Escrow Agreement

United States Department of the Interior
Office of Surface Mining Reclamation and Enforcement
ESCROW AGREEMENT

Escrow Agreement No.____________
THIS AGREEMENT made and entered into this
day of ___________,
_____, by and between the United States, Office of Surface Mining Reclamation and
Enforcement, (herein called “OSM”), the
,a
National Banking Association (herein called “Bank”), and the
________________________________ (herein called “Operator”);
WITNESSETH:
WHEREAS, Operator has heretofore filed with OSM
_________________________
issued by
___________________________________________________________________
in compliance with the provisions of the Surface Mining Control and Reclamation Act of
1977, 30 U.S.C. 1201 et seq. (SMCRA),and the rules and regulations adopted pursuant to
that Act, in connection with Operator’s Permit No. _______________;
WHEREAS, pursuant to provisions of 30 CFR §800.21(d), Operator desires to
deposit into escrow Cash having a value of $ ____________________; Cash meaning
lawful currency of the United States of America; and
WHEREAS, Operator desires to engage Bank as a depository and escrow agent for
the purpose of taking custody of such Cash;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and the mutual benefits derived hereunder, it is agreed by and between the parties as
follows:
1. Upon execution of this agreement by the parties, Operator shall deposit with the
Bank,
, cash instruments having a face value of $
___________________
. Upon the Bank’s receipt of custody of such Cash from
the Operator, it shall confirm such receipt in writing to OSM.
2. Such Cash shall be held by the Bank for the purpose of assuring to OSM that the
Operator shall faithfully perform all the reclamation requirements specified in the mining
and reclamation plan or plans approved under Permit No.
.

Permit No._____________

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Escrow Agreement No.__________

3. The parties hereto recognize that OSM will periodically review the Operator’s
mining operation and may from time to time require increases in the reclamation bond
amount. The parties specifically agree that Operator may from time to time, as required by
OSM, increase the amount of Cash or bond to conform to the requirements of OSM
without the execution by all parties of a further agreement to reflect increases in bond
amount. Operator may, upon receipt of proper notice from OSM, increase the amount of
escrowed Cash to conform with OSM requirements upon written notice to OSM and Bank;
all additional Cash so escrowed and any increase in bond amounts shall be subject to all
terms, conditions and provisions of this Escrow Agreement.
4. The Bank shall receive all interest or income on such Cash and shall pay such
interest or income as and when received to Operator, in care of or as otherwise directed by
Operator in writing. The Bank shall not invest any portion of the funds in its possession or
control.
5. Upon receipt by OSM of Bank’s written confirmation that said Cash has been
deposited by Operator, the OSM shall execute and deliver to Operator, if desired, any and
all necessary documents and forms to allow Operator in its sole discretion to cancel or
terminate any bond being replaced by this Escrow Agreement, pursuant to 30 CFR §800.30.
6. In the event Operator violates the SMCRA, or any rules and regulations
promulgated thereunder, as the same applies to the reclamation requirements of Permit
No.
and fails to remedy or correct such violations, OSM shall institute forfeiture
proceedings against Operator in accordance with 30 CFR §800.50, and any implementing
procedures. Written notice of the forfeiture proceedings shall be furnished to the Bank by
OSM.
Upon receipt of certified and authenticated notice from OSM showing, 1) the
amount of bond declared forfeited; 2) that all legal or administrative remedies available to
Operator have been waived or exhausted and no action, proceeding or appeal is pending
thereon; and 3) that a final order of forfeiture has been entered, the Bank shall surrender to
OSM the requested portion of the Cash in its possession.
In the event the Bank shall for any reason fail, refuse or neglect to surrender the
requested amount of the Cash to OSM within ten (10) calendar days after receipt of notice
of forfeiture and demand for payment as herein above provided, the Operator agrees in such
an event or events to, 1) hold OSM free, harmless and indemnified of and from any cost,
expense or loss, actually incurred by reason of such refusal, including but not limited to
court costs and attorney’s fees, and 2) to pay unto OSM interest on the amount of the Cash
required to be surrendered at the highest legal rate authorized by United States law
computed from the date on which said Cash was required to be surrendered to and
including the date on which such Cash deposits are actually received by OSM.
7. This agreement shall be deemed terminated in whole or in part: 1) when and as
OSM certifies in writing to the Bank that the Operator has successfully completed of the
requirements of the surface mining and reclamation activities required under
Permit No.
, for which the Cash was posted; 2) when and as OSM certifies in
writing to the Bank that the Operator has provided a corporate surety bond, collateral or
self-bond, in substitution for and release of the Cash; or 3) when OSM otherwise authorizes
release of the Cash in whole or part to the Operator.
Permit No. __________________

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Escrow Agreement No. ____________

Until this agreement is terminated in whole or part, the Bank shall not release,
assign, transfer or deliver any of the Cash to Operator; or to any other party, PROVIDED,
HOWEVER, Operator shall have the right at any time to post a corporate surety bond,
collateral bond or, if qualified, a self-bond in substitution for and release of all or part of
said Cash upon the prior approval of OSM.
During each month of every calendar year this agreement is in force and effect, the
Bank shall report to OSM and Operator in writing the amount and value of the Cash then
on deposit.
Upon the complete termination of this agreement, the Bank shall deliver all said
Cash deposited hereunder to Operator or its nominee. Upon the partial termination of this
agreement, the Bank shall deliver to the Operator or its nominee the Cash held hereunder in
the amount certified in writing to the Bank by OSM as being the amount of reclamation
work which has been successfully completed, other bond substituted, or the amount
certified by OSM.
8. All notices required to be given by the Bank shall be effective when received by
the respective parties at their addresses specified below, namely:
Office of Surface Mining Reclamation and Enforcement
Address:
The
Address:

Company

or other address as such party may have furnished the Bank and to the other party in
writing. Any notice to the Bank shall be effective when received by the Bank addressed as
follows:
The
Bank
Trust Department
Attn.: Escrow Division
Escrow No. ____________
Personal delivery shall have the same effect as notice given by mail.

