A good faith deposit is an initial sum paid by a buyer to demonstrate their genuine intent to complete a transaction and secure the terms of a contract. This deposit is typically credited towards the total purchase price upon successful completion of the agreement or may be forfeited if the buyer fails to fulfill their obligations.
The parties agree to lock the rate for the fixed rate Loan to be issued under the Master Agreement upon receipt of a 2.00% good faith deposit based on the Initial Advance for each fixed rate Loan in accordance with the above terms. Sponsor acknowledges that, upon Sponsor’s instruction to Rate Lock, Lender will also promptly lock the rate on the Initial Advance. Borrower and Sponsor acknowledge that the Rate Lock cannot occur until legal counsel to Fannie Mae has confirmed that all Rate Lock conditions have been satisfied. Borrower and Sponsor further acknowledge that if Rate Lock occurs and Lender fails to close and deliver the Initial Advance on or before the Closing Deadline, Fannie Mae will suffer substantial damages for locking the rate and taking a position in the financial market under a corresponding MBS transaction, and Fannie Mae will seek reimbursement of its damages from Lender. Should the Initial Advance not close for any reason other than arising from Lender’s sole default, or if Lender is unable to satisfy any post-delivery purchase conditions raised by Fannie Mae which requires action or cooperation from Borrower that Borrower does not fulfill (and Lender has otherwise used good faith efforts to close), Borrowers and Sponsor will be liable for all actual damages suffered by Lender and Fannie Mae and any Fannie Mae MBS investor relating to interest rate and other breakage costs incurred in connection with such Rate Lock together with all enforcement costs and expenses incurred by Lender and Fannie Mae in collecting such damages (including without limitation, actual and documented out of pocket third party fees and costs and reasonable and documented out of pocket legal fees and expenses incurred in connection with such enforcement). Lender shall apply the Good Faith Deposit to payment of such damages, plus Lender’s documented out of pocket expenses described above, and Borrower and Sponsor will be liable for any deficiency which will be immediately payable upon Lender’s demand therefor. Lender may also assign to Fannie Mae any claim for such damages that Lender may have against Borrower and Sponsor. The Lender will credit to the Borrower the full amount of the Good Faith Deposit at Closing. Any return of the Good Faith Deposit to Borrowers prior to Lender’s assertion of a claim for damages does not affect Borrower’s and Sponsor’s obligations hereunder.
(b) Good Faith Deposit: Each Bid must be accompanied by a deposit (a “Good Faith Deposit”) submitted by wire transfer of immediately available funds to an account of the Debtor that is not subject to any liens or claims; provided that a Bidder may have its Good Faith Deposit held in escrow pursuant to a prearranged escrow agreement that is reasonably acceptable to the Debtor. Each Good Faith Deposit must equal the amount of ten percent (10%) of the purchase price contained in the Modified Purchase Agreement (as defined below).
7) Good Faith Deposit(s) No later than three (3) business days after the Auction, the Debtors (or the Escrow Agent) shall return to each Qualified Bidder(s) other than the Winning Bidder(s) and the Backup Bidder(s) their respective Good Faith Deposit(s). If a Winning Bidder fails to consummate an approved sale because of a breach or failure to perform on the part of such Winning Bidder, the Debtors will not have any obligation to return the Good Faith Deposit deposited by such Winning Bidder, which may be retained by the Debtors as liquidated damages, in addition to any and all rights, remedies and/or causes of action that may be available to the Debtors at law or in equity, and, the Debtors shall be free to consummate the applicable Proposed. Transaction with the applicable Backup Bidder, without the need for an additional hearing or order of the Bankruptcy Court. Notwithstanding any provision hereof, the terms pertaining to (a) any good faith deposit submitted by the Stalking Horse Bidder pursuant to the Stalking Horse Agreement (including, without limitation, the entitlements of the Stalking Horse Bidder and Debtors to such good faith deposit and the timing of return of any good faith deposit to the Stalking Horse Bidder) and (b) any rights, remedies and causes of action of the Stalking Horse Bidder and the Debtors against one another shall be governed by the terms of the Stalking Horse Agreement, the Stalking Horse Deposit Escrow Agreement and the Bidding Procedures Order.
