• As a matter of law, an ITR constitutes a valid escrow instrument. 
• Black's Law Dictionary (8th ed. 2004), defines “escrow” as “a legal document or property delivered by a promisor to a third party to be held by the third party for a given amount of time or until the occurrence of a condition, at which time the third party is to hand over the document or property to the promisee.” 
• As set forth in Restatement (Second) of Contracts § 103 cmt. a (1979), “Like ‘scroll’ and ‘scrawl,’ the word ‘escrow’ is derived from the Norman-French word for a writing or a written instrument.
       -- It has come, in practice, to refer to a security device: one or both parties to a transaction deposit property or an instrument with a third party until some condition has occurred.
       -- The property or instrument may be referred to as ‘the escrow’; the delivery is said to be ‘in escrow.’”
• The essential elements of a valid escrow arrangement are:
       -- a contract between grantor and trustee agreeing to conditions of a deposit,
       -- delivery of deposited item to a third party, and
       -- communication of agreed upon conditions to third party.  Johansson v. US, 336 F.2d 809 (5^th Cir. 1964). 
• Case law has defined and clarified an escrow
       -- An escrow is something more than contract, being a method of conveying property, and when property is delivered in escrow the depositor loses control over it and an interest in the property passes to ultimate grantee under the escrow agreement.  Matter of Newcomb, 744 F.2d 621, 624 (8^th Cir. 1984).
       -- See also Carl v. Republic Security Bank, 282 F.Supp.2d 1358, 1367 (S.D. Fla. 2003) (“An escrow account is defined as ‘[a] bank account, generally held in the name of the depositor and an escrow agent, that is returnable to the depositor or paid to a third person on the fulfillment of specified conditions.’  BLACK'S LAW DICTIONARY 18 (7th ed.1999)”); Gulf Petroleum, S.A. v. Collazo, 316 F.2d 257, 261 (S.D.N.Y. 1993) (“’Escrow’ is now commonly used with respect to all written instruments as well as the deposit of money.”);
       -- See also 99 Commercial Street, Inc. v. Goldberg, 811 F.Supp. 900, 905-06 (S.D.N.Y. 1993)  (“An escrow is generally defined as a written instrument entrusted by a grantor to a third party agent or trustee who, in accordance with instructions, subsequently delivers the instrument to the grantee once certain conditions are met. . . . Escrow agreements are contracts that ensure performance of prior obligations between parties. . . . Once funds or documents are deposited with the escrow agent, the grantor loses control over the instruments, and the grantee does not obtain title until the condition is satisfied. . . . In a very real sense, ownership is held in stasis, the instrument available neither to grantor nor grantee, awaiting disposition by the agent in accordance with the terms of the agreement.   Absent dissolution of the trust by consent of both parties, abandonment of a claim against the trust, violation of a condition by the grantee, or compliance with the conditions, the escrow continues in effect.”)
• “Trust,” in turn, is defined almost identically as “the right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title; a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary).”  Black's Law Dictionary (8th ed. 2004).
       -- Just like an escrow instrument, a valid trust involves specific property, reflects the settlor’s (promisor’s) intent, and is created for a lawful purpose.
       -- A fiduciary relationship regarding property and charging the person with title to the property with equitable duties to deal with it for another’s [the promisee’s] benefit; the confidence placed in a trustee/third party, together with the trustee’s/third party’s obligations toward the property and the beneficiary/promisee.
       -- Stated otherwise, “[A] trust involves three elements, namely,
            --- a trustee, who holds the trust property and is subject to equitable duties to deal with it for the benefit of another;
            --- a beneficiary, to whom the trustee owes equitable duties to deal with the trust property for his benefit;
            --- trust property, which is held by the trustee for the beneficiary.”  Restatement (Second) of Trusts § 2 cmt. h (1959).
       -- An irrevocable trust is one that cannot be terminated by the settlor once it is created.  Black's Law Dictionary (8th ed. 2004).
• Pursuant to the Restatement (Second) of Contracts § 103, escrow occurs when, inter alia, “(1) [a] written promise is delivered in escrow by the promisor when he puts it into the possession of a person other than the promisee without reserving a power of revocation and manifests an intention that the document is to take effect according to its terms upon the occurrence of a stated condition but not otherwise.”
       -- Comment b of the Restatement (Second), Effect of delivery in escrow, provides “[w]here the owner manifests an intention that the transferee is to hold the property in trust, a trust may be created at the time of the delivery in escrow. See Restatement, Second, Trusts § 32, Comment d.”  (Emphasis added.)

FSA's affiliate trust’s ITR authorizes the Owner as the beneficiary/Obligee to collect against the trust assets, and FSA's affiliate trust does have a legally binding obligation to pay the Owner as stated in the ITR if there is a default. 

Most important is that the assets in the trust itself remain inviolate. 

• All of the trust’s assets administered by FSA's affiliate trust as Trustee are held in state federal or country financial institutions. 

In contrast, FSA's affiliate trust, as Trustee, is required to place pledged assets, via an Escrow Pledge Request and the ITR itself, on hold for the duration of the ITR unless it is returned. 

• In essence, the trust is an escrow agreement and the ITR evidences that fact and identifies the role of the Trustee. 
• If the Owner does not return the ITR in question, it is deemed accepted by the Owner. 
• FSA's affiliate trust must place specific Trust assets on hold when providing an ITR. 

This should be compared to a bank, which places a hold for the amount of a Letter of Credit against its general fund, which may include assets that are speculative in nature.