Guarantee

1. An owner or operator may satisfy the requirements of section 33.1-24-08-83 by obtaining a guarantee that conforms to the requirements of this section. The guarantor must be: a. A firm that: (1) Possesses a controlling interest in the owner or operator; (2) Possesses a controlling interest in a firm described under paragraph 1 of subdivision a of subsection 1; or (3) Is controlled through stock ownership by a common parent firm that possesses a controlling interest in the owner or operator; or b. A firm engaged in a substantial business relationship with the owner or operator and issuing the guarantee as an act incident to that business relationship. 2. Within one hundred twenty days of the close of each financial reporting year the guarantor must demonstrate that it meets the financial test criteria of section 33.1-24-08-85 based on year-end financial statements for the latest completed financial reporting year by completing the letter from the chief financial officer described in subsection 4 of section 33.1-24-08-85 and must deliver the letter to the owner or operator. If the guarantor fails to meet the requirements of the financial test at the end of any financial reporting year, within one hundred twenty days of the end of that financial reporting year the guarantor shall send via certified mail, before cancellation or nonrenewal of the guarantee, notice to the owner or operator. If the department notifies the guarantor that the guarantor no longer meets the requirements of the financial test of subsections 2 or 3 and 4 of section 33.1-24-08-85, the guarantor must notify the owner or operator within ten days of receiving such notification from the department. In both cases, the guarantee will terminate no less than one hundred twenty days after the date the owner or operator receives the notification, as evidenced by the return receipt. The owner or operator must obtain alternative coverage as specified in subsection 3 of section 33.1-24-08-104. 3. The guarantee must be worded as follows, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted: GUARANTEE Guarantee made this [date] by [name of guaranteeing entity], a business entity organized under the laws of the state of [name of state], herein referred to as guarantor, to the department and to any and all third parties, and obligees, on behalf of [owner or operator] of [business address]. Recitals. (1) Guarantor meets or exceeds the financial test criteria of subsections 2 or 3 and 4 of section 33.1-24-08-85 and agrees to comply with the requirements for guarantors as specified in subsection 2 of section 33.1-24-08-86. (2) [Owner or operator] owns or operates the following underground storage tank(s) covered by this guarantee: [List the number of tank(s) at each facility and the name(s) and address(es) of the facility(ies) where the tanks are located. If more than one instrument is used to assure different tanks at any one facility, for each tank covered by this instrument, list the tank identification number provided in the notification submitted pursuant to section 33.1-24-08-12, and the name and address of the facility. This guarantee satisfies sections 33.1-24-08-80 through 33.1-24-08-106 requirements for assuring funding for [insert: "taking corrective action" and/or "compensating third parties for bodily injury and property damage caused by" either "sudden accidental releases" or "nonsudden accidental releases" or "accidental releases"; if coverage is different for different tanks or locations, indicate the type of coverage applicable to each tank or location] arising from operating the above-identified underground storage tank(s) in the amount of [insert dollar amount] per occurrence and [insert dollar amount] annual aggregate. (3) [Insert appropriate phrase: "On behalf of our subsidiary" (if guarantor is corporate parent of the owner or operator); "On behalf of our affiliate" (if guarantor is a related firm of the owner or operator); or "Incident to our business relationship with" (if guarantor is providing the guarantee as an incident to a substantial business relationship with owner or operator)][owner or operator], guarantor guarantees to the department and to any and all third parties that: In the event that [owner or operator] fails to provide alternative coverage within sixty days after receipt of a notice of cancellation of this guarantee and the department has determined or suspects a release has occurred at an underground storage tank covered by this guarantee, the guarantor, upon instructions from the department shall fund a standby trust fund in accordance with the provisions of section 33.1-24-08-102, in an amount not to exceed the coverage limits specified above. In the event that the department determines that [owner or operator] has failed to perform corrective action for releases arising out of the operation of the above-identified tank(s) in accordance with sections 33.1-24-08-50 through 33.1-24-08-57, the guarantor upon written instructions from the department shall fund a standby trust in accordance with the provisions of section 33.1-24-08-102, in an amount not to exceed the coverage limits specified above. If [owner or operator] fails to satisfy a judgment or award based on a determination of liability for bodily injury or property damage to third parties caused by ["sudden" and/or "nonsudden"] accidental releases arising from the operation of the above-identified tank(s), or fails to pay an amount agreed to in settlement of a claim arising from, or alleged to arise from, such injury or damage, the guarantor, upon written instructions from the department, shall fund a standby trust in accordance with the provisions of section 33.1-24-08-102 to satisfy such judgment(s), award(s), or settlement agreement(s) up to the limits of coverage specified above. (4) Guarantor agrees that if, at the end of any fiscal year before cancellation of this guarantee, the guarantor fails to meet the financial test criteria of subsections 2 or 3 and 4 of section 33.1-24-08-85, guarantor shall send within one hundred twenty days of such failure, by certified mail, notice to [owner or operator]. The guarantee will terminate one hundred twenty days from the date of receipt of the notice by [owner or operator], as evidenced by the return receipt. (5) Guarantor agrees to notify [owner or operator] by certified mail of a voluntary or involuntary proceeding under Title 11 (Bankruptcy) United States Code naming guarantor as debtor, within ten days after commencement of the proceeding. (6) Guarantor agrees to remain bound under this guarantee notwithstanding any modification or alteration of any obligation of [owner or operator] pursuant to chapter 33.1-24-08. (7) Guarantor agrees to remain bound under this guarantee for so long as [owner or operator] must comply with the applicable financial responsibility requirements of sections 33.1-24-08-80 through 33.1-24-08-106 for the above-identified tank(s), except that guarantor may cancel this guarantee by sending notice by certified mail to [owner or operator], such cancellation to become effective no earlier than one hundred twenty days after receipt of such notice by [owner or operator], as evidenced by the return receipt. (8) The guarantor's obligation does not apply to any of the following: (a) Any obligation of [insert owner or operator] under a workers' compensation, disability benefits, or unemployment compensation law or other similar law; (b) Bodily injury to an employee of [insert owner or operator] arising from, and in the course of, employment by [insert owner or operator]; (c) Bodily injury or property damage arising from the ownership, maintenance, use, or entrustment to others of any aircraft, motor vehicle, or watercraft; (d) Property damage to any property owned, rented, loaned to, in the care, custody, or control of, or occupied by [insert owner or operator] that is not the direct result of a release from a petroleum underground storage tank; or (e) Bodily injury or property damage for which [insert owner or operator] is obligated to pay damages by reason of the assumption of liability in a contract or agreement other than a contract or agreement entered into to meet the requirements of section 33.1-24-08-83. (9) Guarantor expressly waives notice of acceptance of this guarantee by the department, by any or all third parties, or by [owner or operator]. I hereby certify that the wording of this guarantee is identical to the wording specified in subsection 3 of section 33.1-24-08-86 as such rules were constituted on the effective date shown immediately below. Effective date: __________________ [Name of guarantor] [Authorized signature for guarantor] [Name of person signing] [Title of person signing] Signature of witness or notary: ______________________________ 4. An owner or operator who uses a guarantee to satisfy the requirements of section 33.1-24-08-83 must establish a standby trust fund when the guarantee is obtained. Under the terms of the guarantee, all amounts paid by the guarantor under the guarantee will be deposited directly into the standby trust fund in accordance with instructions from the department under section 33.1-24-08-102. The standby trust fund must meet the requirements specified in section 33.1-24-08-93.