,p:yy

.. - , _ ; "_ _ y -

c (

"(b) the development, construction, test-

, ing, launch, operation and recovery of spacecraft;

"(c) scientific measurements and observa-tions through the use of space-related terrestrici systems or spacecraft; and

"(d) such other activities as may be required for, or related to, the exploration and use of extra-terrestrial space or the development and use of space-craft."

3. Members and Officers of the Authority -

In accordance with the 1964 Amendment, the

( .' statutorily authorized membership of the Authority now con-sists of five members to be appointed by the Governor, by and with the advice and consent of the Senate. The Chairman of the Authority (the chief executive officer) is a member of the Authority serving as Chairman at the pleasure of the Governor. All other officers of the Authority are appointed by the Authority.

The position, name, and business address 6T all u present members and officers of the Authority are set forth below:

Position Name Address Chairman and Oliver Townsend 230 Park Ave.,

Member New York, N. Y. 10017 Vice Chairman Whitworth Ferguson 230 Park Ave.,

and Member New York, N. Y. 10017 Member Lyle W. Hornbeck* 230 Park Ave.,

New York, N. Y. 10017

• Recess appointee subject to confirmation by the Senate.

,y 99 g ,;;

_3

(

f.' l [

Position Name Address General Manager Jon D. Anderson 230 Park Ave.,

New York, N. Y. 10017 Treasurer James B. Huff 230 Park Ave.,

New York, N. Y. 10017 Secretary Maurice Axelrad 230 Park Ave.,

New York, N. Y. 10017 All of the above named members and officers of the Authority are citizens of the United States. The positions

( .' of the fourth and-fifth members of the Authority are vacant at the present time.

4. Contractual Relationships with Nuclear Fuel Services, Inc.

On September 16, 1963, the Authority and Nuclear Fuel Services, Inc. (hereinafter referred to as "NFS")

entered into as of May 15, 1963, a Lease, Facilities Con-tract, and Waste Storage Agreement, all in accordance with

.the Outline of Terms dated as of June 29, 1962, desc'ribed

~

u in the Application.

Under the Lease, NFS leases from the Authority l a State-owned site known as the Western New York Nuclear Service Center (hereinafter referred to as the " Site"), con-sisting of 3,331 acres in the town of Ashford, Cattaraugus County, plus 14 additional acres in the town of Concord, Erie County, which were added to the Site on March 4, 1963 The Lease provides that portions of the Site may be re-captured by the Authority for other uses, subject to the approval of the Commission.

.+ ,s;),. , - 4

C C The Lease provides for the construction by NFS at the Site for its own account of a plant for the pro-cessing of irradiated fuel elements (the " Plant").

The initial term of the Lease extends until December 31, 1980. Until December 31, 1965 the basic net rental is $1 plus $2,200 per day for each revenue-producing day that the Plant operates prior to such time. Thereafter, I during the initial term, the basic net rental will be at the rate of $660,000 per annum.'

The Lease will be renewable for an additional ten-year period at the same rental and for a second renewal term of ten years at a rental of between $330,000 and

$990,000 per annum, based on a formula related to the then fair value of the leased land and facilities. The Lease will thenceforward be renewable for eight additional 10-year periods at an annual rental of 6% of the then fair value of.

t(L the land and facilities leased.

Under the Facilities Contract between NFS and the Authority, NFS is constructing for the Authority, at a price not to exceed $8,000,000, the irradiated fuel receiving and high-level waste storage facilities (the " Storage Facilities"),

and related site improvements which are owned by the Authority and which form an integral part of the complex'necessary for the processing of irradiated fuel elements at the Site.

5 p 4jypm

c c The principal construction subcontractor for Authority-owned facilities is the Bechtel Corporation of San Francisco. Bechtel Corporation also has the prime contract from NFS lor the construction of the Plant which is to be owned by NFS until the termination cf the Lease.

Certain Site improvements, however, including the Authority-owned railroad spur and water reservoir and supply systeh',

are being installed by other subcontractors under separate

{j contracts from NFS. The Authority-owned facilities are facilities which are believed by the Authority to be of the

~

character that would be required by the Authority to carry on waste and fuel storage operations if industrial spent fuel processing at the Site were to cease.

Under the Waste Storage Agreement, which is to be in effect until the expiration of the initial term of the Lease, NFS will operate and care fpr not only all of the (e initially-installed Storage Facilities, but also such additional facilities as may be constructed on the Site to meet the needs of the Plant and other users. Under cer-tain circumstances, however, the responsibility for such operation and care will be assumed by the Authority prior to the termination of the Waste Storage Agreement, subject to the licensing approval of the Atomic Energy Commission, 6

~

9/$;

+Q ,

.i.?

- . { {

and,.in that event, NFS will pay the Authority for its costs incurred in such current operation and care. In addition, NFS will in any event, pay to the Authority over the term of- the Waste Storage Agreement funds es-timated to be sufficient to cover the Authority's obligation to provide for the perpetual care of the accumulated waste products. These charges of the Authority are based on a formula related principally to the amount

(/ of capital invested in the facilities for storage of high-level wastes. The amounts to be paid by NFS to the t

Authority will create a fund which by 1980 is estimated to be four million to seven and one-half million dollars, depending upon the volume and type of wastes accepted for storage during the period. The Authority's perpetual waste-care charges are calculated to produce a fund sufficient, utilizing current-proven technology, to provide for,the

/

\m perpetual surveillance and maintenance of the wastes stored at the Site and to provide also for replacement of all liquid waste storage facilities approximately every 43 years.

