Escrow Agreement
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XAMPLE OF
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46 CFR 540.5(b)
NDER
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made as of this __ day of (month & year), by and
between (Customer), a corporation/company having a place of business at
(“Customer”)
__________ and (Banking Institution name & address)
a banking corporation, having a place of business at (“Escrow Agent”).
Witnesseth:
WHEREAS, Customer wishes to establish an escrow account in order to provide
for the indemnification of passengers in the event of non-performance of water
transportation to which such passengers would be entitled, and to establish Customer’s
financial responsibility therefore; and
WHEREAS, Escrow Agent wishes to act as Escrow Agent of the escrow account
established hereunder;
NOW, THEREFORE, in consideration of the premises and covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Customer has established on (month, & year) (the “Commencement Date”)an
escrow account with the Escrow Agent which escrow account shall hereafter be
governed by the terms of this Agreement (the “Escrow Account”). Escrow Agent shall
maintain the Escrow Account in its name, in its capacity as Escrow Agent.
2. Customer will determine, as of the date prior to the Commencement Date, the
amount of unearned passenger revenue, including any funds to be transferred from any
predecessor Escrow Agent. Escrow Agent shall have no duty to calculate the amount of
unearned passenger revenue. Unearned Passenger Revenues are defined as that
passenger revenue received for water transportation and all other accommodations,
services and facilities relating thereto not yet performed. 46 C.F.R. 540.2 (i).
3. Customer will deposit on the Commencement Date into the Escrow Account cash
in an amount equal to the amount of Unearned Passenger Revenue determined under
Paragraph 2 above plus a cash amount (“the Fixed Amount”) equal to (10 percent of the
Customer’s highest Unearned Passenger Revenue for the prior two fiscal years. For
periods on or after (year of agreement (2009)), the Fixed Amount shall be determined
by the Commission on an annual basis, in accordance with 46 CFR Part 540.
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