(a)Good Faith Deposit. Upon execution of this Agreement, Buyer shall deliver to Sellers the amount of One Hundred Thousand Dollars ($100,000.00), which equals 10% of the Purchase Price, by wire transfer in immediately available federal funds, representing the good faith deposit required by the Bidding Procedures Order (the “Good Faith Deposit”), which wire transfer shall be deposited with Signature Bank and held in trust in a bank account, pursuant to an escrow agreement dated as of June 10, 2020 (the “Escrow Agreement”) between the Company and Signature Bank as the parties’ mutually-designated escrow agent thereunder (in such capacity, the “Escrow Agent”). The Good Faith Deposit shall be distributed to either Buyer or Sellers as follows: (i) if the Closing shall occur, then the Good Faith Deposit, together with all accrued investment income or interest thereon, shall be applied towards the Purchase Price and shall be paid to Sellers; and (ii) if the Closing does not occur and/or this Agreement is terminated, then, unless this Agreement is terminated by Sellers pursuant to clause (i) of Section 9.1(c) below, the Good Faith Deposit, together with all accrued investment income or interest thereon, shall be returned to Buyer as soon as practicable, but no later than two (2) Business Days following termination of the Agreement.
The Company paid a good faith deposit of $23,110 to the Bank on June 3, 2020, which amounts shall be applied toward the Bank Expenses (as defined the Loan and Security Agreement) payable on the Closing Date and, if any good faith deposit is remaining thereafter it shall be refunded to the Company. The Company may voluntarily prepay the Term Loan in full, but not in part prior to its scheduled maturity date (whether by voluntary prepayment, mandatory prepayment or otherwise) a prepayment premium equal to 1.00% of the outstanding principal will apply for the duration of the loan. Borrower shall maintain at all times unrestricted cash and cash equivalents in an amount equal to or greater than three times Borrower’s monthly cash burn amount. Monthly cash burn is defined as: for any period of determination, Borrowers’ monthly net income, plus amortization and depreciation and calculated on a trailing six-month basis, plus the monthly average of the current portion of principal on interest-bearing liabilities due and payable in the immediately succeeding three-month period. The obligations under the Loan and Security Agreement are secured by a first priority security interest in all assets of the Borrower, excluding intellectual property. Intellectual property shall be subject to a double negative pledge.
(h) Good Faith Deposit. Borrower has paid to Bank (on May 14, 2021) a good faith deposit of Twenty-Five Thousand Dollars ($25,000) (the “Good Faith Deposit”) to initiate Bank’s due diligence review process. Any portion of the Good Faith Deposit not utilized to pay Bank Expenses on the Fifth Amendment Effective Date shall be credited to the Designated Deposit Account.
SECTION 2.08 Good Faith Deposit. (a) No later than one (1) Business Day following the date of this Agreement, Buyer shall deposit (or cause to be deposited) in a trust account maintained on behalf of Seller (and to be designated by Seller prior to the date hereof) cash in an amount that, when combined with the Good Faith Deposit as defined in, and payable under, the Joe’s APA, equals $4,850,000 (the “Good Faith Deposit”) to be held in escrow in accordance with the terms of this Agreement, to be released as provided in Section 2.08(b). (b) If the Closing occurs, the Good Faith Deposit (and any interest accrued thereon) shall be transferred to and retained by Seller at the Closing as a credit against the Closing Cash Consideration. If this Agreement is terminated in accordance with the terms hereof, the Good Faith Deposit (together with any interest accrued thereon) shall be treated in the manner set forth in Section 10.02(b).