9. Operator agrees to pay the Bank its fees for its services, including, but not
limited to, the actual cost of legal services should the Bank deem it necessary to retain
counsel with respect to any matters pertaining to this instrument. The fees an escrow agent
shall be determined in accordance with, and shall be payable as specified in the Schedule of
Fees for Escrow Services dated _______________
, a receipt of which is hereby
acknowledged by Operator.
10. This agreement contains the entire agreement of the parties hereto with respect
to said Cash, and the Bank agrees to hold and dispose of said Cash delivered to it by the
Operator in accordance with the terms and conditions hereof. However, the Bank is not a
party to, nor bound by, any instrument or agreement other than this agreement, and the
Bank, as custodian of the Cash deposited within hereunder shall not be required to take
notice of any default or any other matter, nor be bound by or required to give any notice or
Permit No. __________________

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Escrow Agreement No. ____________

demand, nor be required to take any action whatsoever, except as hereinbefore provided.
11. The parties have satisfied themselves as to the authority of any persons signing
this agreement in a representative capacity. Should it be necessary for the Bank to accept
or act upon any instructions, directions, documents or instruments signed or issued by or on
behalf of any corporation, partnership, governmental entity, trade name, fiduciary or
individual, it shall not be necessary for the Bank to inquire into the authority of the
signer(s) unless and to the extent expressly provided in this agreement.
12. This agreement may be altered or amended only with the consent of the parties
and with the consent of the Bank. Should the parties attempt to change this agreement in a
manner which, in the Bank's sole discretion, is deemed undesirable, the Bank may resign as
escrow agent by notifying the parties in writing; otherwise, the Bank may resign as escrow
agent at any time upon thirty (30) days prior notice to OSM. In the case of Bank escrow
agent resignation, the only duty of the Bank, until a successor escrow agent shall have been
appointed and shall have accepted such appointment, shall be to hold and dispose of the
Cash in accordance with the original provisions contained in this agreement (but without
regard to any notices, request, instructions or demands received by the Bank from either or
both of the parties after the notice of resignation shall have been given, unless the same
shall be a direction by both parties that the entire funds be paid or delivered out of escrow).
13. Operator warrants to and agrees with the Bank and OSM that, unless otherwise
expressly set forth in this agreement, there is no security interest in the Cash fund or any
part thereof; no financing statement under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing (whether specifically or generally)
the Cash fund or any part thereof; and the Bank and OSM shall have no responsibility at
any time to ascertain whether or not any security interest exists in the Cash fund or any part
thereof or to file any financing statement under the Uniform Commercial Code with respect
to the Cash fund or any part thereof.
14. Bank warrants to and agrees with the Operator and OSM that the Cash fund is
federally insured and made payable upon demand to OSM in accordance with section 6 of
this agreement.

__

IN WITNESS WHEREOF; the parties have hereunto set their hands and seals this
day of ________________________, ________.
BY: ________________________________
BY: ________________________________
THE

__________COMPANY

OPERATOR:__________________________
BY:_________________________________
(President)

Permit No. __________________

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Escrow Agreement No. ____________

ATTEST:
____________________________________________
Secretary
_____________________________

(Affix Corporate Seal)

BANK

BY:_________________________________________
Title

ATTEST:
The foregoing instrument was acknowledged, subscribed and sworn to before me
this
___ day of _____________________, ______ , by__________
_____________ .

and

WITNESS my hand and official seal.
_________________________________
NOTARY PUBLIC
My Commission Expires:_____________________________________
THE STATE OF _________________________
COUNTY OF ___________________________

Paperwork Reduction Act Notice
We use the information required by this form to ensure that the requirements for posting cash accounts as a
collateral bond under 30 CFR 800.21 are met. You must provide the requested information to obtain a benefit
(a collateral bond that relies upon cash accounts). Under 30 CFR 842.16, the information collected is a matter
of public record.
The time needed to complete this form and submit the requested information will vary depending on
individual circumstances. We estimate that the average time will be 10 hours per response. This number
includes the time spent reviewing instructions, learning about the regulations, gathering and maintaining
information, and completing and reviewing the form. If you have comments concerning the accuracy of this
estimate or suggestions for simplifying the form or instructions, you may write to the Information Collection
Clearance Officer, Office of Surface Mining Reclamation and Enforcement, Room 202 SIB, 1951
Constitution Ave, NW, Washington, D.C. 20240.
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), you are not required to respond to, nor
will you be subject to a penalty for a failure to comply with, a collection of information unless it displays a
currently valid OMB control number.
OMB Control No. 1029-0043; expires 7/31/2012

Permit No. __________________

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Escrow Agreement No. ____________