Provision is also made in the Waste Storage Agree-ment for the storage of low-level solid radioactive wastes at the Site in facilities to be constructed by NFS but to be owned by the Authority. NFS will make payments to the Authority in respect of the low-level wastes buried at the 7

+: 9yslffgpig -

(

.-[

, . (

Site, other than low-level wastes resulting from the operation of the Plant. NFS is to be responsible for the operation and care of the low-level storage facilities during the term of the Waste Storage Agreement. Under certain circumstances, however, the responsibility for the operation and care of the low-level storage fa-cilities will be assumed by the Authority. In such an -

event, NFS will thereafter pay the Authority such charges

(,

as the Authority may establish f.or the low-level waste burial services rendered to NFS.

In November 1963, NFS began to bury at the Site low-level wastes under appropriate authorizations from agencies of the State of New York. As of November 30, 1964, approximately 200,621 cubic feet of solid waste materials had been received at the Site for burial.

NFS will own the high-level and low-level-wastes L stored at the Site pursuant to the Waste Storage Agreement in storage facilities for which NFS has the responsibility of operation and maintenance. Title to such wastes will vest in the Authority when such NFS responsibility ceases.

To assure continuity with respect to the perpetual care of waste products stored at the Site, the Authority entered into an agreement, dated March 21, 1963,. with the New York State Office of Atomic and Space Development, 8

../j@p. ge .,

~ c .

7.. ., c c providing that, in the event the Authority ceases to exist,

,. the Office, which is an agency of the State expressly au-thorized to assume such responsibility, will assume custody of the perpetual care fund, along with custody on behalf-of the State both of the Site and of any radioactive materials then stored at the Site. This agreement has previously been filed as Appendix B to the Application.

Copies of the Lease, Facilities Contract and

( Waste Storage Agreement (which constitute an aggregate of well over 200 printed pages) are not being filed with this Application since the Authority believes that the information set forth herein covers those aspects of the contractual relationships between the Authority and NFS which might be considered pertinent to the licenses being sought by the Authority. The Authority will supply such additional in-formation, if any, as may reasonably be requested by the e Commission with respect thereto.

5 Financial Qualifications Out of the sum of $9,300,0C0 appropriated to the l Authority under Section 6 of Chapter 133 of the 1962 Laws of New York, and subsequent reappropriations, the Authority

( allocated $8,000,000 for its expenditures under the Fa-cilities Contract. The cost to the Authority under such

, contract is guaranteed by NFS not to exceed $8,000,000.

l

9 l

I , m ., hp~.p. -4

> n , _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - - _ . _

~*

On December 15, 1964, the Authority borrowed an aggregate principal amount of $10,100,000 from three banks (the Manufacturers and Traders Trust Company, The Marine Trust Company of Western Neu York and the State Bank of Albany) and issued the Authority's 2.7% Notes due December 1, 1969 as evidence of its obligations to the banks. The-Notes are general obligations of the Au ,

thority and are unsecured except that the Authority has

( agreed to pledge as security for the payment of interest on the Notes during the years 1966 to 1969, inclusive, the first $68,175 out of each of the quarterly _ rental payments made by NFS under the Lease.

Immediately following this bank borrowing, the Authority, on December 16, 1964, repaid to the State of New York the entire portion of the $9,300,000 appropria-tion which had theretofore been drawn down by the Authority,

~ namely$7,214,$00. The balance of the bank borrowing is available to the Authority to complete payments that may become due to NFS under the Facilities Contract, to meet other obligations of the Authority, such as payments of interest on the Notes, and for its' general corporate pur-poses.

Financial Statements of the Authority for its last complete fiscal year, namely that ending on March 31, 1964, are included in Appendix F attached hereto, 10 Qidfg y qg

f.-

(

,  :: . c

6. Technical Information Pursuant to Section 50.34 of Part 50 of the Commission's Regulations, NFS has set forth technical in-formation in Part B of the NFS Application, dated July 25, 1962, and amendments thereto. The Authority hereby in-corporates by reference said Part B and all amendments thereto, to and including Submission No. 23 as filed by ,

NFS.

.'( '

Dated:

January 12, 1965 Respectfully submitted, NEW YORK STATE ATOMIC AND SPACE DEVELOPMENT AUTHORITY By Chairtfian M ,

( STATE OF NEW YORK COUNTY OF NEW YORK )

)

ss:

On this 12th day of January, 1965, before me personally came Oliver Townsend to me known and known to me to be the individual described in and who executed the foregoing instrument and acknowledged to me that he executed the same.

f 1- M xo Notary Public DOLORES M. POVERCMo f40tary Pud.:, State of New Yort No. 03-8422415 Ouf. bed in Bronx Ccunty Cornm-;on En pires March 30,1966 11

. ;7;59, e ~9: _

, ~ . _ _ _

( (

' , ' {. *

.r , . - - e CERTIFICATE OF SERVICE The undersigned, Oscar M. Ruebhausen, Attorney for the Applicant, the New York State Atomic and Space Development Authority, does hereby certify that he caused the attached Amendment No. 2 to the Application for Licenses of the,New York State Atomic and Space Development Authonity to be served on each of the following persons by causing a

{ conformed copy of the same to be deposited today in the United States mail properly stamped for first class mail and addressed to each of the l'ollowing:

(a) E. Scott Smith, County Clerk Cattaraugus County Little Valley New York (b) Bernhard G. Bechhoefer, Esq.

1710 H Street, N. W.

Washington 6, D. C.

/ (c) Mr. T. C. Runion, President

\s Nuclear Fuel Services, Inc.

P. O. Box 218 Erwin, Tennessee .

(d) Mr. Norman Fagnan Supervisor Town of Ashford West Valley, New York (e) Arthur Stambler, Esq.

1710 H Street N. W.

Washington 6, D. C.

l qw }h '

u,_ em q Oscar M. Ruebhausen Dated: January 12, 1965

EgQq- qx L cvM. ra t . . . . . .

--f-----