(h) 2020 Good Faith Deposit. Borrower has paid to Bank a deposit of Thirty Thousand Dollars ($30,000.00) (the “2020 Good Faith Deposit”), to initiate Bank’s due diligence review process. The 2020 Good Faith Deposit shall be utilized toward the payment of Bank Expenses on the Second Amendment Effective Date; and”
SECTION 2.09 Good Faith Deposit. (a) No later than one (1) Business Day following the date of this Agreement, Buyer shall deposit (or cause to be deposited) in a trust account maintained on behalf of Seller (and to be designated by Seller prior to the date hereof) cash in the amount of $4,095,358.20 (the “Good Faith Deposit”) to be held in escrow in accordance with the terms of this Agreement and to be released as provided in Section 2.09(b). (b) If the Closing occurs, the Good Faith Deposit (and any interest accrued thereon) shall be transferred to and retained by Seller at the Closing as a credit against the Cash Consideration. If this Agreement is terminated in accordance with the terms hereof, the Good Faith Deposit (together with any interest accrued thereon) shall be treated in the manner set forth in Section 10.02(b).
Section 2.2 Good Faith Deposit. (a) Concurrently with the execution and delivery of this Agreement, notwithstanding anything to the contrary in this Agreement, Buyer shall pay to Seller the amount of Three Million United States Dollars (US$3,000,000) by wire transfer of immediately-available funds (the “Good Faith Deposit”). The Good Faith Deposit shall not be subject to any Lien, attachment, trustee process or any other judicial process of any creditor of either of Seller or Buyer and shall be deposited in a segregated deposit account of Seller and held in trust to be administered solely in accordance with the terms of this Agreement and the Bidding Procedures Order. Upon the Closing, the Good Faith Deposit shall be an Excluded Asset and shall not be subject to any restrictions under this Agreement. (b) If the Closing occurs, the Gross Closing Cash Payment shall be reduced by the amount of the Good Faith Deposit (such resulting amount, the “Net Closing Cash Payment”), to be paid and delivered in accordance with Section 3.3(a). (c) If this Agreement is terminated pursuant to Section 10.1, the Good Faith Deposit shall be repaid to Buyer or retained by Seller in the amounts and at the times set forth in Section 10.2(a) through Section 10.2(c). (d) Buyer (or Affiliate thereof) shall be entitled to deduct and withhold, and Buyer (or Affiliate thereof) shall deduct and withhold, any amounts that it is required to deduct and withhold pursuant to any provision of applicable Tax Law in connection with any payments required to be made by Buyer (or Affiliate thereof) pursuant to the terms of this Agreement. To the extent that amounts are so withheld by Buyer (or Affiliate thereof), such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person otherwise entitled to receive such payments pursuant to this Agreement.
If this Letter Agreement correctly reflects your understanding, please sign this Letter Agreement where indicated and return it to the Bank, along with a $25,000.00 payment done via an email authorization to debit the Borrower's account with the Bank, representing a good faith deposit, which will be non-refundable and applied towards the Bank's legal fees incurred. Acceptance of the outlined proposal along with submission of a good faith deposit in the amount of $25,000 must be submitted to the Lender on or before Monday November 8, 2021 at 11:00 a.m.
Fees A refundable good faith deposit of one-half percent (0.50%) to one percent (1%) is required at the time the Trust issues a financing commitment
“Additional Good Faith Deposit” is the fully earned and non-refundable deposit in the amount of Twenty Thousand Dollars ($20,000.00), received by Lender prior to the advance of any Tranche B Loan, which will be applied toward Lender’s Expenses on the First Amendment Effective Date.
2.6 Good Faith Deposit; Legal and Closing Expenses; and Commitment Fee. (a) Good Faith Deposit. Borrower has delivered to Lender a good faith deposit in the amount of [* *** *** *** *** *** *** ******] (the “Good Faith Deposit”). The Good Faith Deposit paid to Lender will be credited to the Commitment Fee payable to the Lender. If the Funding Date does not occur, Lender shall retain the Good Faith Deposit as compensation for its time, expenses and opportunity cost, without further recourse to the Borrower. [Amount redacted for competitive reasons] (b) Legal, Due Diligence and Documentation Expenses. Concurrently with its execution and delivery of this Agreement, Borrower shall pay to Lender all of Lender’s reasonable legal, due diligence and documentation expenses in connection with the negotiation and documentation of this Agreement and the Loan Documents. (c) Commitment Fee. Borrower shall pay, concurrently with its execution and delivery of this Agreement, a commitment fee to Lender in the amount of [** *** *** *** *** *** *****] (the “Commitment Fee”). The Commitment Fee shall be paid by Borrower as set forth in the Funding Certificate. The Commitment Fee shall be retained by the Lender and be deemed fully earned upon receipt. [Amount redacted for competitive reasons]
2.6 Good Faith Deposit; Legal and Closing Expenses; and Commitment Fee. (a) Good Faith Deposit. Borrower has delivered to Lender a good faith deposit in the amount of One Hundred Thousand Dollars ($100,000) (the “Good Faith Deposit”). The Good Faith Deposit paid to Lender will be credited to the Commitment Fee payable to the Lender. If the Funding Date does not occur, Lender shall retain the Good Faith Deposit as compensation for its time, expenses and opportunity cost.
