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PART II, Section F FINANCIAL RESPONSIBILITY <br />Demonstration of Financial Responsibility. (Condition 1) <br />The permittee is required to maintain continuous financial responsibility and resources to <br />close, plug and abandon the injection well as provided in the plugging and abandonment plan. <br />(a) American Soda has chosen to demonstrate financial responsibility through a <br />Standby Trust Agreement and a SAFECO Inswance Company of America Swety <br />Performance Bond (issued to American Soda, L.L.P., the well operator), in the <br />amount sufficient to plug and abandon the well. As deemed appropriate, the <br />Director may require the operator to provide information updating the plugging <br />plan and associated costs. At a minimum, such a review will be made during the <br />five year review of the Permit. The performance Bond which names EPA as <br />beneficiary in the event of pernuttee default on the plugging and abandonment <br />requirements and is hereby incorporated as part of this permit. The Standby Trust <br />Agreement established by the permittee shall remain in effect for the dwation of <br />this permit, unless part (b), below, has been complied with. <br />(b) The permittee may, upon written request to EPA, change the type of financial <br />mechanism or instrument utilized. A change in demonstration of financial <br />responsibility must be approved by the Director. A minor permit modification will <br />be made to reflect any change in financial mechanisms, without further opportunity <br />for public comment. <br />Insolvenckof Financial Institution. <br />(Condition 2) <br />In the event that an alternate demonstration of financial responsibility has been approved <br />under (b) above, the pennittee must submit an alternate demonstration of financial responsibility <br />acceptable to the Director within sixty (60) days after either of the following events occw: <br />(a) The institution issuing the trust or financial instrument files for bankruptcy; or <br />(b) The authority of the trustee institution to act as trustee, or the authority of the <br />institution issuing the financial instnument, is suspended or revoked. <br />Cancellation of Demonstration by Financial Institution. <br />(Condition 3) <br />The permittee must submit an alternative demonstration of financial responsibility <br />acceptable to the Director, within sixty (60) days after the institution issuing the trust or financial <br />instrument serves 120-day notice to the EPA of their intent to cancel the trust or financial <br />instrument. <br />Statement of Basis for EPA Permit No. CO 10932-04664 Page 18 of 18 <br />