This document sets forth an agreement indicating that the buyer of certain
manufacturing goods or property intends to deposit with the seller certain earnest
money as a partial payment toward the purchase of the manufacturing goods or
property. As drafted this agreement contains an arbitration provision and an attorney’s
fee clause. This form contains both standard clauses and opportunities for the use of
optional terms and conditions making it fully customizable to fit the needs of the
contracting parties.
MANUFACTURING EARNEST MONEY AGREEMENT
This Agreement made on this ____ day of ____________________, 20______
[Instruction: Insert date.] between Seller and Buyer, as such terms are defined herein
(hereinafter the “Agreement”)
BETWEEN: _______________________________________
[Instruction: Insert Seller’s name and address.]
(hereinafter the "Seller"),
AND: _______________________________________
[Instruction: Insert Buyer’s name and address.]
(hereinafter the "Buyer"),
WHEREAS, Seller and Buyer have entered into and executed that certain contract dated
as of the ____ day of ____________________, 20______ [Instruction: Insert contract
date.], which shall hereinafter be deemed incorporated by reference (hereinafter the
"Contract"), whereby Seller has agreed to sell and Buyer has agreed to buy the certain
manufacturing goods or property described in the attached Exhibit A, which shall be
deemed a part hereof and incorporated by reference upon the terms and conditions set
forth in the Contract, including but not limited to, any agreements regarding security
interests in any of said equipment and any and all warranties and specifications regarding
environmental hazards, if any regarding such equipment or property, as the case may be
[Comment: User should set forth a description of the property in a separate
document and include it as an exhibit to this Agreement. Parties should tailor
language as necessary to reflect whether or not the agreement pertains to real
property or equipment.]; and
WHEREAS, the Contract states that a total sum of ___________________________
United States Dollars ($_______________) [Instruction: Insert amount of contract
deposit.] has been or will be deposited with the Seller [Comment: Revise as necessary,
if any other party other than Seller will hold the money.], pending the closing of the
purchase and sale pursuant to the terms of the Contract.
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows.
I. EARNEST MONEY
Within ___ [Instruction: Insert amount of days.] days of the date of this
Agreement, and as set forth in the Contract, Buyer will deposit with Seller the total sum
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of __________________________ United States Dollars ($_______________)
[Instruction: Insert amount to be deposited.] (hereinafter the "Earnest Money") as
Earnest Money and a partial payment of the consideration under the Contract. Any
additional earnest moneys or other deposits to be made as set forth in the Contract shall
be made as set forth therein. Any such deposits shall be held as set forth herein, as if
deposited as Earnest Money.
Seller (“Escrowee”) shall hold the Earnest Money in escrow in a segregated bank
account until Closing or sooner termination of this Agreement and shall pay over or apply
the Earnest Money in accordance with the terms of this paragraph. Seller shall hold the
Earnest Money in a(n) non/interest-bearing [Instruction: Delete inapplicable.] account
for the benefit of the parties. If interest is held for the benefit of the parties, it shall be
paid to the party entitled to the Earnest Money and the party receiving the interest shall
pay any income taxes thereon. If interest is not held for the benefit of the parties, the
Earnest Money shall be placed in an account as otherwise permitted or required by law.
At Closing, the Earnest Money shall be paid to Seller. Seller acknowledges receipt of the
Earnest Money by check subject to collection and Seller's agreement to the provisions of
this paragraph by signing in the place indicated on the signature page of this contract.
[Comment: If Earnest Money is to be held by an attorney or other party, other than
Seller, additional language may be required to preserve the additional rights of such
party.]
II. CLOSING
If and when the purchase agreed upon in the Contract is consummated, Seller
shall retain the Earnest Money. Buyer shall be given credit towards the total purchase
price as agreed upon in the Contract for the sum of the Earnest Money retained by Seller.
III. FAILURE TO CLOSE
If the Contract is rescinded or terminated for any reason other than breach by
Buyer, the Earnest Money, in addition to all income earned during the escrow period will
be returned to Buyer. [Comment: Whether to refund the Earnest Money, here, is up
to the discretion of the user. User can alter this language to state that there will be
no refund.]
If the Contract is breached by Buyer and the sale and purchase fail to close as a
result of such breach, the Earnest Money shall be retained by Seller and considered
liquidated damages for Buyer’s breach of the Contract. All income earned on the Earnest
Money during the escrow period shall be retained by Buyer.
IV. INSTRUCTIONS
Seller will not return or otherwise distribute the Earnest Money or any income
earned on the Earnest Money during the escrow period without the written consent of
both parties to the Agreement.
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If a conflict between Buyer and Seller occurs, Seller shall deposit the Earnest
Money, plus all income earned during the escrow period, with a court of competent
jurisdiction located in __________________________________ [Comment: Insert city,
county, state]. The Parties shall then bring an action in interpleader. Upon such deposit,
Seller shall have no further liability with respect to such Earnest Money, except as
otherw