2.6 Good Faith Deposit; Legal and Closing Expenses; and Commitment Fee. (a) Good Faith Deposit. Borrower Representative has delivered to Lender a good faith deposit in the amount of One Hundred Twenty-Five Thousand Dollars ($125,000) (the “Good Faith Deposit”). The Good Faith Deposit paid to Lender will be credited to the Commitment Fee payable to the Lender. If the initial Funding Date does not occur because the Co-Borrowers do not elect to proceed with the Loans, Lender shall retain the Good Faith Deposit as compensation for its time, expenses and opportunity cost. If the initial Funding Date does not occur as a result of Lender’s due diligence or underwriting process, Lender shall deduct Lender’s Expenses and promptly return the balance of the Good Faith Deposit to the Co-Borrowers.
A Good Faith Deposit is a sum of money provided by a buyer to demonstrate their serious intent to complete a transaction. It is sometimes referred to as good faith money in real estate, as it signifies the buyer’s sincerity in moving forward with a deal. Typically held in escrow, this good faith payment assures the seller that the buyer is committed to finalizing the agreement. Upon closing, the deposit is usually applied to the fixed contract price, reducing the final amount the buyer owes.
Whether or not a good faith deposit is refundable depends on the terms of the agreement. In many cases, if the buyer meets all the conditions of the contract, including good faith efforts to obtain loan approval, the deposit is applied toward the purchase. However, if the buyer backs out without justifiable cause, the seller may keep the deposit as compensation.
The good faith payment meaning revolves around trust and commitment. It demonstrates the buyer’s genuine intent to proceed with the transaction, reassuring the seller that the buyer is serious. In real estate, this deposit is also known as a real estate good faith deposit, often requested when purchasing property to ensure both parties are dedicated to the deal.
A Good Faith Deposit is particularly useful in high-value transactions to signal commitment, especially in the following scenarios:
Providing a deposit builds confidence and facilitates smoother negotiations, demonstrating that you are invested in seeing the deal through.
When drafting a contract that includes a Good Faith Deposit, follow these key steps:
Buyer agrees to provide a Good Faith Deposit of $5,000 via cashier’s check within 48 hours of signing this agreement. This good faith payment will be held in escrow and applied toward the purchase price at closing. If the buyer fails to fulfill the terms of the contract, the deposit will be forfeited to the seller.
A Good Faith Deposit is a standard element in several types of agreements:
By including a Good Faith Deposit, both parties are better protected, fostering trust and ensuring mutual commitment to the agreement’s terms.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Good Faith Negotiation" clause mandates that all parties involved in a contract engage in sincere and honest discussions to resolve any disputes or issues that arise, endeavoring to reach a mutually acceptable agreement without resorting to litigation. This clause ensures that parties commit to cooperative problem-solving and maintain transparent communication throughout the negotiation process.
The "Governing Law and Jurisdiction" clause specifies which region's legal framework will be applied in interpreting and enforcing the terms of a contract and designates the location where any legal disputes will be resolved. This clause is crucial for determining procedural and substantive legal matters, ensuring both parties are aware of the legal standards and courts that will have authority in case of conflicts.
A governing law clause specifies the jurisdiction whose laws will be applied to interpret and enforce a contract's terms and conditions. This provision ensures legal clarity and predictability, especially in agreements involving parties from different regions or countries.
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